1. Cost-Savings Exercise AFIX Technical Workshop Session 2

2. AFIX Technical Workshop: Session 2 Outline of Content What technical realities drive cost changes? A tool for understanding in detail ISP Models Scenarios Exercise: Using a modelling tool to explore possible scenarios and their cost-savings implications

3. AFIX Technical Workshop: Session 2 What technical realities drive cost changes? Handling local traffic today Option A: Bypassing ISPs Option B: Bi-lateral peering Option C: The IXP

4. AFIX Technical Workshop: Session 2 L1 S3 M2 S4 Handling local traffic today Local ISPs User A User B International bandwidth (expensive) Global ISPs

5. AFIX Technical Workshop: Session 2 L1 S3 M2 S4 Handling local traffic today - another variation user A user B Local ISPs International bandwidth (expensive) Global ISPs

6. AFIX Technical Workshop: Session 2 L1 S3 M2 S4 Option A: Bypassing ISPs user A user B Local dedicated line (cheaper) Local ISPs International bandwidth (expensive) Global ISPs

7. AFIX Technical Workshop: Session 2 L1 S3 M2 S4 Option B: Bi-lateral peering user A user B International bandwidth (expensive) Global ISPs Local dedicated lines (cheaper) Local ISPs

8. AFIX Technical Workshop: Session 2 L1 S3 M2 S4 Option C: The IXP user A user B IXP International bandwidth (expensive) Global ISPs Local dedicated lines (cheaper) Local ISPs

9. AFIX Technical Workshop: Session 2 L1 S3 M2 S4 Option C: The IXP – another possibility user A user B b IXP International bandwidth (expensive) Global ISPs Local dedicated lines (cheaper) Local ISPs

10. AFIX Technical Workshop: Session 2 Spreadsheet: ISP Models Divided into segments based on international bandwidth (Mbps) Variable (green shaded area): Bandwidth per ISP Global variables: Cost of international bandwidth ($/Mbps/month) Cost of local bandwidth ($/Mbps/month) Average % of traffic that is local Standard local bandwidth increment (Mbps) Fee to participate in peering, per ISP per year

11. AFIX Technical Workshop: Session 2 Scenario spreadsheets Uses data from ISP Models worksheet 4 possible scenarios for comparison Indicate # of ISPs of each size that are in your market. Indicate # of those ISPs who choose to participate in an IXP Change any global variables to suit your market

12. AFIX Technical Workshop: Session 2 Scenarios – Keys to Interpretation ISPs who dominate already keep much of their local traffic local (% internally routed traffic). This traffic will not go through an IXP in any case. Savings come from converting (old) international Mbps to (new) local Mbps. Costs come from the new local lines and sharing operating costs for the IXP.

13. AFIX Technical Workshop: Session 2 Exercise: