(No.194) Localization of Data and its Implications for Economic Development

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Workshop Theme: 
Managing Critical Internet Resources
Theme Question: 

What can we learn from countries who have implimented local data directives, with a focus on economic impact, and what can developing counties expect as challenges and tradeoffs when they look at implimenting local data directives?

Concise Description of Workshop: 

The US, EU, India and many other Countries are looking into laws and regulations designed to implement new codes or strengthen existing ones covering the storage, security and use of personal information about their citizens. In our digital age an individual’s name, photo, e-mail address, bank details, posts on social networking websites, all of this personal information and much, much more passes effortlessly around the globe at the speed of light. This information often resides in a network of data centers, server farms, Network Operation Centers (NOCs) and similar “core” facilities all under the generic name "BIG DATA" deployed all over the globe that ARE the essential facilities that manage internet traffic.
Recent years has witnessed an explosion of “smart” devices servicing the “edge” of the internet. The reality is that the “smart” in the new phones, tablets and other devices resides not in the phone or devise but in the facilities deployed at the “core” of the internet. It is in these “core” facilities that your information is often “cashed” or stored for quick retrieval. The efficiency, processing power and storage available through “cloud computing” has profoundly changed the way information is handled and stored. Your smart devise or set top box is programed to fetch the movie or application you have request form where it is “cashed” or stored which is in a data center or server farm.
Establishing and enforcing an individual’s rights regarding all aspects of their personal data in these new global digital delivery and storage systems presents many new challenges. Our workshop will host a number of experts. We will host an expert who will discuss and site examples of how developing countires "get started" building localized data using IXPs. We will also have a network expert who will cover the new internet architecture, a hub and spoke arrangement with huge data centers "BIG DATA" at the hub pushing information out to smaller regional data centers and server farms that are located close to urban centers to ensure prompt data deliver. We will have government official who are tasked with the responsibility of responding to citizen’s concerns regarding the security and use of their personal information. We will also have senior officials from the major global broadband platform companies, tech companies and consumer interest groups. Finally we will have a senior economist who will address the economic impact the proposed laws and regulations on data use and storage will have on businesses (their compliance costs) etc., on citizens (potential added costs to credit), and the costs that will incur to the overall economies of the countries impacted by these laws. 
  We will provide ample time for audience participation.
Managing Critical Internet Resources
November 8th, 14:30-16:00
Room #11
(Agenda for Panelists)
Welcoming remarks: Vlada Radunovic, DiploFoundation  (Moderator) (2 minutes)
Setting the Stage: Ambassador David Gross, Partner, Wiley Rein, LLP. (5 minutes)   
Each speaker having 5 minutes for main part, discussing various aspects associated with the localization of data (BIG DATA) in a three part forum. We will have enough time for audience questions. This should be informative and interactive.
Theme Questions:
Is the localization of data a benefit, a curse, or is this way of viewing the issue to restrictive? With the continuing onrush of disruptive technologies, how should we look that is important issue?
Opening…Audience Question and Survey:   When you think of the localization of data…or the phrase …BIG DATA…what do these terms mean to you?  (8minutes)
Part 1:  Internet Architecture by the experts [15min]

  • Bill Woodcock, Packet Clearing House, IXPs and their importance in the localization of data
  • Robert Pepper, Cisco, how data is moved and stored in today’s global networks
  • Audience participation

Part 2: Data viewed from the “ground level” – examples [20min]

  • Naveen Tandon, AT&T India, localization of data discussed from the perspective of a major carrier in a fast growing country.
  • Jimson Olufuye, Nigeria, (AfICTA) African perspective and from a small local data farm perspective.
  • Ko Fujii, Google Japan, where is data stored and why is it stored there?
  • Audience participation

Part 3: Economic and Private Sector impact of Data Regulations [20 minutes]

  • Sam Paltridge, OECD Economist, economists perspective on the free flow of data vs. restrictions on the flow of data
  • Jacquelynn Ruff, Verizon, global carriers perspective on data regulations, the localization of data
  • Audience participation

Panel Summing up and Audience Engagement [20min]
Virginia Paque, DiploFoundation, Remote Moderator
Jacquelynn Ruff, Rapporteur

Backgroung Paper: 
Organiser(s) Name: 

Garland McCoy, Technology Education Institute, (US)
Vladimir Radunovic, DiploFoundation (Serbia)

Submitted Workshop Panelists: 

Ambassador David Gross (US) (Confirmed)
Naveen Tandon, AT&T (India) (Confirmed)
Robert Pepper, Cisco (US) (Confirmed)
Bill Woodcock, Packet Clearing House, NGO, (US) (Confirmed)
Jacquelynn Ruff, Verizon (US) (Confirmed)
Jimson Olufuye fncs, ficma, Chair Africa ICT Alliance (Nigeria) (Confirmed)
Sam Paltridge, OECD Economist (Belgium) (Confirmed)
Ko Fujii, Google (Japan) (Confirmed)

Name of Remote Moderator(s): 
Virginia Paque, DiploFoundation (Venezuela) Remote Moderator
Gender Report Card
Please estimate the overall number of women participants present at the session: 
About half of the participants were women
To what extent did the session discuss gender equality and/or women's empowerment?: 
It was not seen as related to the session theme and was not raised
Please include any comments or recommendations you have on how to improve the inclusion of issues related to gender equality and: 

Our workshop on the Localization of Data had one female panelist, Jacquelynn Ruff from Verizon and we did have a solid 50/50 split of men and women in the audience but the topic is one that does not have any particular gender issues related to it (at least not that I can think of) but it is an important issue that has an impact on both men and women.

Reported by: 
Garland McCoy, Technology Education Institute
A brief substantive summary and the main issues that were raised: 

Workshop #194
“Localization of Data and its Implications for Economic Development”
November 8, 2012
Vlada Radunovic from DeploFoundation was the moderator and he began by introducing Ambassador David Gross who delivered the opening (setting the stage) remarks for the workshop. David began by reminding the audience (both the audience in the room and the remote audience) about the huge amounts of data that are uploaded onto the internet every day and downloaded every day. Youtube, Hulu, Netflix, government date, email, were all cited and David raised the question “where is all this data, content, stored and how do we access it?” “Who cares about the security of this data and the looks after the privacy concerns associated with huge amounts of stored but accessible data?” David asked the audience. David cited the policy challenges, economic challenges and environmental challenges associated with the advent of huge data centers that are popping up to handle the exponential growth of data on the internet.
Vlada next introduced our fist panelist, Bill Woodcock of Packet Clearinghouse, who delivered an easy to understand explanation of how data moves through the internet. He discussed the relationship between the internet exchanges and the internet infrastructure. He spoke about the significant cost savings associated with setting up IXPs which facilitate the exchange of local (in-country or region) calls and data. He spoke about how traffic is routed through the internet with every digital packet going through one internet exchange point and the concept called “hot potato routing” where outbound traffic takes the shortest path. He spoke of the importance, from the perspective of an ISP , to minimize your costs by getting packets off your network as quickly as possible as this is to the customers benefit. He spoke of how data is cloned (copied) again and again to move it closer to the consumer. The cost of replicating data is very low so it is sent out to as many local servers as possible to bring it closer to the consumer. He stressed the importance of exchange points being neutral, not being aligned with any particular market operator.
The next panelist to speak with Robert Pepper from Cisco Systems who delivered a power point presentation on the Visual Networking Index study which looks at data traffic and a similar study called Cloud Index. These studies look at data center and cloud traffic, workload, transition and cloud examples and how people are using cloud services. The studies all point to the significant growth rate of data center traffic globally. He stressed that 75% of the traffic stays within the data centers (data center to data center traffic as content is cloned and distributed) and he spoke of the efficiencies of scale, so that bigger is better in the data center world!
Robert noted that the growth in use of cloud services and traffic is being driven by consumers in large part. He defined cloud as shared access to things like voice, video, data processing, computing. So it is a demand type of service that is shared. So in four more years Robert said, two-thirds of the traffic will be cloud based. It’s taking the desktop and putting it in the cloud. Right now cloud applications are being driven largely by video and video on demand which of course is the consumer. Robert ended his remarks by talking about the need for robust delivery of data for public purpose applications like healthcare and education and he spoke of the need for developing countries to consider moving from 2G directly to LTE to ensure they have the bandwidth and he noted that the LTE technology has lower latency because of its design.
Both Robert and Bill agreed that having IXPs (local exchange points) and local data storage and delivery is to everyone’s advantage. If you are providing services locally, nobody is at a disadvantage. There are 340 data IXPs all designed to localize the data exchange and data centers are always build (clustered) around exchange point (hot potato concept).
There was audience participation, both remote and in room and the discussion centered on the need for the exchange points to be neutral, not controlled by the government or by a carrier. Bill pointed out that the cost of putting in an IXP is returned in a matter of days because the IXP creates valuable bandwidth. Traffic that once had to travel outside the country or region can now stay inside the country or region freeing up valuable bandwidth. There was also discussion of the need to build many Tier 1 capacity fiber connections to handle the traffic between data centers. Supper high speed capacity is needed to handle traffic between the data centers.
Bill woodcock mentioned the five things you need in the network as an answer to an audience question, you need; local loops to reach end users, domestic backhaul, international transit, multiple ways to get in and out of the country, and a regulatory environment that makes all of this work.
Next we heard from Naveen Tandom of AT&T in India and he spoke of the sovereign need to protect the data in country. He spoke on the need to have interoperability capabilities and recognition of standards and certifications. He cited India’s data laws and gave an example where you can’t take customers data, like billing data, out of the country. There was discussion about the fact that India has 7 exchange points but only two are in active use because the other five are not trusted because they are not seen as truly neutral. Again it was stressed that these exchange points need to be neutral for them to be trusted and used by all the carriers (ISPs). Bill said that India needed more IXPs and faster IXPs.
Next we heard from Jimson Olufuye who runs an ICT company in Nigeria that manages among other things, data facilities. Jimson, with his ICT colleagues built and association called the Africa ICT alliance and they have built 6 IXPs in the region. He stressed the fact that the content is in a local language and the importance of working with the government to address issues and to help get the right laws and regulations in place.
Ko Fuji from Google was the next speaker and he talked about the fact that Google was a cloud-based internet company serving both companies and consumers alike. He listed some of the consumer services; gmail, YouTube, search and maps that were cloud services with shared access. He mentioned that the cloud gives end users flexibility on how access their information, what devices they use; mobile devices, fixed wired devices etc. He listed some of the criteria that Google looks at when they select a location for one of their data centers; proximity to reliable networks and bandwidth, proximity to end users, political stability of the host country and its laws and regulations, also important is an available skilled work force and the availability of abundant and affordable power (with an emphasis on renewable power sources and the environment). He stressed, as others had, that data centers consume a lot of energy. He cited the web site where people could go to take a virtual tour of one of Google’s data centers and see the location of some of the centers.
Next up was Sam Paltridge and economist with the OECD who also had a power point presentation. He documented that when you put taxes, fees and regulations on voice and data moving into and out of a country the volume of voice and data declines dramatically. His presentation documented country after country that had put termination fees on voice and data only to see their volume drop and their tax revenue decline. His presentation sent a clear message that countries looking to fill their treasuries on the backs of taxes and fees on data flows in and out of their countries that revenue path disappointing.
We wrapped up the workshop with a presentation from Jacquelynn Ruff from Verizon who spoke of the significant investments made by Verizon and others in the network and how cross boarder agreements on data flows and spectrum use are essential. She discussed the concerns about government intervention in systems that are working and the need for a multi-stakeholder process.
We had a solid engagement with the audience and had several remote participant questions. We have a lot more to discuss on this topic and every member of the panel hopes we can continue this topic discussion at next years IGF

Conclusions and further comments: 

We just touched the surface of this important, dynamic and evolving issue. "Big Data" is becoming more and more a part of the internet structure and we should continue to discuss this topic.