Andrew Haynes NextGen 09

© 2009 Level 3 Communications, LLC. All Rights Reserved. Level 3 Communications, Level 3, the red 3D brackets, the (3) mark and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.

Just Plain BandwidthComplexity may be big, but it’s not clever

Next Gen 2009Leeds, November 2009

Andrew HaynesDirector, European Product Delivery

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2009 Level 3 Communications, LLC. All Rights Reserved. 2

Exceptional Global ConnectivityLevel 3 continues to be the world’s most connected ISP

About Renesys and Backbone Customer Base:Renesys (www.renesys.com) is an independent network intelligence company who’s tools provide service providers a real-time view of the global Internet. Renesys measures “Customer Base” as a means of ranking providers who are responsible for meeting the Internet transit needs of large customer networks within a given market.

Renesys® “Customer Base” Rankings(June 15, 2009)

Rank Service Provider Rank Service Provider Rank Service Provider1 Level 3 Communications 1 Level 3 Communications 1 Level 3 Communications2 Global Crossing 2 Sprint 2 Sprint3 Sprint 3 TeliaSonera 3 NTT4 AT&T 4 Global Crossing 4 Global Crossing5 Verizon/MCI 5 Tiscali 5 China Telecom6 Savvis 6 Deutsche Telekom 6 TeliaSonera7 Cogent 7 Teleglobe/TATA 7 Savvis8 Teleglobe/TATA 8 Verizon/MCI 8 KDDI9 Qwest 9 Cogent 9 AT&T

10 XO 10 France Telecom 10 Verizon/MCI

Date:15/06/2009

North America Europe Asia

http://www.renesys.com/

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European PresenceDelivering Extensive Reach with Local Connectivity

In 28 IP PoPs across Europe, connecting 92% of European eyeballs in 1 hop

More than 280 on-net buildings

2.6 Tbps of customer facing port capacity

640 Gbps of interfaces with our peers (EU)

480 Gbps of TA capacity dedicated to IP

65% of our traffic is on-net giving us an unmatched control of our SLAs

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Level 3’s Content Delivery NetworkBroadcast enabling the Internet

Built into Level 3’s IP network• HTTP Caching; Move Networks and Microsoft Smooth streaming• WMS and FMS Streaming• Origin storage and extended library content

4,000 servers deployed in 31 strategic locations designed to accommodate the most demanding flash crowd situationsGlobally load-balanced and intelligently managed with no reliance on third parties

Benefits to ISPs• Content cached and

streamed directly to customers from local sites

• Enhanced quality of experience for customers

• Benefits to content providers• Ability to balance between

HSIP and CDN as needs change

• Resilience and redundancy

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From Creation to Consumption

The Level 3® IP backbone has a global throughput of over 20 Petabytes of traffic per day, which is equivalent to transmitting over 1,000,000 x 20GB movies per day.

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What are we delivering today?

Video consumption moves online Almost all TV will be on-demand and

consumed over IP networks Majority of content to be HD Ready by

2018 More pronounced shift to broadcasting

linear content over IP Wide range of specialist independent

channels, at the expense of existing broadcasters

DVD content is downloadable (new DVD rental models)

P2P is decliningSource: Analysys Mason, Nov 2008

Bandwidth composition as a result one minute of medium-quality video equates to around 7-10MB of data Expecting 2Mbps / broadband line by 2018 (average annual growth 55%)

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The Brick Wall

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An ISP perspective- cost of delivery

AccessNetwork

National Infrastructure and “Middle mile”

Transit & Peering Infrastructure

50%50%

47.5%47.5%

2.5%

ISP Costs$/sub /month

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ISP ArchitecturesWhen is an IP Network not an IP Network?

Traditional “ULL” or Cable architecture Centralised interconnect points Redundant IP equipment acting as an extension cord to content Excessive router hops Centralised BRASes (meaning the IP layer isn’t an IP layer) Inefficient transport usage

Why does growing usage/sub (video) damage this? Unidirectional flows (so in-out infrastructure is wasted) Not from anywhere to anywhere (so why pay for the router hops)

Community based initiatives – by their very nature are less likely to get caught in this trap – how complex can an extension cord to the internet get?

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ISP StrategiesPeer it all!

Many ISPs place almost all of their effort on reducing the percentage of traffic that travels over their transit links – but at what cost? Building national and international networks Constant political battles over peering Reliance on single interconnect points Hot potato receive (ie you have no control over where you receive the traffic)

• Hence expensive on infrastructure (router and DWDM hops)

Peering has it’s place – but as soon as it’s more difficult than simply plugging into a cheap wholesaler – the question of cost/benefit comes back – is it really worth it?

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ISP Strategies Backtracking on the original promise – neutral internet connectivity for a fair price

Billing consumers for what they use: Issue with mainstream ISPs is that consumers aren’t using an Nth of what they were sold –

so why the surcharges? Also, in a deeply competitive environment, first mover will lose subs Community networks may have an opportunity to redress this (as fairness comes more into

play when the initiative isn’t owned by a corporate behemoth)

Meanwhile, the large ISPs have become increasingly public in their criticism of Content companies “Why is content sending all of this traffic into our network?”

QoS, Walled gardens, Self-CDNing If regular network is fine, why pay (or are your threatening untagged traffic) All predicated on choking traffic from content sources that won’t pay the ISP Adds cost to your network (and who will pay?) How will your customers feel about this? What exactly does an ISP know about servicing ultra-high quality conscious CDN

customers?

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ISP StrategiesRecipes for Success

Get comfortable with what you can’t controlTraffic volumes typically double every 12-15 months – revenue doesn’t Attempts to limit traffic growth will result in dissatisfied (or lost) customers “Running to stand still” shouldn’t be avoided – it should be a core competency

Control what you canNetwork Costs in Architecture and Equipment (FTTx or WiMax/WiFi?)Find the cheapest backhaul you can – this will be a rising cost of businessPeer when appropriate (typically want Gbps of traffic to make sense), not as a religionFind the right balance between buying transit very locally (at a premium) or paying for backhaul to reach open market wholesale interconnect points

If the problem is cost, complexity isn’t likely to be the solution Don’t build what no-one wants and don’t overcomplicate your business model

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Breaking the video barrier

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Thank You

For more details please contact: [email protected]

Technology

Andrew Haynes NextGen 09