States Should Use BEAD Funds to Finance Internet Exchange Points

DENVER, August 9, 2023 – Experts urged states during a discussion at the Mountain Connect conference Tuesday to set aside a percentage of their Broadband Equity, Access and Deployment allocations for building internet exchange points in their state.

Internet exchange points are facilities where local ISPs, transport networks, content networks, cloud services, education networks, and others exchange data traffic. In the United States, 14 states and 3 territories have no IXPs and another 3 states are functionally limited, with not enough IXPs to handle traffic at high speeds, the conference heard.

Large distances between IXPs and end destinations create large lag times, said Hunter Newby, chief strategy officer of service provider Telx and partner with internet access solutions non-profit Connected Nation to establish carrier neutral IXPs in regional hub cities and towns across the nation.  A carrier neutral IXP is not owned by any one carrier, which means that any provider can build into the data center without concerns about unfair competition.

If states have an IXP in their state, the cost per home is a “magnitude or two less” than those that do not have an IXP they can back into, said Newby. The cost to build last mile infrastructure will get wiped out by the backhaul bill that connects last mile to the internet, Newby warned.

Building new IXPs will reduce latency and will create a level playing field for competition in regional hub communities across the country, added Brent Legg, vice president of Connected Nation. If the U.S. doesn’t build out this infrastructure base, it will enable a technology application divide to form because some people won’t have access to low latency connection required for some advanced applications.

Interconnection must start somewhere, and it must start with IXPs, added Legg. The element of middle mile ecosystem needs to change, not just last mile builds, he said, referring to the $42.5 billion that was allocated as part of the BEAD program in June for last mile network builds.

Legg said that the National Telecommunications and Information Administration’s Enabling Middle Mile program did not fund any IXP projects when it announced awards in June, despite receiving several IXP applications. Not funding IXPs will severely limit the base infrastructure level of the internet, he said.

Middle mile builds are authorized under the BEAD program if they connect to new last mile addresses. Legg encouraged state broadband officers to set aside a percent of their BEAD allocations for investing in carrier neutral IXP services in university campuses and hub communities in their initial proposals, due by the end of the year.

States must build IXPs that are distributed, robust, supported, and deemed credible and that will foster a neutral environment so that over time, servers will be localized in areas that need it, concluded Newby.