The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas will send the signal that it is “a really serious technology player” if it develops its own Internet Exchange Point (IXP), the head of its technology hub committee believes.

Dr Donovan Moxey, who chaired the government-appointed body that developed the “road map” for the Grand Bahama technology hub, told Tribune Business that the Utilities Regulation and Competition Authority’s (URCA) decision to press ahead with establishing an IXP regulatory framework was “pretty big” when it came to realising this nation’s ambitions.

“I think it’s extremely positive,” he said of URCA’s move, first reported in this newspaper on Friday. “Two things happen when we can offer an IXP or that same service in The Bahamas. One, it reduces costs to the carriers and they will become more competitive in terms of the cost. You don’t have to route messages and traffic outside the country, and then back in.

“The other thing that works well for us is that having an IXP in The Bahamas, you can have determinative routing. That means that institutions in The Bahamas who like to have access to the Internet, the messages they send will be routed in a pre-determined way. The IXP allows them to do that.

“It becomes a lot more efficient in how you switch or route information over the Internet. Determinative routing determines which direction information is routed from or to a potential source. It’s [an IXP] one of those recommendations we made as part of the tech hub,” Dr Moxey continued.

“This is pretty big. It really puts us on a footing where we can provide the services these companies expect. It says The Bahamas can be looked at as a really serious player in terms of the level of services and technology infrastructure it can provide. It takes away the negative where you have people saying we don’t provide IXP services.”

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.

“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,” URCA said in its consultation document.

“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.”

URCA said Kenya’s creation of its own IXP reduced the time between when messages were sent and received from “200-600 milliseconds to 2-10 milliseconds”. For Nigeria, the reduction was “from 200-400 milliseconds to 2-10 milliseconds”, and both countries - as well as Egypt - were said to have slashed annual costs for international transmissions by $1m.

Dr Moxey told Tribune Business that creating an IXP would remove a negative “off the table” by placing The Bahamas on the same competitive footing as its Caribbean and international rivals.

He added that the ability to provide determinative routing via an IXP would “make us attractive” to companies that valued data and content security - the likes of financial services institutions, Fintech (financial technology) companies and other technology entities.

“They see having an IXP or regulatory framework for an IXP in The Bahamas as having real value,” Dr Moxey told this newspaper. “It’s a positive step, especially when you’re talking about building a technology hub and offering services consistent with being a regulated technology provider.

“When we talk about technology companies, Fintech companies, one thing that’s important to them is security of data and having a certain degree of confidence over how information is routed through the Internet. An IXP provides those services.

“An IXP is one of those very important services to offer clients, especially clients in financial services and other institutions where determinative routing is very important to them. This is also all consistent with local coverage, access and content.”

Dr Moxey suggested a consortium of Bahamian Internet Service Providers (ISPs) and local technology firms would likely have to own the IXP - a suggestion that was in line with URCA’s thoughts.

The electronic communications sector regulator is proposing, subject to industry feedback, that the Bahamian IXP be set up as a non-profit, cost recovery type of venture that would be owned by a group of industry stakeholders.

Still, URCA acknowledged: “One advantage of this option is that it is likely to be more closely aligned with market needs once stakeholders’ participation in its implementation and management is provided.

“As such, it is likely to be most responsive to the needs of stakeholders as they have influence over the policy direction of the IXP. This option would be most compatible with attracting external players to the IXP.

“On the other hand, this option may not be viable, given current market structure in The Bahamas. In particular, it is not clear to URCA that stakeholders would co-operate, as their economic interests may not be aligned. In addition, there is limited precedent for this type of ownership and operational model in The Bahamas. Thus, questions remain whether this is compatible with the state of the market.