Today there are challenges in the ecosystem of internet traffic. The ecosystem of internet traffic is typically based on relationships two general categories. In the peering relationship, ’sender keeps all’ and there is no financial settlement. The geographical footprint and customer base are usually of a similar size for network operators who peer. In the transit relationship there is an imbalance usually in terms of size or traffic flow symmetry which is reflected in a financial settlement between the two parties involved.
A typical diameter of an internet traffic flow is four commercial domains, yet there is no economic mechanism for the four domains to be connected economically. The predominance of the ‘sender keep all’ and the absence of a ‘sender pays’ model means that there is economic disparity, between network traffic sources, network traffic carriers and network traffic sinks.
The ‘sender keeps all’ model breaks down as asymmetry imbalances grow – network operators who sink the traffic are not compensated for the use of their network resources. This is becoming acute as traffic asymmetry imbalances grow bigger and bigger as a result of video traffic explosions.
The ‘sender keeps all’ places acute pressure on access network providers who sink traffic that is sourced from within another commercial domain as they have to carry the exploding taffic volumes for free. In addition they have a disincentive to invest.
Web companies leverage this structural deficiency in the ecosystem of internet traffic. Web companies are able to source traffic on one network and pay the local access costs, yet the first mile provider is not able to collect any revenue. The telco is squeezed with low margins and an ecosystem of application providers and content owners who can send traffic for free.
RedZinc solves this problem by making an economic link between the originator of the traffic and the network which sinks the traffic. RedZinc enables a telco to sell wholesale differentiated services to upstream organizations, be they other carriers, content delivery networks, content owners or web applications providers. RedZinc’s solution supports a ‘sender pays’ model for the age of the zettanet which gives superior network economics.