Aldrin Isaac the Bloomberg guy, has a nice perspective of Internet, its role and its behavior:
Networks prior to the Internet were largely closed systems, and the cost of communicating was extraordinarily high. In those days, the free exchange of ideas at all levels was held back by cost. On the Internet, for a cost proportional to a desired amount of access bandwidth, one can communicate with a billion others. This has propelled human achievement forward over the last 20 years. By way of Metcalfe’s law, the Internet’s value is immeasurably larger than any private network ever will be.
On reliability, maintainability, incentives:
On a well run private network, bandwidth and communications are regulated to deliver an optimal experience, and network issues are addressed more rapidly as all components are managed by a single operator. The Internet on the other hand is a network of networks wherein network operators do not have sufficient incentive to transport data for which they are not adequately compensated.
With network neutrality and the corresponding lack of QoS on the Internet, ISPs have to maintain significant backbone and peering capacity to ensure other communication continue to function in the presence of these high volume traffic. However ISP operators have demonstrated that they are much more inclined to provide capacity to their direct customers than they are to those who are not on their network.
On private vs public (Internet) communication:
On the outside, it seems straight-forward enough for businesses to continue to peer directly over private leased lines. However there is a trend that is putting pressure on this model. An increasing number of private businesses are leveraging an emerging landscape of SaaS and IaaS services. This is driving a general acceptance of the Internet as a primary medium for B2B communication. Private connectivity also comes with the baggage of added capital and operational costs.
For many businesses, Internet-based B2B communication “as is” may be fine for SaaS services such as HR and billing where a temporary loss of service is survivable. But there are a class of services and communications that are too-important-to-fail for many businesses and even for larger ecosystem such as capital markets. Reliable infrastructure is a prerequirement for engaging in these services.
In another blog post, he goes on to mention how problems with Internet can be handled without replumbing the whole Internet:
On the importance of IXPs:
IXPs are where the different networks that make up the Internet most often come together. Without IXP, the Internet would be separate islands of networks. IXP are, in a sense, the glue of the Internet. From the early days of the Internet, IXP have been used to simplify connectivity between ISPs resulting in significant cost savings for them. Without an IXP, an ISP would need to run separate lines and dedicate network ports for each peer ISP with whom it connects.
On the difference between ISP and IXP:
ISP fabrics are intended to reach customers that are spread out over a wide geographic area. An IXP fabric on the other hand is fully housed within a single data center facility. In some cases an IXP fabric is simply a single Ethernet switch. ISP access links use technology needed to span across neighborhoods, while IXP access links are basically ordinary Ethernet cables that run an average of around several dozen meters. So essentially the distinction between the two is that an ISP is a WAN and an IXP is a LAN.
The advantage of peering at IXP:
Remember that the cost dynamics of operating an IXP are different than an ISP. At each IXP these business customers can peer with one another and their favorite ISPs for the cost of a LAN access link.
..being at an IXP creates more direct access to more endpoints at a better price point than buying access lines to numerous ISP.
By connecting to IXP’s B2B customers can at least avoid the cost incurred by having private lines to one another. All they need to have is go to an IXP and plug in (but what is the cost of that?) One more advantage is that business customers use the same access circuits to communicate with other business customers as well as the rest of the Internet. To conclude he says:
As the Internet enables new SaaS and IaaS providers to find success by avoiding the high entrance cost of building a private service delivery network, more businesses are turning to the Internet to access their solution providers of choice. The old Internet connectivity model cannot reliably support the growing use of the Internet for business and so a better connectivity model is needed for a reliable Internet. New opportunities await.
I am looking forward to hear words of wisdom from this guy.