The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas and the Bahamas Telecommunications Company (BTC) have unanimously cast doubt on URCA’s case for developing a local Internet Exchange Point (IXP).

The Bahamas’ two largest communications companies, responding to the Utilities Regulation and Competition Authority’s (URCA) consultation document on the proposal, said the cost and efficiency benefits touted by the regulator were “overstated” given that any delays in accessing internet content likely averaged less than between 18-23 milliseconds.

BTC, in particular, suggested that URCA’s argument had been based on experiences in other countries that were not comparable to The Bahamas. It argued that a Bahamas-based IXP would only reduce delays in accessing data by around three milliseconds, “less than two percent” of the reduction enjoyed by nations such as Kenya and Nigeria.

While these nations were far away from the nearest global Internet Network Access Point, BTC said The Bahamas by contrast was located in close proximity to the one in Miami. This meant that the time required to access locally-generated traffic and content was “minimal” even if this had to first exit The Bahamas and come back in.

URCA’s original consultation document argued that the cost of establishing a Bahamas-based IXP, which is a point, facilities or infrastructure on the Internet where Internet Service Providers and content distributors connect with each other, was relatively minimal.

Pointing out that multiple other Caribbean nations already possess their own IXP, URCA said establishing a similar “clearing house” for Internet traffic would improve access and service quality, reduce delays, produce cost savings on international transmission links, and both help local content providers and attract their international counterparts to The Bahamas.

“In BTC’s view, however, the consultation document fails to provide any evidence to demonstrate that any of these claimed IXP-related benefits would in fact be likely to materialise to any significant degree in The Bahamas,” the Liberty Latin America-owned carrier replied.

“As well, BTC considers that URCA significantly underestimated the cost of establishing a carrier-grade IXP in The Bahamas. In other words, the benefits outlined in the consultation document are largely ‘assumed’ and overstated, and the associated costs understated.”

When it came to latency, which is delays that impede the speed with which data travels on the Internet, BTC added: “URCA is overstating the potential latency gains in large part because of its reliance on external reports dealing with foreign jurisdictions that are not representative of the local conditions in The Bahamas.

“It is important to understand that local traffic in The Bahamas typically transits through a Network Access Point (NAP) in Miami. The distance from Nassau and Freeport to the Miami NAP is relatively short and, in terms of traffic carriage, represents a minimal round-trip time. Therefore, the latency improvement benefit of localising Bahamian traffic would be negligible.”

BTC said it had “serious concerns with this type of analysis” used by URCA to justify its case for a local IXP, as its consultation paper had focused heavily on African nations. It added that both Kenya and Nigeria were bound to benefit from setting up their own IXP because their nearest Network Access Point was likely thousands of miles away in London.

BTC’s stance was also backed by BISX-listed Cable Bahamas, the two communications rivals uniting in common cause for once. Also expressing concern over the case studies cited by URCA, Cable Bahamas warned that the assumed costs of establishing an IXP “may be heavily underestimated” given the regulator’s vision for it to play a critical role in The Bahamas’ digital infrastructure.

“The statement that IXPs significantly reduce delays in networks, and prevent the deterioration of Internet performance, depends on the situation,” Cable Bahamas argued. “While there are examples where this may be true, and some of those examples are mentioned in the consultation document, it does not mean this will be the case for The Bahamas given its close proximity to the Miami Internet hubs.

“Round-trip measurements show average delays of less than 18 milliseconds to the US Internet hubs, and less than 23 milliseconds to large content providers (Google/YouTube, Facebook/WhatsApp, Amazon, Yahoo, Microsoft, Instagram, Netflix etc). Such low delays do not suggest there is presently a latency problem.”

When it came to accessing Bahamian websites, content and traffic, Cable Bahamas said it was “doubtful” significant delays will be caused by having to transit foreign IXPs due to the closeness of the Miami hubs and “very low share of local traffic in the total internet traffic of The Bahamas”.

BTC, meanwhile, suggested that an investment of $100,000 to $150,000 on equipment alone would be required for a Bahamian IXP - a sum well above the $4,000 to $40,000 range quoted in URCA’s consultation document. It estimated that annual hosting costs would run to between $30,000 to $50,000 per year, with other operational costs totalling from $120,000 to $300,000 annually.

It added that the claimed savings on international carriage through the creation of a Bahamian IXP would be “negligible at best”, and said: “In preparation of this initial response, BTC carried out a traffic study covering a period of approximately four years.

“This study confirmed that local IP traffic between BTC and Cable Bahamas, as measured by BTC, is minimal, peaking at 200 megabytes (Mbps) per second per day for one day only on November 6, 2018, and accounts for roughly 3 percent of total IP traffic.

“Given that IP transit prices in Miami are generally below $1 per Mbps per month, the total IP transit savings from localising traffic would be in the range of $2,500 per year. Those are minimal savings and are significantly less than IXP operational costs.”

And, taking on URCA’s belief that a local IXP will help attract international content providers to The Bahamas, BTC said it was “surprised” by such assertions “since three major international content providers, Google, Facebook and Akamai, already have nodes in The Bahamas”.

It added that The Bahamas was one of only seven Caribbean Telecommunications Union (CTU) members to host these three content providers, and argued that URCA was again “overstating” the case that a Bahamas-based IXP would lead to an explosion in both local and international content development from these shores.

The arguments by Cable Bahamas and BTC are especially interesting in light of the fact that the creation of a local IXP was cited as one of the critical factors if the Government was to realise its Grand Bahama “technology hub” ambitions.

URCA released their replies as it invites comments on the feedback received to its IXP proposal by August 22, 2019.