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[3][ISMAP]-[4][USEMAP] September
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World Wide Weight
America's dominance of the Internet isn't just a cultural issue. It
could pose an infrastructure nightmare.
By Andreas Evagora.
Andreas Evagora is international editor for tele.com. He can be
reached over the Internet at [5][email protected].
The year is 1962. At a White House conference, aides warn President
John F. Kennedy that the newly emerging global phone network isn't
really global at all. Kennedy is told that almost every
intercontinental phone call is funneled through the United Kingdom or
one of the other former colonial powers, and that those countries
control the lion's share of international cables. Fearing that the
United States will be powerless in the new telecom era, the Kennedy
administration decides to create Intelsat, an international satellite
system that would quickly end the domination of the old powers over
the global telecom network.
Fast forward to 1997. International service providers find that the
newly emerging global Internet isn't really global at all. Reports
tell them that more than half of intra-European and intra-Asian
traffic is funneled through the United States. Once predictable
traffic patterns are going haywire, rendering established
technological and economic models irrelevant.
Right now, there is no Intelsat on the horizon to save the day for
telecom providers outside the United States. In fact, far from
globalizing, all the signs are that Internet backbone
infrastructure--and the traffic running on it--will become even more
U.S.-centric over the next few years. This isn't just about U.S.
domination: Non-U.S. service providers are contributing greatly to the
imbalance by hatching plans to add new capacity to the States rather
than to other countries in their region. Underpinning that trend is
the concentration of content in America (more than eight of 10 Web
sites are in English) and the continued high price, poor quality, and
lack of easily available infrastructure outside the United States.
The increased concentration of infrastructure and traffic into the
United States not only works against the distributed philosophy of the
Internet but also threatens to endanger the 'Net's international
growth and overwork the U.S. backbone to the point of exhaustion. "The
Internet today is a hub-and-spoke system, with the U.S. at the center
of the entire world," says Neil Tagare, chairman of CTR Group Ltd.
(Woodcliff Lake, N.J.), which plans to build a new global fiber
cabling network linking 175 countries. "That's not right,
technologically or politically."
Already, service providers report that Internet links to the U.S. are
straining to stand up to growing traffic volumes, while demand for
other regional and intercontinental links remains tepid. Around the
globe, U.S.-bound capacity is at a premium, with developing nations
clinging onto the 'Net by a thread. If they are lucky, Russia's 150
million people will share 40 Mbit/s of international Internet capacity
by next year. Today, India--a nation of 900 million--has just 10
Mbit/s of Internet capacity to the U.S.--about as much available on a
LAN supporting a few dozen workers in the United States. "The lack of
non-U.S. infrastructure is holding back real growth of the 'Net in
many regions," says Petri Ojala, technical director of the Finnish
Commercial Internet Exchange (Helsinki, Finland). "If a regional
Internet community is short of capacity, it simply cannot develop as
it wants. Less capacity means less content, less innovation."
If Internet infrastructure continues to be concentrated in the United
States, some fear that the whole non-U.S. high-tech sector will be in
grave danger. Because the 'Net is becoming a critical tool for
software development, a concentration of capacity in the States might
lead to a concentration of innovation there as well. To be sure, it's
difficult to see how India's enormous software development industry
can prosper with 'Net access that is far inferior to that of
competitors in the United States.
A few 'Net watchers warn that failure to address the Internet
imbalance could put some nations at a political disadvantage as well.
"What if a new U.S. government wanted to leverage its control of the
Internet for political ends?" asks one executive at a non-U.S.
Internet service provider. "If it wanted to embargo Cuba, it could use
its influence to control Internet communications there."
But the outlook for regional backbones is less than bright. Such
networks are all but absent in Asia-Pacific, Latin America, and
Africa, while backbones in Europe, where the World Wide Web was
invented, offer no more than 2 Mbit/s of bandwidth (see
[6]"Un-American Activities"). Compare that with backbone construction
in the United States, where today's typical 622-Mbit/s backbones are
expected to double in capacity next year.
Interregional Internet connections also are sorely lacking. Almost
every byte of traffic between continents passes through the United
States, hopping over at least two backbone links on the way.
Concurrently, non-U.S. network access points (NAPs), where Internet
service providers exchange traffic, are small in both number and
processing capacity. "If you were to squint at a map of the global
Internet infrastructure, all lines would roll into the U.S.," says
Robert Hagens, director of Internet engineering at MCI. "That's not a
good way to build a network."
Service providers have never quite faced anything like this before.
Exponential demand for traffic to the United States is soaring, but
investing more in these routes doesn't add significantly to the bottom
line (some phone companies that are also Internet providers offer free
local calling--and therefore free local access--to the Internet but
still need to add extra capacity), and it only increases the
dependency on the U.S. backbone. "Carriers are in a chicken-and-egg
situation," says Chris Champion, senior consultant at The Yankee Group
Europe (Watford, U.K.). "They only want to invest where there is a lot
of traffic, but there won't be enough traffic until they upgrade the
backbones."
EUNet International B.V. (Amsterdam), the European backbone operator,
this month is increasing its U.S.-bound capacity by 34 Mbit/s, to 72
Mbit/s, to meet demand. But its intra-European backbone network, which
comprises mainly 2-Mbit/s links, faces no capacity crunch. "We don't
have any [intra-European] congestion problems whatsoever," says Wim
Vink, the company's managing director.
The problem is, the global Internet is running headlong into an
international infrastructure regime that actually is causing
congestion on intercontinental routes. Capacity planning and demand
forecasts on these routes have been designed largely by monopolies
around the predictable needs of a staid, 5 percent a year growth in
traffic. Phone companies traditionally buy capacity on
intercontintental cables 20 or 25 years ahead of time. That's not a
strategy suited to the Internet; who knows what will happen when
bandwidth-hungry voice and multimedia applications pile onto the 'Net,
as they are expected to in coming years?
Service providers already are feeling the tremors (see [7]"Borne in
the U.S.A."). In the summer of last year, Internet traffic from Sweden
to the United States was about half the volume of voice traffic
between those two countries. By the end of 1996, data and voice
traffic volumes on the Sweden- to-U.S. route were equal, and now data
volume is double that of voice. Meanwhile, voice still accounts for
the vast majority of traffic to neighboring Finland and Denmark.
Traffic patterns between the world's two biggest economies also signal
the changes that lie ahead. Kokusai Denshin Denwa Co. Ltd. (KDD,
Tokyo), Japan's dominant international carrier, has 10 Mbit/s of
Internet capacity to the United States and 15 Mbit/s to the rest of
Asia. Yet the ratio of Internet traffic to the United States and to
Asia is 8 to 1. "The situation is changing very quickly," says Hiroshi
Kobayashi, the carrier's deputy director of Internet business. "Two
years ago, the total ratio of traffic flow from the U.S. to Japan was
4 to 1. Now, it is only 2 to 1." That means Japan is sending
proportionally more traffic to the United States--a traffic shift
directly attributable to the growth of the Internet.
In Australia, Telstra Corp. Ltd. (Melbourne) is dealing with a
U.S./Asia Internet traffic ratio of about 6.5 to 1. "I can deal with
the 1--it's the 6.5 that is the problem," jokes John Hibbard, managing
director of international carrier business. Telstra now has 130 Mbit/s
of Internet capacity to the United States, compared with 2 Mbit/s to
the rest of Asia. Still, Hibbard says of the U.S. route, "We will see
a big squeeze in 1998." As a measure of just how high demand for
bandwidth to the United States has been driven, Hibbard notes that
bids for the 1,000 or so 2-Mbit/s circuits on the new transpacific
TPC-5 cable, due to come into service at the end of this year, were
oversubscribed by nearly four times. "The Asia-Pacific region must
reduce its dependency on the United States to ensure that the quality
of service is not dependent on the U.S. link, which is frequently
congested," Hibbard says.
That overdependency is creating an economic as well as a technical
fallout. Non-U.S. carriers are investing in extra capacity to the
United States, without seeing returns on that investment in terms of
extra revenues. As a result, many international carriers--Telstra
included--complain that in paying the full cost of circuits to the
States, they are effectively subsidizing the U.S. Internet community.
They argue that U.S. service providers should pay for at least a
portion of those circuits.
In the traditional telephony world, international circuits are
provided on a shared-cost basis, with each carrier meeting costs to a
theoretical midpoint between two countries. Telstra and its supporters
want such principles to be looked at--although not necessarily applied
fully--in discussions about the Internet.
This year, Telstra will lose US$10 million on providing Internet
circuits to the United States. By 2000, the total spending on
U.S.-bound Internet circuits from all non-U.S. service providers will
reach US$2.5 billion, Hibbard notes. "We are providing resources for
which we are not adequately compensated," he says. "At the same time,
I am offering U.S. users access to Australian databases without
getting a brass razoo." Hibbard explains that traffic from the United
States to Australia gets a free ride, as U.S. service providers aren't
contributing to the international connection.
International service providers are lobbying U.S. regulators for
compensation. "When people first started connecting to the Internet,
that normally meant they were connecting to America, and as a result
had to pay for the connection," says Michael Behringer, senior network
engineer at Dante (Cambridge, U.K.), which operates the EuropaNet
Internet backbone. Until recently almost all Internet content has
resided in the United States, so it was fair for overseas providers to
pay the bill for access to that content, Behringer reasons. But for
Internet content to become truly global, payments should be more
equitable, and non-U.S. service providers should not have to bear 100
percent of the payment burden, he says.
A group of Asia-Pacific carriers, including KDD and Telstra, has
already made a proposal to the U.S. Federal Communications Commission
that such Internet circuit fees should at least be taken into
consideration during discussions on accounting rates, the fees paid by
one carrier to another for delivering an international telephone call.
To give their argument on leased lines to the United States more
ammunition, several Asian carriers recently agreed to share the cost
of international leased circuits for Internet communications between
their own countries. The matter has also been raised at meetings of
the Group of Seven (G7) nations. But so far, U.S. officials have
rejected the complaint, and international officials don't seem to hold
out much hope of success. "The Americans are sympathetic, but I doubt
if they'll do anything because they don't have to," Behringer says.
Carriers that offer free local calls, such as Singapore Telecom Ltd.
and Telstra, are the most eager for change as they recoup little or no
revenue when users access local servers to tap the global Internet.
They argue that the Internet needs to be put on a more commercial
footing. In Singapore, 65 percent of all 'Net traffic passes through
the United States. "Because of the high cost of international
bandwidth, it actually would cost a user US$100 an hour to connect to
the Internet with a 2-Mbit/s link if he was paying the real commercial
rate to the U.S.," said Tan Boon Tiong, deputy director of network
technology development at Singapore Telecom, speaking at the
International Telecommunication Union's Asia Telecom conference in
June.
Service providers point to other factors holding back the
globalization of Internet infrastructure, such as the high cost of
maintenance, installation, and operation and a lack of human
resources. But many independent Internet service providers say that
old-line telecom operators are hardly covering themselves in glory as
the 'Net spreads its tentacles. Independent service providers and
builders of backbones say that high leased-line costs remain the
single biggest factor holding back the expansion of regional backbones
that could help keep more Internet communications away from the United
States. Lack of competition and a scarcity of infrastructure,
particularly cross-border links, continue to keep leased-line prices
in Europe three to 10 times more expensive than equivalent lines in
the United States. Service providers say that they must wait up to
five months for a cross-border E3 (34-Mbit/s) line, where such service
exists.
Ironically, it's the traditional telcos, which set those high prices,
that are gradually taking over the operation of pan-European Internet
backbones. "European carriers are schizophrenic," concedes one
official at an international carrier alliance. "They will cry about
lack of liberalization in another country but do all they can to delay
liberalization in their own market as long as possible. That's human
nature."
That human nature is only serving to encourage the flow of 'Net
traffic and facilities to the United States. "Dante's backbone took 18
months to organize and two years to turn into a reality," Behringer
says. "That delay was far too long and was mostly caused by arguing
with telcos."
It's not just high leased-line prices that anger independent ISPs.
Deutsche Telekom, now Europe's largest ISP, still refuses to peer its
network at Frankfurt's commercial NAP, where more than 25 independent
German ISPs exchange traffic. Instead, Deutsche Telekom maintains a
single peering deal with Deutsches Forschungsnetz (DFN), a scientific
and academic network. That lack of domestic peering means that all
communications between Deutsche Telekom and other German ISPs must be
routed via the United States.
"Peering via the U.S. affects Deutsche Telekom customers and our
customers because of the delays on U.S. lines, which are normally
saturated," says Thomas Bastian, senior technical director at CERFnet
Germany Inc. (Frankfurt), the German unit of U.S. ISP TCG CERFnet (San
Diego). In response, he says, all independent ISPs have announced that
they will cancel any private peerings with DFN as of this coming
January.
"We are confident that things will change, but everything takes so
long in Europe," Bastian says. "Our U.S. operation connects into NAPs
at 155 Mbit/s, but here in Germany it's at 2 Mbit/s. It's very
expensive just to set up a system, and those costs are inevitably
passed on to users, which slows market development."
Until more capacity is made available, there's not much chance that
the global Internet's dependency on the United States will fade away.
CTR Group's Tagare, a former executive at Nynex Network Systems
(Bermuda) Ltd.--one of the founders of the FiberOptic Link Around the
Globe (FLAG) project building a new global undersea cable--says that a
lot of capacity remains warehoused to block competition. "Active
capacity is no more than 50 to 60 percent of the bandwidth out
there--the rest is warehoused," he says. "The people who need capacity
desperately can't buy it because none is available, while those that
have it can't use it because they don't have sufficient demand for it.
That's an extremely inefficient model."
WorldCom International Inc. (New York), another company planning to
lay new international cabling, also places much of the blame for the
current malaise at the door of incumbent telcos, in particular for
failing to spot the tide of demand for data communications. WorldCom
International says that voice today accounts for 80 percent of
international traffic, but will make up only 20 percent by the early
part of next decade.
"Terabyte requirements will soon be upon us, but carriers got caught
asleep making cozy, 4 percent growth demand forecasts," says Colin
Williams, the company's international executive vice president.
"Today, 90 percent of Internet traffic goes to the U.S., but we
haven't yet scratched the surface of bandwidth requirements across the
Atlantic."
Translation: Don't expect a truly global Internet anytime soon.
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