Re: Internet Exchange Questions

[Iljitsch van Beijnum <iljitsch () muada com>]

On Mon, 18 Mar 2002, Jon Bennett wrote:

> I am a business school student studying the state of the telecom sector
> and specifically the Internet infrastructure. I am currently trying to
> understand the role the IX such as PAIX, Equinix, Telehouse, etc.. will
> play in the future where the number of service providers is drastically
> reduced relative to the environment they were created in. I think PAIX
> is a good example of this. MFN announced today that they were selling
> off PAIX. I would be interested in hearing thoughts on why anyone would
> want to buy PAIX and if there is a way to continue to make money selling
> cross connects in the future.

When the number of internet exchanges/NAPs/MAEs started to grow in the
early/mid 1990s, many people expected this to be a temporary phenomenon:
surely, broadband ISDN would obsolete them.

This hasn't happened. However, the reasoning still stands: why buy rack
space in a remote place and go through all kinds of trouble to install a
router there, if you can easily use some kind of switched/multiplexed
service from a telco and directly connect with your intended peering
partners over it, regardless of where everyone is located. (Hey, does this
sound like private interconnects?)

This may still happen as ethernet becomes telco-friendlier. But as long as
you're in a location anyway, interconnecting with other networks who are
there as well is always cheaper and easier.