Home Asia-Pacific 2004 Opportunities and Perils of a Peer-2-Peer Internet

Opportunities and Perils of a Peer-2-Peer Internet

by david.nunes
Yves PoppeIssue:Asia-Pacific 2004
Article no.:11
Topic:Opportunities and Perils of a Peer-2-Peer Internet
Author:Yves Poppe
Organisation:IP Strategy Teleglobe
PDF size:124KB

About author

Yves Poppe, the Director of IP Strategy for Teleglobe, has spent more than 30 years in data communications. When the US National Science Foundation transferred the Internet to the commercial sector, Yves, in close cooperation with the R&E community, made the first transatlantic STM-1 available for next generation Internet connections between the North American and European R&E networks back in 1994. Yves participated in the G7 GIBN (Global Interoperability of Broadband Networks) initiative as a member of the Canarie Policy Board; he represents Teleglobe at the TERENA General Assembly, Internet2 and APAN. In 2001 he facilitated the first transcontinental wavelength connection at 2.5 Gb between SURFnet in Amsterdam and STARLIGHT in Chicago. Over the last year, as Director IP strategy, Yves has been spear­heading the Teleglobe IPv6 initiative.

Article abstract

Today’s Internet consists of 500 million people communicating through two million servers. These servers mediate practically everything on the Internet – users rarely communicate with each other peer to peer. The advent of Internet Protocol IPv6, with its huge address space, will overcome the addressing problems of IPv4, which has been in use since 1983. With IPv6, people and devices can be reached anywhere, any time. The impact on existing carrier business, and the opportunity for new business, will be far reaching.

Full Article

Today’s Internet essentially consists of more than 500 million people who, mostly, cannot call each other directly as we do with our cell phones. Most Internet communication is mediated by a couple of million major servers located in the middle of the network, which distribute web information and corporate data while e-mail is deposited and eventually accessed by the party it is destined for. Most users are hidden behind a NAT (Network Address Translator), not able to receive a call directly, a situation reminiscent of the days of operator-mediated telephone extensions. The equivalent of Direct Dial and DDD (Direct Distance Dial) is practically non-existent on the Internet. The irony is that the Internet was not supposed to be that way. Fathers of the Internet, like Louis Pouzin or Vint Cerf, envisioned an Internet where every end-point could reach any other without impediments. With the accelerating adoption of IPv6, the new Internet protocol, peer-2-peer communication will finally be restored. The Internet: suffocating under its own success On January 1st, 1983, the Internet was shutdown to change protocols, replacing NCP (Network Control Protocol) with IPv4. More than twenty years later the university network has evolved into the world’s premier commercial communication medium and witnessed the “Internet Explosion”. Remarkably, the same old IPv4 protocol is still used today. Now, however, the lack of end-to-end communication risks suffocating the Internet if it wants to be the network on which, ultimately, all communication will converge. Hence, the gradual transition to IPv6 initiated by a number of major network providers. The IETF designed IPv6 to coexist on the same network during a five to ten year transition phase. Key variables are falling in place for a spectacular new phase of telecom growth Coming out of the prolonged telecom recession, the industry is gasping for new revenue opportunities and a new era of growth. A consensus is emerging that this new wave of opportunities should come from the triple convergence of voice, data and image on integrated devices communicating seamlessly, any time, anywhere, any media. Prevalence of always-on digital access will provide the “any time”. Wireless broadband and mobility will provide the “anywhere”. Smooth handover between Wi-Fi and GSM and later Wi-Max and Mobile-Wi will provide the “seamlessness”. Unique IPv6 addresses will provide the global unambiguous addressability and hence “reachability”. Bandwidth available with 3G and other wireless technologies provides the “any media”. Another potentially huge revenue source the communication industry is eying are the phenomenal amounts of data that machine-to-machine communication is expected to generate in the next five years. Communication will no longer be dominated by man-to-man interactions or man-to-machine. Machine-to-man will gain in importance with location-based push services such as automatic dispatching. Machine-to-machine will ultimately dominate with sensor networks monitoring the health of everything and everybody. RFID tags will transmit data on the whereabouts and status of any organic and inorganic item imaginable, ranging from toasters to frozen meat and vegetables to passports and banknotes with embedded RFID chips. Only IPv6 can provide enough addresses for what could ultimately be a trillion communicating devices! The key drivers head for a perfect alignment for some, a perfect storm for others  Prevalence of always on digital access: Ovum estimated a worldwide total of broadband (essentially ADSL and cable) lines of 89.4 million at the end of third quarter 2003, an increase of 10 million over the previous quarter. It is safe to assume that the 100 million mark is widely passed by now.  Wireless Broadband: from 3G to Wi-Fi to Wi-Max and on to Mobile-Fi, ZigBee and ultrawideband. The spectacular success of Wi-Fi in homes and in public hotspots is slowly cutting the wire-line umbilical cord, at least within a 100 feet radius. The promise of Wi-Max with its radius of up to 30 miles and speeds up to 70Mb has even more far-reaching consequences. It could provide a considerable contribution to erasing most of the digital divide worldwide. Lower cost for Wi-Max, and its reach, could also be disruptive for some incumbents providing ADSL and cable access. Some are betting on Mobile-Fi as a standard before the mobility option is available on Wi-Max in 2006. ZigBee is another new entrant showing great promise, especially in sensor networks. This protocol will automatically detect the neighbours within communication reach and set up ad hoc dynamically reconfigurable mesh networks accordingly. Work and jockeying for position for ultrawideband is already occupying some industry heavyweights. A recent Business Week article (April 26th 2004 issue) quotes revenue estimates for Wi-Max jumping from zero in 2003 to US$5.4 billion in 2007 and projections for ZigBee to grow from zero to US$3.5 over the same period. Penetration of wireless broadband on such a scale could indeed presage major disruptive effects on business models of vast segments of the existing telecommunication product and services markets.  RFIDs and sensors: Steady progress is being made to lower the unit cost of RFIDs (Radio Frequency Identifiers) which will one day replace current bar codes and allow goods to be tracked in an integrated continuous process from manu­facturing, assembly, quality control, warehousing , shipping down to the retailer, the consumer and the consumer’s home where sensors would register maintenance and repair needs and transmit the information. The IDC research organisation estimates 17 billion traditional networkable devices by 2012, ranging from computers and handhelds to entertainment devices, appliances and toys. Extrapolating to a scenario of RFID-networked consumer goods multiplies the 17 billion number by an order of magnitude. Adding the countless sensor networks under consideration to collect environmental and weather forecasting data, crop monitoring, structural integrity in public constructions, perimeter and border surveillance, transport, agriculture etc. the astonishing figure of 1 trillion communicating devices within a decade put forward by Sun Microsystems becomes entirely plausible. Early modelling and industry trials show huge potential savings at every point in the supply chain between origin and end-user. The amount of data is mind-boggling: Wal-Mart estimates traffic in the terabyte range if items they sell are RFID labelled.  IPv6 and globally unique network addresses: The current IPv4-based address scheme is coming to the end of its useful life. All major Internet router manufacturers, including Cisco, Juniper and Hitachi, have IPv6-ready products and operating systems. End-user device manufacturers, including Nokia, Sony and Ericsson, are putting IPv6-enabled products on the market – as are the major software suppliers, including Microsoft and IBM. The 128-bit addresses of IPv6 will easily accommodate unambiguous communication of the trillion nodes in the “Internet of things”. IPv6 also enables auto-configuration which, beside sufficient address space, is the second prerequisite for a totally mobile and self reconfiguring network where countless nodes will be on the move. A third advantage of IPv6 is the mandatory support of Ipsec, which improves end-to-end security. In Asia, the main motivation for IPv6 is a real address shortage. Europe sees IPv6 as a road to 3G and general mobility. In North America, a false comfort of ample address space led to a wait-and-see attitude, until the US Department of Defense announced that as of October 2003 all Requests for Quotations would make IPv6 mandatory. The long road to a converged voice and data network The converged network has been the holy grail for more than two decades. In the early 1980s, in the dying days of the old telephone monopolies, broadband ISDN was supposed to be the ultimate network. A good twenty years later, liberalisation, the personal computer, high- speed fiber optics and the Internet changed the way the future was supposed to be. The phenomenal story of cellular, from a zero start in 1983, paved the way to the expectation of an increasingly wireless world. In the late 1990s, VoIP started to attract venture capital; but the effort fizzled in large part because of the lack of easy access to the predominant PSTN (public switched telephone network) based telephone population. Voice over data was used to arbitrage high international per minute telephone charges and accounting rates. The traditional TDM-based telephone network, with its huge installed base, showed a lot of resilience; and long-distance and international telephone rates experienced considerable declines in per minute rates. The last 12 to 18 months has seen the second coming of VoIP, now suddenly adopted by major traditional carriers as replacement for their ageing TDM base. The long-awaited convergence finally started in earnest. Probe Research shows TDM-based international voice traffic peaking in 2003–04 before starting a gradual decline, with VoIP overtaking TDM in 2007. In the corporate market, a similar phenomenon is developing as corporations increasingly consider IP switches to replace their ageing PBXs and look to IP-based VPNs and MPLS-based networks to replace older frame-relay and ATM networks. The killer applications: mobility and plain old voice If you access the high-speed Internet in your hotel room today, you will be assigned a temporary address and you will be unreachable. In the IPv6 world, your device (laptop, PDA, IP phone) will connect locally using the IPv6 auto-configuration features and be reachable. Ditto if you access a WiFi hotspot. Over the next decade, the very nature of telephone business will evolve as telephony end-devices will increasingly be called on their unique IP addresses. This will lead to the ultimate death of distance first predicted by Frances Cairncross in seminal articles in the Economist back in 1995 and 1997. Indeed, an IP-to-IP call will make telephony calls undistinguishable from all other data. Long-distance revenue will also have converged into the mostly flat rate Internet monthly subscription charges. This transition will take time but is unstoppable, as a growing number of carriers embark, sometimes reluctantly, on the VoIP bandwagon. The success of Skype and SIPphone only accelerate the process. Perils and opportunities: ­survival of the fittest The next battleground on the road towards a converged universal IP environment will probably be cellular telephone. For many carriers, the collapse of wire-line voice long-distance prices has been compensated by cellular, where national and international roaming charges easily result in 1 or 2 dollar per minute charges reminiscent of the monopoly’s heydays. The advent of Wi-Max and similar technologies will make the long-distance cellular market a tempting target, with the prospect of substantial cost savings to the user and substantial revenues to the new provider. Ultimately, peer-2-peer calls based on IP addresses will also dominate and convergence will take another step. Carriers will have to watch the evolution and ultimately adapt again. While providers and consumers continue to force communication costs down, US$3.5 billion was spent on ring tones. Over 300 billion paid SMSs (short messages) were sent over the world’s cell phone networks in 2003. The once laughed-at notion of microbilling turned out to be a major source of revenue. One can only dream what a world of a trillion communicating items is bound to generate in revenues for the fittest.

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