Indeed, the Internet has changed dramatically over the past 10 years

The radical change of the Internet in the last ten years

Among the extensive arguments and counter-arguments for proposing a fair share of the costs incurred by large traffic generators in telecommunications networks, there is one that deserves special attention. It is often pointed out that this issue was brought up more than ten years ago and failed to get the necessary support to move forward, and since nothing has changed, bringing it up again ten years later is pointless. It is surprising to claim that nothing has changed on the Internet in the last ten years.

The truth is that in the last ten years everything has changed On the Internet. the network architecture of the Internet has changed, business models have changed, the volume of traffic has grown exponentially, and the balance between the companies that make up the Internet ecosystem has shifted.

Starting with the early Internet, based on websites, with many companies and a balanced ecosystem between content producers and consumers, and the telecommunications operators that transport that content, the last decade has seen a consolidation of the Internet, dominated by a number of very small companies; Thanks to their business acumen and “winner takes all“With the trend of Internet business models, these companies have achieved a dominant position in the Internet ecosystem that is already unchallenged and unchallenged by 2022, creating a structural problem that requires a solution. This situation has led regions such as the European Union to promote legislative responses such as the Digital Markets Act (DMA).

If this reality cannot be denied, then all companies and authorities involved in the future and smooth functioning of the digital ecosystem should consider that the time has come to review some of the rules and models that were agreed upon in the early Internet era and that no : longer will correspond to the reality of 2022. It is time to lay a stronger foundation for a new era of the Internet than the current one, which can only be done by understanding the architecture of the Internet and its evolution.

The original architecture of the Internet

The Internet is a network of networks, which consists of thousands of interconnected networks. The interconnection architecture of networks on the Internet was initially hierarchical. There were 3 levels of networks: Level 1 global networks whose interconnection provided full access to any content or any user anywhere in the world; Grade 2 was compliant regional networkswhile level 3 were local networks to which Internet users and Content and Application Providers (CAP) were associated. Layer 1 is traditionally known as the Internet the spine.

In the early days of the Internet, application and content providers and users connected to the carrier that provided the Internet access service, which was responsible for connecting to the higher-level carrier to achieve transit to the global Internet.

Indeed, the internet has changed dramatically over the past 10 years 5

As you can see, the interconnection between the different networks that make up the Internet was done through two different services. When a lower-level network connects to a higher-level network, it pays a so-called fee transit service. This service allows the user of this network to reach any destination or access any content located on any network connected to the Internet. Networks of the same level can also be directly interconnected using so-called partnership agreement. By connecting the two networks directly, the use of a transit service was avoided. This service provides direct access to users and content of two interconnected networks, but does not provide visibility to users and content of other networks.

In transit contracts at the commercial level, the “downstream” network paid the “upstream” network for service. In contrast, partnership agreements are based on unregulated criteria on the number of users and content providers on each network and the traffic exchanged. Because the carriers seeking interconnection tended to have similar network structures, the services provided by each other and the costs associated with them were comparable. The implicit assumption of network symmetry (especially symmetry in access networks) and cost has in many cases led to free looking arrangements based on the assumption that payments made to cover costs incurred in a counterparty’s network will be offset against payments received from that counterparty. The traffic exchange symmetry parameter became a guiding criterion for negotiation in this early model of the Internet. looking contracts.

Flattening the web architecture

Internet architecture had to adapt to new needs arising from the exponential growth of video traffic (or video) streaming) Over the years, several elements have been introduced that have dramatically changed the architecture of the Internet. On the one hand, video required capabilities that the basic architecture of the Internet could not provide. This led to the introduction of one element, CDNs (Content delivery networks), clouds specializes in video distribution which reduced the need for increased capacity in the higher layer networks (Layer 1 and 2) and reduced latency (the time it takes for content to reach the end user), thus improving the user experience. On the other hand, as the large hyperscales grew and consolidated their platform model, they started building their own optional transport networks (at the most profitable levels) and their own optional CDN infrastructure.

This change brought a a complete transformation in the technical architecture of the Internet. However, the interconnection business model associated with the original Internet architecture failed to evolve. None of the connection rules created for the original Internet could be changed. More precisely, we can say that the hyperscales have not been allowed to change these rules, given the benefit they receive from this model of interconnection and using their undisputed market dominance to impose rules and conditions.

With the introduction of these elements, the Internet has evolved over the last ten years into a smoother network where the original layers and hierarchies disappear. Those hyperscales that have achieved dominance and sufficient business scale to do so connect directly to many carriers’ networks at their most expensive tiers, bypassing transit networks. but not as internet usersas they did in the initial stage, but as “Operators“using looking contracts. Building their own infrastructure has allowed large hyperscalers to avoid not only Internet transit costs, but also the costs of distributing their content, thus gaining a competitive advantage over other players who do not have a dominant position and therefore cannot force free peering. contracts.

Internet architecture has become highly centralized and dependent on a few players at large hyperscales.

Indeed, the internet has changed dramatically over the past 10 years 6

Internet users, telecom operators or content providers?

Most Internet transit traffic is now generated in bulk hyper shavers. In addition, the delivery of their content to end consumers bypasses the traditional hierarchy of the Internet. Today, 3 of the top 5 ISPs are Hyperscalers. These companies can reach most networks directly without going through the Internet hierarchy.

Surely it’s time to ask if? Internet giants are communication providers Under the supervision of and subject to the decisions of national regulatory agencies, or those application and content providers or Internet users, is obliged to pay for the received communication service. What is their role in the Internet interconnection model?

The advantage of not having to pay for using operator networks

As traffic from large hyperscales grew, and as these companies began aggregating much of the Internet traffic, they created their own private network to avoid transit fees. They reduced their contact with local operators on traditional terms and enabled to other networks, forcing free looking.

These companies became a “category” not initially envisioned in the Internet interconnection model; they stopped being internet users and became. “special” network operators not with an access network, not with a national network, but with content that clearly gave them a dominant position in the negotiations; looking contracts.

This is essential to understand when the hyperscanner negotiates a looking agreement with the telecommunications operator, it does not do so on the basis of the same principles looking Agreements are concluded between operators. Providing basic content and apps (due to consumer demand) gives them bargaining power, which usually results in free looking contracts. They demand the advantage of operators not having to pay for using their traffic transport service.

This does not appear to be a sign of the balanced bargaining power between operators and large hyperscalers.. Rather, it shows a market distortion that, if not adapted to the evolution of the Internet, can only lead to an unstable situation dominated by a few companies that set the rules, conditions and are able to capture most of the value generated. in the digital ecosystem.

Conflating the reality of networks with the reality of large hyperscalers in the interconnect market has led to a distorted market. The current definition of the Internet interconnection market is no longer relevant because it does not consider the reality of the new interconnection model based on CDN: and: cloud infrastructure of hyperscalers.

Given that this situation was never envisioned in the original Internet model, it should lead us to think that the time has come to consider whether this is the right basis for funding investment efforts by telecommunications operators to deploy national backbones and access networks.

The key debate is how to build a fairer and more sustainable digital ecosystem

The debate about the fair investment of the big Internet companies is a debate about the need to rethink the assumptions agreed upon in the 1990s that 30 years later still apply to an Internet that bears little resemblance to the Internet that was born in the 1990s. 1990s

It is legitimate that companies that have been most favored by these rules want to maintain them even in the era of Web 3.0, but there is a broad global consensus that in order to ensure a fairer and more balanced Internet ecosystem, these rules need to be revised. Legitimate counterarguments to telecom operators’ claims must be based on data and facts from today’s Internet, not from an Internet that no longer exists.

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