Developing The Case for NRENs ( A BI T MORE) revised 0 8 - - PowerPoint PPT Presentation

Developing The Case for NRENs ( A BI T MORE)

revised 0 8 -October-2 0 0 8

TF-MSP / TF-PR Zürich 30 September 2008 John DYER TERENA John.Dyer@terena.org

Slide 2

W here did w e get up to since 1 8 May 2 0 0 8 ?

› DRAFT for DI SCUSSI ON version 1

› www.terena.org/ activities/ tf-msp/ documents/ nren-case-v1.pdf

› Suggestions at last m eeting › Presentations in TNC 2 0 0 8 › Discussions at the GA › Em ails on the TF-MSP list › Com pendium data and trends › Discussions w ith CEO of REANNZ

Major Suggestions from May TF-MSP/ PR m eeting

› Different NRENs have different situations › Create a num ber of scenarios

› W hat-if: I ssues w ith Regulator

Commercial / Competition issues Dissatisfaction from the user/bill-payer Lack of Political Support › There are potential dangers in the environm ent in w hich w e operate › Keep aw are of regulatory, political & com m ercial im pact of our portfolios m ay have

Slide 3

Presentations during TNC 2 0 0 8

› som e serious questions about the future of research netw orks.

› Do NRENs need to develop m ore functionality? › Should NRENs think about a new business m odel? › Should NRENs rem ain separate from other ( public) services? › I f NRENs do, w ill they die, be superseded by the m ore rapidly developing com m ercial sector, or continue alongside as a niche m arket?

› have to offer w hat people w ant, not necessarily the technology that is best

Slide 4

TERENA GA Discussions

May 2 0 0 8 › “FREE” services - being used by NREN som e custom ers

› Are they really FREE? W hat are the costs, im plications? › NRENs should m ake use of their position and explore new

• pportunities

› I ncreasing NREN collaboration on Cross-Border-Fibres

› Relies less on centralised international connectivity m odel › Requires com m on agreem ents on SLA, CP, AUP, Security

› Connections becom ing available at prices below those currently being paid in the NREN com m unity

› Procurem ent by NREN at national level is cost effective › NRENs are able to provide services tailored to the com m unity › Users value the services › End-to-End com m unity can sort out issues ( PERT) Slide 5

Em ail Discussions

› We are here only to foster tele-informatic services in higher education and research › We found building a community is useful › Whenever services become mainstream pull-out › NRENs should be better and cheaper than the market?

• r

› As the gap between ISP offering and NREN services closes in terms of price and capability NRENs should: a) compete on equal terms ? b) disappear ? c) re-think their role ?

Com pendium 2 0 0 8 findings

› NREN Traffic

› The NREN approach to QoS › W here is the traffic going › I Pv6 rollout

› Funding

› Econom ic Models › Agency/ Principal v Transaction Costs › Free m arket › Leading to the conclusion that › Com petition is better than Cooperation ? › Hybrid Solution ?

Slide 7

NREN Traffic to External Netw orks

%T3 and %T4 in 2008, EU/EFTA 0% 5% 10% 15% 20% 25% Moldova Ireland Slovakia United Kingdom Netherlands Israel Sweden Austria Hungary Denmark Czech Republic Belgium Finland Luxembourg Bulgaria Switzerland Iceland Latvia Belarus Russia Croatia Poland Malta Germany Italy Morocco Spain %T3 %T4

› Seven large net importers of data in EU/ ETFA region

• › In Europe most outbound traffic amounts to no more

than ~ 10% of available link capacity › How does this compare with the Internet generally ?

% External Link Utilisation

Utilization

› The backbones of the Internet are run at 10% to 15% of their capacity › Private line networks are utilized 3% to 5% . › low utilization of data networks is not a symptom of waste. › Low utilization rates lead to great opportunities for higher quality or less expensive service from aggregation of traffic.

SOURCE: Andrew Odlyzko, University of Minnesota Data netw orks are lightly utilized, and w ill stay that w ay

Review of Network Economics, 2 (no. 3), September 2003, pp. 210-237 http: / / www.dtc.umn.edu/ ~ odlyzko/ doc/ networks.html

Com pendium Survey on QoS

› Does the NREN offer the sam e levels of QoS

• n the netw ork as those offered by GÉANT2 ?

› IP Best Efforts › IP Less than Best Efforts › Premium

YES 2 4 % NO 7 6 %

7% NREN hardware is not capable 21% NREN sees no demand for these services 4% Not physically possible unless all domains in path participate 4% Not economically viable 57% Prefer to over-engineer the network 12% Other reason n= 37

Slide 10

W hy low utilization is necessary

› Low utilization comes from different patterns of use, lumpy capacity of transmission facilities, and the high growth rate of the industry › Users value the ability to send data in high speed bursts, and that should guide us in the design and

• peration of networks

› Also need to address end-to-end performance The last mile – application tuning… etc,

Lightly loaded Saturated

NREN Traffic to and from Com m ercial I nternet 2 0 0 7

10 20 30 40 50 60 70 80 90 100

T3 T4

% of T3 ,T4 traffic to/ from Com m ercial I nternet Sites

Traffic Sources and Destinations

› Traffic to/ from global I nternet is legitim ate

› NRENs may allow content providers to locate servers on their network to improve access to content

› Aggregation of Global I nternet traffic and procurem ent of peering m akes econom ic sense.

T1 + T2 T3 + T4

NREN sites Traffic to/ from Other Global I nternet External com m unity

Total IP traffic growth on G É ANT 2004‐2008

2000 4000 6000 8000 10000 12000 14000 F eb‐ 04 Apr‐ 04 Jun‐ 04 Aug‐ 04 Oct‐ 04 Dec‐ 04 F eb‐ 05 Apr‐ 05 Jun‐ 05 Aug‐ 05 Oct‐ 05 Dec‐ 05 F eb‐ 06 Apr‐ 06 Jun‐ 06 Aug‐ 06 Oct‐ 06 Dec‐ 06 F eb‐ 07 Apr‐ 07 Jun‐ 07 Aug‐ 07 Oct‐ 07 Dec‐ 07 F eb‐ 08 Apr‐ 08 Tbyte per month total IP E xpon. (total

Total I P traffic grow th on GÉANT 2 0 0 4 -2 0 0 8

Total I Pv6 traffic grow th on GÉANT 2 0 0 4 -2 0 0 8

IPv6 g rowth on G É ANT 2004‐2008

20 40 60 80 100 120 140 F eb‐ 04 Apr‐ 04 Jun‐ 04 Aug‐ 04 Oct‐ 04 Dec‐ 04 F eb‐ 05 Apr‐ 05 Jun‐ 05 Aug‐ 05 Oct‐ 05 Dec‐ 05 F eb‐ 06 Apr‐ 06 Jun‐ 06 Aug‐ 06 Oct‐ 06 Dec‐ 06 F eb‐ 07 Apr‐ 07 Jun‐ 07 Aug‐ 07 Oct‐ 07 Dec‐ 07 F eb‐ 08 Apr‐ 08 Tbyte per month IP v6

Total I P and I Pv6 traffic grow th on GÉANT 2 0 0 4 -2 0 0 8

Total IP & IPv6 g rowth on G É ANT 2004‐2008

1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000 12000 13000 F eb‐04 May‐04 Aug‐04 Nov‐04 F eb‐05 May‐05 Aug‐05 Nov‐05 F eb‐06 May‐06 Aug‐06 Nov‐06 F eb‐07 May‐07 Aug‐07 Nov‐07 F eb‐08 May‐08 Tbyte per month

I Pv6 as a percentage of all I P traffic

GÉANT: Percentage IPv6 traffic

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 IPv6/(IPv4 + IPv6) percent

EU/ EFTA NREN Funding Sources

User/ Client Funding SHORT TERM horizon Non-User/ Client Funding LONG TERM horizon

Elem ents of NREN Activity

Production NREN Com m odity Services I nnovative Developm ent DI RECT VALUE SPI LLOVER VALUE I NDI RECT VALUE TOTAL NREN COSTS NREN Users/ Clients see VALUE User funding appropriate PUBLI C VALUE Central funding appropriate

Acknow ledgem ents to: Donald Clark, REANNZ

Relating Reality to Econom ic Theory

1 0 0 % Central Funding Percentage User Charging 0 % 1 0 0 %

Percentage User Charging

1 0 0 % User Funding

• ptim al
• utcom es

sub-optim al

• utcom es

Optim al ratio ? Sim plified Principal-Agency Theory Transaction-Costs Econom ics1 2 0 0 7 EU/ EFTA NREN Funding Sources

1 ) Acknow ledgem ents to: Donald Clarke, REANNZ

Scenarios

› Regulatory › Com m ercial / Com petition issues › User/ bill-payer funding issues › Lack of Political Support

Slide 21

Regulatory

Slide 22

› Cooperative relationship

› Exam ple: FUNET

› Converse

› Exam ple: SURFnet

› I ssues: › Requirem ents for data collection/ retention and providing taps for agencies › NRENs are not public netw orks › Closed user groups w ith lim ited scope › Need the Freedom to I nnovate successfully

Com m ercial / Com petition I ssues

› No serious incidence of problem s to date › NREN Position:

› NRENs are not open public netw orks › Closed user groups w ith lim ited scope ( R&E) › Occupy a niche not served com m ercially › I nnovation for tom orrow s I nternet › Experts at integration of existing products into new and innovative pilot services › Cooperative w ith I ndustry for m utual benefit ›Testbeds, equipm ent testing › Trickle dow n to com m ercial w orld and e-com m unity

Slide 23

Users/ Bill Payer I ssues

SERENATE1 and EARNEST2 Studies found that a hybrid funding m odel predom inates and is found to function w ell

Slide 24

1) SERENATE Summary Report, Dec 2003 2) EARNEST Summary Report, April 2008

Production NREN Com m odity Services I nnovative Developm ent DI RECT VALUE SPI LLOVER VALUE I NDI RECT VALUE TOTAL NREN COSTS NREN Users/ Clients see VALUE User funding appropriate PUBLI C VALUE Central funding appropriate

Lack of Political Support

› NRENs are not traditional public netw orks › Closed user groups w ith lim ited scope › Need the Stable Financial and Political basis to I nnovate successfully › NRENs are a National Asset

Slide 25

I n Sum m ary

› NRENs have an im portant job to do › I nnovation › Pushing the boundaries › Leading the further developm ent of the I nternet › Enabling research and education to do their

• w n jobs better

› Enabling e-society › End-users & bill payers m ust see value in w hat NRENs offer › Else . . . .

THE END