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A new study commissioned by the Internet Society quantifies the economic benefits of establishing Internet Exchange Points (IXPs) in emerging markets, particularly in Latin America.

The Internet has become more globally available, so much that the interconnection between networks and content providers has become crucial in creating a “network of networks.” At the hub of this globalization are IXPs, facilities where all Internet providers can interconnect directly to each other, thereby improving quality of service and reducing transmission costs to users.

“This study highlights the critical role that IXPs are playing in Latin America – from human capacity and network development to better quality of service and increased uptake of services,” said Sebastian Bellagamba, regional bureau director for Latin America and the Caribbean at the Internet Society in a statement. “Offering more than just cost and performance benefits, well-run IXPs serve as a catalyst to dramatically enrich a country’s Internet ecosystem, opening a new world of possibilities with comparably minimal investment.”

IXPs have made reduced telecommunications costs possible while providing faster and better local data exchange and local technical capacity development in emerging markets such as Argentina, Brazil, Colombia and Ecuador.

Here in the United States, we have the Big Apple (News - Alert) Peering Exchange which similarly exists for the purpose of exchanging Internet Protocol (IP) traffic.

The Internet is global system of interconnected networks, and exchanges provide a marketplace for Internet Service Providers (ISPs) to interconnect to these networks directly and exchange IP traffic, avoiding one or more third party networks.

Connected groups can send and receive traffic directly from each other rather than traversing others. This translates to increased speeds and reduces latency, as traffic travels between the networks directly without an intercessor. It also improves routing, efficiency, and fault tolerance by increasing available paths.