URCA ends public consultation on Bahamas IXP

URCA ends public consultation on Bahamas IXP
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NASSAU, BAHAMAS — The Utilities Regulation and Competition Authority (URCA) said it “was not surprised” that the country’s two largest communications companies had cast doubt on its case for developing a local Internet Exchange Point (IXP).

The regulator said there was considerable evidence to support the contention that the opposition was due to a perceived threat to their commercial position.

This was included in its statement of results concluding its public consultation on a regulatory framework for the build-out of Internet Exchange Points in The Bahamas.

URCA also acknowledged that a previous attempt to introduce IXP technology in The Bahamas was unsuccessful.

IXPs are points, facilities or infrastructure on the Internet where ISPs and content distributors connect with each other on the Internet.

They are seen as key components of a country’s digital infrastructure, serving as “centralised clearing houses” for the exchange of Internet traffic between technology-based companies.

As there is currently no IXPs in The Bahamas, local ISPs route locally destined data traffic between their networks through an intermediary switching facility in Miami and back.

The government is desirous of actively promote the build-out of IXPs in the The Bahamas as it views the presence of IXPs in-country as vital to the development of The Bahamas’ digital space. The creation of a local IXP has been cited as one of the critical factors if the Government is to realize its Grand Bahama “technology hub” ambitions.

While Cloud Carib, one of five companies to respond to the consultation document considered the implementation of an IXP as crucial to mitigate risk and would aid in The Bahamas’ development, the country’s major communications providers  expressed doubts over its benefits.

BTC contended that the consultation lacked evidence that demonstrated the IXP-related benefits that would result in The Bahamas, arguing that URCA’s stated benefits were largely assumed and overestimated in addition to the associated costs being understated.

Similarly Cable Bahamas reasoned that the assumed set-cost for an IXP is heavily underestimated by URCA and also noted that given The Bahamas’ close proximity to Internet hubs in Miami a local IXP may not be a necessity.

“URCA was not surprised by the general approach taken by BTC and CBL in their responses to the consultation document,” the statement read.

“As a general point, considerable evidence exists to support the contention that incumbents,in URCA’s region and elsewhere, often opposed the build-out of IXPs due to a perceived IXP threat to their commercial position. URCA is equally cognizant that a previous attempt to introduce IXP technology in The Bahamas was unsuccessful,” the regulator said.

It also noted that mistrust, a lack of collaboration, and having a competitive advantage are also potential reasons for the opposition by some networks.

The regulator stated: “URCA acknowledges that its statement regarding the volume of local IP traffic that travels through Miami IXPs and back was premised on imprecise traffic estimates received. URCA notes the respondents’ submissions that local IP traffic volume, as a share of total IP traffic is insignificant to justify an IXP build-out in The Bahamas.

“With that stated, URCA understands that traffic volume alone is not always an accurate predictor of an IXP’s success. After all, history shows that IXPs may still deliver technical and other benefits regardless of traffic volume. LMC endorsed this view, when it asserted that a Bahamian IXP would generate other benefits even if current traffic volume is low or insignificant.”

URCA also contends that The Bahamas’ close proximity to an IXP in Miami or US IXPs generally does not necessarily mean data latency is not a material concern now or going forward.

“After all, Google, Facebook and Akamai still see a need to cache content in The Bahamas in order to reduce delays (faster downloads) in data transmission and enhance end-user experience,” URCA said.

“Furthermore, as new technology and latency sensitive services/applications emerge in The Bahamas the need for very low latency connections assumes greater significance for stakeholders.

“The fact that The Bahamas is situated close to Internet hubs in Miami and popular web content by global companies is already hosted in-country (without a local exchange) does not necessarily lead to the conclusion that local IXPs are not necessary. Or, the presence of a local IXP would not incentivize local and other global organizations to cache content locally.”