Net Neutrality and the Carrier Hotel

Carrier hotels and large data centers offer the telecom and network industry convenient locations to interconnect with other telecom companies at a physical level, in a neutral facility offering high density of available carriers. As telecommunications worldwide continues movement towards packet networks and services, Internet protocol exchanges and interconnection points will add even greater value to the global telecom community.

Large networks are demanding compensation from smaller networks and content providers for use of their infrastructure, while the Internet community in general is demanding free access (network neutrality) to that infrastructure used, or contracted from the large facility-based networks. Carrier hotels are essential to survival of smaller companies hoping to compete with established public utilities including AT&T, Verizon, and BellSouth.

Legislation such as HR 5252, without specific network neutrality protection, will drive the second tier of network providers to develop parallel infrastructure using wireless and physical cable, in addition to stronger peering relationships allowing bypass of large network infrastructure. Carrier hotels support stronger peering relationships among smaller networks and content providers by allowing a neutral interconnection environment, bypassing large wholesale network infrastructure or transit.

The Internet Tiered Hierarchy

For the past 15 years or so the Internet has been broken into three major tiers:

• Tier 1 – the backbone carrier. These Tier 1 carriers are facility-based, and carry the entire Internet routing table. Internet network providers normally acknowledged as Tier 1s include Verizon (formerly UUNET/MCI Internet), Sprint, AT&T, and Cable & Wireless.

• Tier 2 – regional and second level Internet networks. Also normally facility-based, however still rely on one of the Tier 1s for some routing and transit. This includes cable TV networks, CLECs, and international second tier carriers such as France Telecom Open Transit and Level 3.

• Tier 3 – Access networks and content service provider networks.

Peering is a concept that allows networks to have mutual agreements allowing the transfer of traffic directly between their networks, without having to use a higher tier network for that transit. Paid peering is how Tier 2 and Tier 1 networks charge smaller networks for accessing their backbones or allowing subscribers to their networks access to the rest of world Internet.

Network Neutrality assumes users will be able to control what kind of content or applications they produce or access, without regard to grade or quality of service. Thus, whether you pay for a dedicated, all-you-can-eat port, or if you pay a usage-based billing model, all you are paying for is the ability to send and receive packets at the rate agreed in your contract with an “upstream” Tier 2 or Tier 1 network provider.

Current legislation (HR5252) will give Tier 2 and Tier 1 carriers much more control over the content produced and applications used by both Tier 3 networks and content/applications providers, but also restrict how end users may be able to use network applications. An example most widely touted is voice over Internet Protocol, or VoIP. The Tier 1 and Tier 2 networks claim VoIP requires higher quality of service, and therefore places unreasonable demands on the backbone network. They further contend content service providers, such as Google and Yahoo, are able to provide their content to users without charge or fee to backbone network providers which are used as transit networks.

Originally verbiage in HR5252 included discussion on network neutrality. Network neutrality is the principle that “Internet users should be in control of what content they view and what applications they use on the Internet.” Since the beginning, the Internet has operated under the principle of network service provider neutrality, fostering technical innovations, development of online industries, and creation of a truly global community and marketplace.

The Internet was built with an idea of openness, which was only occasionally challenged by restrictive governments which believed it necessary to limit the freedom of the citizens to access and view open information. With IPv6 protocol, governments will continue to find Internet control a difficult proposition, as IPSEC will further harness their ability to limit or intercept data.

Carrier Hotels and Support of Network Neutrality

Carrier hotels are by nature real estate operations. Carrier hotels make money by leasing or licensing footprint, uninterruptible power, cooling, and interconnections. The more interconnections and networks present within a property, the more important that property became to the telecom and network provider community. The reasoning is pretty simple. If you are in a carrier hotel you can generally interconnect with another network or carrier through use of a local cross connect, and in some cases simply a “jumper” cable. If in a data center geographically separated from a major carrier hotel (such as One Wilshire, 60 Hudson, The Westin Building, or Telehouse ), or are a tenant in a data center operated by an existing carrier, then your cost of interconnecting with other network providers and carriers will be substantially higher.

A carrier hotel such as One Wilshire may have more than 300 carriers and service providers present as tenants within a single building. Most of those tenants will have a direct presence within a building-operated meet-me-room, allowing all carriers easy access to one another as all are within close proximity.

The carrier hotel is a location where Tier 3 and Tier 2 networks, as well as content and applications providers can directly interconnect. This allows those networks to “peer” without the need of sending traffic through a transit or large Tier 2 / 1 carrier. In many cases the smaller carriers and content or applications providers can peer as equals, with no money passing hands between networks. This is important in cases where a content provider may be sending a tremendous amount of traffic to users of a small network. Both the content provider and Tier 3 network will most likely have paid peering arrangements with upstream networks, resulting in both companies and their users paying for basically the same traffic.

Carrier hotels may also offer additional utilities or options for Tier 2 and Tier 3 networks to interconnect. Both One Wilshire and 60 Hudson operate utility packet exchanges, allowing packet networks (Internet and Internet Content/Applications) to interconnect through an Internet exchange. The Internet Exchange, such as One Wilshire’s Any2 Exchange, allows network and content providers to connect to the exchange with a single high speed connection, and then connect with any or all other exchange participants without the need of physical cabling or port consumption.

ByPass and the Packet Exchange

The Internet is a rich environment supporting constant development of advanced technologies, products, and communication-enabled services. Three areas which have seen rapid development, as well as growth, are voice over Internet Protocol (VoIP), interactive entertainment, such as multi-user gaming, and rich media on demand (video). All three require high performance access to end users, and all three have the potential of producing large amounts of network traffic.

In our broadband access world, most end users are connected to their network with high capacity lines, whether it be ADSL, Internet over CATV lines, or wireless. For the access network, getting large amounts of traffic to the end users is usually not a big concern, rather paying for large amounts of traffic or higher bandwidth ports may become a factor due to the high operational costs of connecting to an upstream network provider in a paid peering relationship.

To ensure a positive end user experience, which is clearly a necessity for customer retention, the access network and content provider need to ensure their users do not have “bottle-necks” or traffic congestion points between either interactive users, or content distribution end points.

The Packets Will Flow

The Internet was originally designed as a highly survivable network, allowing packets of information to route around blocks and failure points in any network. This ability to bypass blockages and failure points has an uncanny parallel in the dynamic of business relationships associated with the Internet.

Whenever an architecture or business model becomes too restrictive, an alternate model develops or emerges. The Internet community inherently wants neutrality, and has historically found ways to bypass restrictive networks and legal blockages, allowing users to freely communicate with each other, regardless of controls placed on network architecture, policy, security, and monitoring.

Like Internet packets, the Internet community will find ways around the Tier 1 and facility-based carriers attempting to restrict or limit applications and services on the public Internet.

VoIP and the End of Telephone Networks

VoIP is under close observation by the government, telecom industry, and most importantly the end user community. Pricing, call quality, and ease of usage are all important topics, as is future regulation and security implications of sending calls over a packet network.

VoIP not only has physical network performance concerns, but also must look ahead to the long term question of future convergence or integration of video, conferencing, application sharing, and network presence. Today’s world operates on a numbering system called E.164. E.164 is the International Telecommunications Union (ITU) recommendation for international and local telephone numbering systems. With VoIP the E.164 numbering plan gradually is replaced by network presence indicators, which simply “proxy” your desired identity on either a telephone or packet network, and announce your availability for either interactive or non-interactive communication.

Today a user’s instant messaging identity is the best example of an active network presence indicator, however even IM engines are rapidly adding interactive voice modules to their interface. That voice module could be either directly connected to the IM interface, or be “proxied” to the interface through a presence directory.

The near term “proxy” service is called ENUM. ENUM registries translate between E.164 telephone numbering and network IP addresses or identities. Within a neutral packet exchange, ENUM registries allow non-wholesale or backbone VoIP operators to query a database of other VoIP telephone numbers, and pass VoIP calls to other networks IP<->IP, bypassing any traditional transit telephone operators when completing or terminating “calls.” If VoIP operators have peering agreements in place, this substantially reduces the amount smaller VoIP carriers must pay to telephone transit providers when originating or terminating telephone traffic, allowing the operators to completely bypass telephone network for end-to-end VoIP calling.

As all networks continue their migration to packet telephony, even ENUM will gradually become obsolete. However, as a utility available within a neutral packet exchange, it could help many smaller networks save enough on operational expenses to survive for a much longer period than otherwise.

Content Distribution

Caching companies have been around for several years, with the most prominent (Akamai) having a presence in nearly every major data center. The reason is simple – put your content as close to the user as possible, and the user will get the best experience. Carrier hotels supporting packet exchanges fully support distribution of content. A company like Limelight, which distributes large volumes of media on demand finds a carrier hotel attractive, as it allows the media to bypass the need for an intermediate or transit network. The performance to an end user is then completely dependent on the performance of the access network.

If net neutrality is not protected under HR5252, then this issue becomes more acute. Both access networks and content owners will incur additional quality of service or volume charges for delivery of high bandwidth applications and content – such as VOD or streaming media. At a packet exchange the content provider is able to directly connect to all participants within the exchange, and in most cases deliver content directly through the exchange without paid peering.

Internet Service Provider Peering

The final benefit a carrier hotel, in particular a carrier hotel operating a neutral Internet or packet exchange, can offer is peering among their ISP community. In some cases the dynamics of Internet will justify sending a majority of traffic through a single Tier 2 or Tier 1 network provider. You may enjoy the best possible performance, for the best possible price. However, as the ISP continues to grow, the burden of paying transit or usage fees to an upstream network provider may justify direct peering relationships.

The carrier hotel easily accommodates both physical interconnections, as well as packet exchange peering. The packet exchange is best if peering is desired among a large number of peers, and the traffic volume is not too high. As traffic to a single network increases, shifting exchange traffic to a dedicated physical cross-connection is possible.


Carrier hotels and large neutral data centers are convenient locations for all tiers of Internet networks, content providers, and applications providers. Given concerns about the absence of effective neutrality verbiage within HR 5252 many Tier 2, Tier 3, and content/application providers are looking to carrier hotels and neutral Internet exchanges to help bypass Tier 1 transit. Bypass will allow smaller networks and content providers better network and application performance among participating networks, as well as reduced operating expenses incurred through usage-based billing or port charges.