The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators yesterday moved to create the supervisory framework for Bahamas-based Internet Exchange Points (IXPs) in a bid to lower local access costs.

The Utilities Regulation and Competition Authority (URCA), in releasing its consultation paper on the form an IXP regulatory regime should take, said the absence of such facilities in The Bahamas meant Internet Service Providers (ISPs) had to routinely route locally-designed and targeted content through other countries.

This, it added, merely increased costs for the likes of the Bahamas Telecommunications Company (BTC), Cable Bahamas and both ISPs subscribers, with the prices for their international routing circuits between six to 17 times’ greater than their local ones.’

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.

But, while Caribbean rivals such as Barbados, the British Virgin Islands, Jamaica, Trinidad & Tobago and even Cuba all have their own IXPs, The Bahamas has yet to make such a move despite its ambitions to develop a “technology hub” in Grand Bahama.

“Currently, there are no IXPs in The Bahamas,” URCA confirmed. “As a result, local ISPs routinely route locally-generated Internet traffic destined for local users through intermediary networks and digital infrastructure in another country. In this case, the traffic exits The Bahamas through an intermediary network or a switching facility in Florida and then re-enters The Bahamas.

“This practice, often referred to as ‘hair-pinning’, ‘tromboning’, or ‘boomerang’ routing (due to the path’s shape) is known to be inefficient, adds costs to the operations of ISPs and content distributors/aggregators, and has the potential to stifle development of a local content sector.

“Hair-pinning local Internet transmission outside a country also gives rise to privacy or data protection concerns in countries that excessively depend on digital infrastructure and enterprises in another country.”

Providing evidence to support its high-cost assertions, URCA added: “The high cost of international transmission links reinforces URCA’s view that demand exists for local IXPs in The Bahamas. The practice of routing local Internet traffic outside a country adds costs to the operations of ISPs and content aggregators, and helps to keep end-user pricing for access and usage high.

“URCA’s assessment of leased circuits pricing finds that there is a significant cost differential between local and international bandwidth. URCA finds that BTC’s international leased circuits pricing can be 10.42 to 14.19 times their equivalent local costs.

“Similarly, Cable Bahamas’ international circuits pricing can be 5.92 to 17.33 times their equivalent local costs. Alongside this is the fact that a significant amount of Internet traffic is already routed externally over expensive international transport links.”

Calls for the Bahamas to establish its own IXP are nothing new, and date back to at least 2014 when then-BTC chief executive, Leon Williams, warned that the country was falling behind its regional rivals by failing to develop such infrastructure for itself.

“Many countries in the Caribbean have already created local IXPs; we are falling behind. The IXP, like our regulating body URCA, should be created by the providers,” Mr Williams added.

“Having this structure will save money for the ISPs and the consumer, as the bandwith to send data to the US and back would no longer be required. Furthermore, it is more secure, so the data from our country stays in country. The major benefit is national security.”

These calls were recently renewed by the steering committee for the Grand Bahama technology hub. Its chairman, Dr Donovan Moxey, told Tribune Business last year that ISPs were reassessing the IXP idea once again amid suggestions that such a facility be owned by a consortium.

“Each local Internet Service Provider (ISP), and mobile and fixed line telecommunications company, should provide detailed information on their current network capacity and plans for expansion/upgrade over the next five or 10 years,” the steering committee’s early 2018 report urged.

“A number of the key submarine cables in the Bahamas are nearing end-of-life, and the Government needs to engage service providers to ascertain their plans for investing in new cables to replace the older cables.”

As for an IXP in the Bahamas, the report added: “Each major private sector connectivity provider (ISP) will make an internal decision regarding the possible business case for implementation of an IXP that will be responsible for deterministic routing of local (Bahamas) as well as global Internet traffic.

“The companies will decide if it is in their best interest to establish a consortium of local Internet connectivity and data centre services providers, or if each provider will build and manage IXPs individually. A key question that needs to be answered is what role will URCA play for IXP facilities that may be located in Freeport.”

URCA yesterday said an IXP would help the Government realise its ambition of increasing the number of Bahamians who use e-government services by 70 percent come 2025.

It added that in 2017 some 40,000 tax payments and 1,308 business registrations; 43,360 National Insurance Board (NIB) benefits claims; 50,000 driver’s licence renewals; 31,200 birth certificates; 22,900 deeds searches; 7,530 ‘letters of good standing’; and 4,989 “other companies services” were handled by non-digital means.

“Collectively the Registrar General’s Department, National Insurance Board and Road Traffic Department dealt with between 50,000 to upwards of 60,000 transactions for key services manually,” URCA said.