Making connecting easier
OUR leads efforts to introduce local Internet Exchange Point
Gordon Michael Swaby, GUEST COLUMNIST
The Office of Utilities Regulation is moving to end the practice where all Internet traffic from Jamaica is routed through the United States.
The country is on the cusp of implementing an Internet Exchange Point (IXP) with the OUR coordinating this initiative.
An IXP allows local Internet service providers to exchange Internet traffic between their networks at a reduced cost.
Internet exchanges are not new but are essential to fostering the development of local content and a thriving Internet economy. The promise of an IXP in this country opens the path for new possibilities within the area of local online services, and especially for the anticipated surge in local content. It provides a single simple facility for the exchange of local Internet traffic within the boundaries of the country, improved network resilience, as well as enhanced technical performance.
This translates into faster loading times to Internet users accessing content that is cached locally, improved response times for their requests of locally hosted websites, as well as improved delivery methods for traditionally bandwidth intensive data such as videos.
Benefits to the financial sector
The IXP provides an attractive proposition for those seeking to offer financial services online and the way in which they choose to interact with their subscriber base or even expand their online presence through this critical information infrastructure.
First, financial entities will be able to 're-home' financial platforms that are now housed outside of Jamaica. This means that they will be able to have their equipment located here in Jamaica instead of overseas. This gives a level of certainty for the management of data stored on these platforms.
It also helps to improve the ability of the financial service provider's capacity to respond to occurrence such as system downtimes, given that critical facilities are housed closer to home. In Nigeria, for example, a major e-transaction and e-payment provider, Interswitch, which had been established by several banks in the country to effect debit, credit and prepaid cards through a variety of payment channels, utilised its connection to a local Internet Service Provider (ISP) to take advantage of the benefits afforded by an IXP.
This move led other financial platforms to follow suit and as a result several financial platforms previously hosted overseas began to return to Nigeria. The result of this move now means that information related to financial transactions that occurred on these platforms were exchanged locally by ISPs that were connected to the IXP.
Such moves, when coupled with other related regulatory initiatives such as daily cash-withdrawal limits, have the potential to improve the use of online banking as well as the overall experience of consumers utilising related electronic payment methods.
Another related example has to do with the mobile money service, MPESA, operating in Kenya and which has been by far one of the most successful implementations of mobile money in the world. MPESA has an estimated rate of more than 200 transactions per second, an estimated 15 million active subscribers, and it is claimed that MPESA handles more transactions than Western Union does worldwide.
However, the system, despite its dominance and the ubiquity of the facility, is plagued by frequent outages that cripple the ability of its users to gain access to funds, which in turn hampers their ability to perform financial transactions. One reason for the outages is that MPESA's owner has its servers in Germany and at times has suffered loss of connectivity to the servers due to cuts to the fibre linking the facilities. Consequently, the company has decided to re-home some of its MPESA servers in Kenya to increase both reliability of the service and the transaction rate on the platform.
These are just some of the benefits to be had from building a centralised information infrastructure to facilitate the local exchange of Internet traffic via a dedicated switch facility. It also can provide additional services such as centralised reference timing for transactions conducted online.
This means that all transactions occurring at a point in time will be given a common time designation. This can be useful for financial entities and those utilising their services. What will be important for financial entities is to examine their present arrangements and to see how they can leverage the benefits of participating in the IXP to achieve core objectives or encourage their ISPs to ensure that they participate within the local IXP to reap its benefits.
Locally, an IXP working group was established in January 2014 to oversee its implementation. The group includes LIME, Digicel, Flow, UWI, the Ministry of Industry, Investment and Commerce and others, with the OUR as the facilitator.
The IXP switch was installed in September 2014 and the participants are now in the process of connecting to the facility.
Gordon Michael Swaby is a regulatory engineer at the Office of Utilities Regulation. He can be contacted at email@example.com