Decline of Transit

Feb 22 2018

Complementary to the evolving network edge, the traditional hierarchy of backbone, access and enterprise networks is flattening, as echoed by The Internet Society 2017 report- Paths to our Digital Future. In the past, this hierarchy meant that backbone networks would exchange, or transit, traffic destined for access networks they did not directly connect. However, the increasing use of CDNs and the continuous growth of Internet Exchange Points (IXPs), where traffic is often passed directly to access networks, have reduced the need for transit traffic. Geoff Huston, Chief Scientist at APNIC, referred to this as “the death of transit”.

While these changes improve experience for end-users by reducing latency and jitter, and lower costs  for large-scale service providers, the cost of implementing capabilities such as CDNs and other close-to-the-edge service points puts smaller or emerging service providers at disadvantage. For example, large on-demand video providers can establish caches close to their users to provide better quality service while smaller providers are unable to do so. This trend may lead to consolidation and reduced competition in service offerings.

The potential implications therefore include reduced innovation in long haul networks and lack of choice for consumers. Internet infrastructure and economy will be at risk of being dominated by larger players having capability to invest at the edge unlike SMEs and start-ups, preventive of a healthy competitive ecosystem and next generation of permission-less innovation.

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