Network Working Group J. Arkko
Internet-Draft Ericsson
Intended status: Informational B. Trammell
Expires: January 10, 2020 ETH Zurich
M. Nottingham
Fastly
C. Huitema
Private Octopus Inc.
M. Thomson
Mozilla
J. Tantsura
Apstra, Inc.
N. ten Oever
University of Amsterdam
July 09, 2019
Considerations on Internet Consolidation and the Internet Architecture
draft-arkko-iab-internet-consolidation-02
Abstract
Many of us have held a vision of the Internet as the ultimate
distributed platform that allows communication, the provision of
services, and competition from any corner of the world. But as the
Internet has matured, it seems to also feed the creation of large,
centralised entities in many areas. This phenomenon could be looked
at from many different angles, but this memo considers the topic from
the perspective of how available technology and Internet architecture
drives different market directions.
Status of This Memo
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This Internet-Draft will expire on January 10, 2020.
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1. Introduction
Many of us have held a vision of the Internet as the ultimate
distributed platform that allows communication, the provision of
services, and competition from any corner of the world. But as the
Internet has matured, it seems to also feed the creation of large,
centralised entities in many areas.
We use the term Internet consolidation to refer to the process of the
increasing control over Internet infrastructure and services by a
small set of organizations. Such concentration has an obvious effect
on traffic flows or on services and systems that are daily used by a
large population of Internet users. However, it can also create
secondary effects, where the ability to collect information or to
affect something is concentrated in that small set of organizations.
Consolidation may also affect technology choices and the evolution of
the Internet architecture. For example, large organizations or
organizations providing important technology components may have a
significant impact on what technology is deployed for large numbers
of users or by other organizations.
Our first question is whether the Internet is indeed consolidating.
It certainly appears so, but more quantitative research on this topic
would be welcome. It is also possible that there is only a
perception of consolidation, as market forces have caused business
changes in new areas of business. Arguably, today's consolidation
areas seem to be more in the application layer than further down in
the stack or in operating systems, as was the case some years ago.
The second question is if we are seeing consolidation simply moving
to new areas.
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This phenomenon could be looked at from many different angles, but
this memo considers the topic from the perspective of how available
technology and Internet architecture drives different market
directions. Our third question is if the Internet technology has
influenced the consolidation trends in some manner. And conversely,
the fourth question asks how Internet consolidation is influencing
the development of the Internet infrastructure and architecture.
The engineering remit at the IETF is to focus on technology, but of
course we also want to understand the implications and externalities
of the technical arrangements we design. Technology affects
economics and vice versa. The Internet technology community
continues to make decisions that have ramifications on Internet
systems, just as we are subject to forces that affect them.
As technologists, our fourth question is whether there are changes in
technology that would help reduce those large-player advantages that
are technically-driven.
This memo reviews areas where consolidation may be occurring in the
Internet, and discusses the potential reasons for this. The memo
starts by reviewing other work in this area in Section 2. Section 3
discusses consolidation and the reasons behind the creation of larger
entities, and Section 4 looks at some actions that might alleviate
the situation.
If you are interested on this or other architecture-related topics,
please subscribe to the IAB architecture-discuss mailing list as one
forum for discussion. Similarly, the Internet Society has chosen
consolidation as a focus topic for their year 2019 activities. Their
report is in [ISOC].
2. Other Work
One of the causes for the current consolidation of the Internet
infrastructure can be traced back to some of the assumptions that
were made during the commercialization of the Internet in the early
1990s [Abbate], despite [RFC1192] describing some potential issues
that could arise. Overall it was expected the combination of
commercialization, together with the technical and architectural
characteristics of the Internet, such as its modularity and layering
principles, would lead to perfect markets, free competition and
decentralized structures [LitanRivlin].
But as we know now, this did not happen entirely as expected. Some
even argue that 'market concentrations, control and power struggles
are categories to adequately describe the fundamental dynamics of the
commercial Internet' [DolataSchrape]. While the privatization was
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supposed to lead to competition and innovation [Cowheyetal]
[VanSchewick], some argue that it actually led to the emergence of
Internet oligopolies [Mansell] [Smyrnaios].
Current scientific economic thinking harbors two different schools of
thought vis-a-vis efficient markets and monopolies. The school of
thought based on Adam Smith argues that unfettered markets tend to
concentration of wealth and income, whereas liberal economists
believe in efficient markets that stimulate competition.
On the other hand, according to Joseph Stiglitz, 'many sectors -
telecommunications, cable TV, digital branches from social media to
Internet search, health insurance, pharmaceuticals, agro-business,
and many more - cannot be understood through the lens of competition'
[Stiglitz]. The considerations of technologists and policy makers at
the time of the commercialization and privatization of the Internet
infrastructure might have been based on a belief in efficient
markets, whereas we are now finding out this might not always be how
markets function.
Recently there is a growing body of literature that the currently
observed consolidation into oligopolies and monopolies can be
described as a failure of economic policy, which could be addressed
with revamped, or improved anti-trust policies [Wu] [Khan]. On the
other hand there are those who criticize these proposals for their
economic determinism; merger reviews, company break-ups and
'trustbusting' do not necessarily change the structure of a market.
Technology might actually have a role to play in this as well. The
IETF in specific, and the Internet governance regime complex [Nye] in
general, has been designed as a distributed arrangement to prevent
capture of the infrastructure by a single interest group or actor.
Where power or control was centralized, specific governance
arrangements were put into place to counter the centralization of
power.
It cannot be denied that 'market actors have contributed immensely to
the evolution of the Internet in terms of investment, products,
services, and infrastructure, and the government's light-handed
approach to regulation has given producers and consumers substantial
freedom to innovate and to self-regulate with respect to many issues
affecting the Internet community in ways that have produced
substantial social benefits' [Frischmann]. But the current
consolidation in ownership of and control over the Internet
infrastructure was not foreseen [Clark], and arguably the loss of
decentralized control goes against its design objectives. For
instance, [RFC1958] says:
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This allows for uniform and relatively seamless operations in a
competitive, multi-vendor, multi-provider public network.
and
Heterogeneity is inevitable and must be supported by design.
And [RFC3935] says:
We embrace technical concepts such as decentralized control, edge-
user empowerment and sharing of resources, because those concepts
resonate with the core values of the IETF community.
3. Factors Driving Consolidation
Consolidation is driven by economic factors relating to scale and
ability to easily reach a large market of users over the Internet.
This kind of setting tends to enable winners to take large market
shares, whether those winners came about through the model that
liberal economists believe in or the model that Adam Smith believes
in.
The most visible aspects of this involve well-recognized Internet
services. The Internet Society's report summarised the market
position of popular Internet service brands as follows [ISOC]:
o Facebook and Google have been estimated to account for 84% of
global digital advertising investment (excluding China).
o Amazon is expected to account for 49.1% of all online retail
spending in the US. Similarly, Alibaba is estimated to have close
to 60% of the e-commerce market in China.
o Google alone holds 90% of the global search market, over 60% of
web browsers, and has the number 1 (by far) mobile operating
system (Android).
o Facebook - incorporating Facebook Messenger, WhatsApp, and
Instagram - holds 4 of the world's top 6 social media platforms.
But it is important to recognize that the Internet is a complex
ecosystem. There are many underlying services whose diversity, or
lack thereof, are as important as that of, say, consumer-visible
social networks. For instance, the diversity of cloud services,
operating systems, and browser engines is as important as that as of
application stores or the browsers themselves.
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Of course, the Internet allows plenty of choice in these and other
areas. Too many or too few choices create different kinds of
problems.
It would be useful to break these general factors and observations
down a bit further. In particular, it is useful to distinguish
market or economic factors from technical factors.
3.1. Economics
Scaling benefits are natural for many types of businesses. And many
Internet-based businesses can potentially serve a very large customer
base, as the cost of replicating and delivering their service to new
customers or areas is small.
However, typically the network effect has an even more pronounced
impact. Each additional user adds to the value of the network for
all users in a network. In some applications, such as the open web,
this value grows for everyone, as the web is a globally connected,
interoperable service for anyone with a browser can use.
There is an important distinction between different applications of
the network effect, however. Consider email as another example;
anyone with an account at any email server can use it globally.
However, here we have seen much more consolidation into few large
email providers, both due to innovative, high-quality services but
also because running email services by small entities is becoming
difficult; among other things due to spam prevention practices that
tend to recognize well only the largest entities.
In some other applications, such as social media, the services have a
more closed nature. The value of being a customer of one social
media service depends highly on how many other customers that
particular service has. Hence, the larger the service, the more
valuable it is. And the bigger the value difference to the
customers, the less practical choice they have in selecting a
service.
In some cases, these developments also allow asymmetric relationships
to form, with the customers having less ability to affect the service
than they would perhaps wish.
3.2. Interdependencies
Entities with a large role in a market place tend to have inertia, of
course through having many customers, but also due to their
interconnectedness with the rest of the ecosystem. These
interconnections can range from business relationships to peering
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connections, linking, and the use of various infrastructure services
from an entity as building blocks in applications.
These interconnections make it difficult for a market to move away
from a large entity. Indeed, even for an individual it can be a
challenge not to use the most commonly used Internet services
[Gizmodo].
Optimistic technologists ("digital libertarians") tend to believe
that states have limited ability to regulate the Internet: "The Net
interprets censorship as damage and routes around it" [Gilmore].
However, as argued by [Boyle] states may have multiple ways to
influence and monitor the Internet. One of the issues related to
consolidation is that it tends to be easier to exert control of few
large entities, than a large set of small, distributed players. This
concern is particularly acute around intellectual property rights or
surveillance capabilities, particularly when extra-territorial
requirements are placed on the large entities. These entities cannot
avoid comforming to regulation and laws in any of the locations they
have presence in.
As a result, there's an added angle of interconnectedness with
governments. At the same time, this of course also provides an
avenue for control of market forces, e.g., in the form of competition
law.
3.3. Data- and Capital-intensive Services
The scaling advantages are only getting larger with the advent of AI-
and machine learning-based technologies.
The more users a service has, the more data is available for training
machine learning models, and the better the service becomes, bringing
again more users. This feedback loop and the general capital-
intensive nature of the technology (data and processing at scale)
makes it likely that the largest companies are ahead in the use of
these technologies.
One could also take the pessimistic view that many of the ongoing
disputes in standards organizations relate to which market actors
will ultimately be able to collect the more data from private persons
and how. The question isn't as much about the protection of these
persons' privacy but rather whether some industry (or country) will
be able to benefit from access to data.
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3.4. Permissionless Innovation
The email vs. social media example also highlights the interesting
roles of interoperability and the "permissionless innovation"
principle - the idea that a network can be simple but still powerful
enough that essentially any application could be built on top of it
without needing any special support from anyone else. Permissionless
innovation has brought us all the innovative applications that we
enjoy today, on top of a highly interoperable underlying network,
along with advances in video coding and other techniques used by
applications.
Paradoxically, if the underlying network is sufficiently powerful,
the applications on top can evolve without similar pressures for
interoperability, leading to the closed but highly valuable services
discussed above. We call this the Permissionless Completeness
Problem.
3.5. Fundamentals of Communication
There are also fundamental issues, such as the speed of light. Low-
latency services can fundamentally only be provided through globally
distributed data centers. These are often provided and/or built by
large organizations, although collaborative data center or cloud
computing service approaches also exist.
A similar issue has arisen in recent years around large-scale denial-
of-service attacks, and how various entities can deal with them.
While the largest attacks affect all players (see, for instance, the
Dyn attacks in October 2016), it is also true that large cloud- and
content-delivery providers can better deal with such attacks due to
their scale. This is one reason that attracts many network services
to such providers.
3.6. Technology Factors
One of the key questions is whether we are seeing developments that
are driven by economic factors or whether fundamental reasons or lack
of available technology drives particular models. For instance,
centralised solutions might be desirable due to business incentives,
or they might be necessary because there is no distributed,
collaborative solution.
Some technical issues have historically not been easy to solve, such
as e-mail spam, which has led to reliance on non-technical solutions.
Today, it is becoming increasingly difficult to run your own mail
services, essentially forcing many organizations and individuals to
employ larger providers. The issues relate directly to size of
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entities; no one can afford to disconnect from the largest providers.
But as a small entity, there is little leverage to convince peer
entities or various supporting white/blacklist entities to deal with
you properly.
Many Internet services are based on gathering data about users, and
using that data for targeted advertisements. More data from more
users makes it possible to run a service more accurately or with
better results; here again scale brings advantages.
Another trend is that more and more content is becoming available
locally, from a content delivery or provider function directly on
one's own ISP network. We predict that eventually most content will
be delivered this way, reducing the role that global IP connectivity
across the Internet plays. By some metrics this has already
happened; what practical - positive or negative - impacts might this
have on the Internet technology?
There are also security tradeoffs. Large entities are generally
better equipped to move to more recent and more secure technology.
For instance, the Domain Name System (DNS) shows signs of ageing but
due to the legacy of deployed systems, has changed very slowly.
Newer technology developed in accordance with IETF standards enables
DNS queries to be performed confidentially, but its deployment is
happening mostly in browsers that use global DNS resolver services,
such as Cloudflare's 1.1.1.1 or Google's 8.8.8.8. This results in
faster evolution and better security for end users.
However, if one steps back and considers the overall security effects
of these developments, the resulting effects can be different. While
the security of the actual protocol exchanges improves with the
introduction of this new technology, at the same time this implies a
move from using a worldwide distributed set of DNS resolvers into,
again, more centralised global resolvers. While these resolvers are
very well maintained (and a great service), they are potentially
high-value targets for pervasive monitoring and Denial-of-Service
(DoS) attacks. In 2016, for example, DoS attacks were launched
against Dyn, one of the largest DNS providers, leading to some
outages.
4. Call to Action
Are there assumptions about the Internet architecture that no longer
hold in a world where larger, more centralised entities provide big
parts of the Internet service? If the world changes, the Internet
and its technology/architecture may have to match those changes.
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It appears that leveling the playing field for new entrants or small
players brings potential benefits. Are there technical solutions
that are missing today?
Of course, it may well be that technology improvements are hard to
come by. Nevertheless, recognizing the risks of consolidation in
both current and proposed future technologies is the first step in
proactively avoiding those risks where possible.
Assuming that one does not wish for regulation, technologies that
support distributed architectures, open source implementations of
currently centralised network functions, or helping increase users'
control can be beneficial. Federation, for example, would help
enable distributed services in situations where smaller entities
would like to collaborate.
Similarly, in an asymmetric power balance between users and services,
tools that enable the user to control what information is provided to
a particular service can be very helpful. Some such tools exist, for
instance, in the privacy and prevention-tracking modes of popular
browsers, but why are these modes not the default, and could we
develop them further?
It is also surprising that in the age of software-defined everything,
we can program almost anything else except the globally provided,
packaged services. Opening up interfaces would allow the building of
additional, innovative services, and better match users' needs.
Silver bullets are rare, of course. Internet service markets
sometimes fragment rather than cooperate through federation. And the
asymmetric power balances are easiest changed with data that is user-
controlled, but it is much harder to change when someone else holds
it. Nevertheless, the exploration of solutions to ensure the
Internet is kept open for new innovations and in the control of users
is very important.
o What IETF topics that should be pursued to address some of the
issues around consolidation? Some of the topics for consideration
are discussed in Section 4.1 and Section 4.2.
o Are there open source efforts that should be pursued or continue
to be pursued to ensure that a diversity of operators and networks
can use a particular technology? This is further discussed in
{{opensource]].
o What measurements relating to the development of centralization or
consolidation should be pursued? And what other research, such as
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distributed Internet architectures, should be driven forward?
Some potential topics are discussed in Section 4.4.
4.1. Open Interfaces
Standards and open source efforts continue to build many open
interfaces and APIs that allow systems interoperability and tailoring
of services. In some cases, however, the availability of open
interfaces definitions and software has not led to the realization of
actual interfaces in this open manner. For instance, different
instant messaging systems have had a technical ability to be
interoperable with other systems, just like e-mail is interoperable
across systems, but have chosen to be disconnected.
Work in determining what open interfaces can provide benefits to
users as well be successfully deployed in the Internet ecosystem
would of course be useful.
4.2. Specific Standardization Choices
Sometimes the issue is not the availability of interfaces as such,
but rather fundamental architectural choices with regards to how
Internet systems should be built.
Often this relates to how centralized or distributed deployments are
targeted. And even if a distributed, broad deployment model is
targeted, expectations may not match reality when economies of scale,
DDoS resilience, market consolidation, or other factors have come
into play. These factors can result in the deployed reality being
highly concentrated.
This is a serious issue for the Internet, as concentrated,
centralized deployment models present risks to user choice, privacy,
and future protocol evolution. On occasion, the differences to
expectations can be immediate, but can also occur much later.
Some examples of these issues include current work in DNS where we
may see concentration through the use of globally available common
resolver services, which evolve rapidly and can offer better
security. But the concentration of these queries into a few services
creates new security and privacy concerns.
Another example is email, which started out as many providers running
in a largely uncoordinated fashion, but which has since then seen
significant market consolidation and a need for coordination to
defend against attacks such as spam. The coordination and
centralized defense mechanisms scale better for large entities, which
has fueled additional consolidation.
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Awareness of these issues while working on standards would be useful,
so that the issues can be taken into account and appropriately
mitigated. To begin with, those of us interested in the broader
questions about Internet research and development are needed to
identify some of the effects that new technology developments may
pose.
4.3. Open Source
Many key Internet infrastructure services (e.g., DNS servers), end-
user applications (e.g., browsers) and technology components (e.g.,
operating systems or protocol implementations) are commonly
implemented using open source solutions.
This is often true even if there is a large entity that is in charge
of a large fraction of development and deployment for a particular
technology. This is a good thing, as it provides a means for others
to have a fair chance of changing the technology in question, should
the large entity drive their use of the technology in some direction
that does not benefit the users. For instance, users and other
organizations have traditionally been able to either run their own
browser versions or provided extensions that suit their needs better
than the default system.
As a result, continuing to have this ecosystem is an important safety
valve and competition opportunity.
4.4. Research Challenges
There are a number of different research directions for which further
work would be useful.
The first is about measurements; is the Internet indeed
consolidating, and if so, by how much, and in what aspects? Also,
where are the Internet's traffic flows concentrating, and how is this
changing over time?
There are also questions about the trends and their relationships to
technology: Has Internet technology influenced the consolidation
trends in some manner? And conversely, how does Internet
consolidation influence the development of Internet infrastructure
and architecture?
Finally, research on topics that would likely yield results that
increase the diversity and de-centralization in the Internet would
obviously be welcome. This can include any de-centralized
technologies, but in particular distributed Internet architecture is
an interesting topic.
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5. Contributors
Much of the text in this memo is from a blog article written by Jari
Arkko, Mark Nottingham, Christian Huitema, Martin Thomson, and Brian
Trammell for the Internet Architecture Board (IAB), and from a blog
article written by Jari Arkko and Brian Trammell APNIC and RIPE.
Some parts of the text have also come from a future workshop
description developed in the IAB, primarily by Christian Huitema and
Ted Hardie.
6. Acknowledgements
The authors would like to thank IAB members, Geoff Huston, Amelia
Andersdotter, Gonzalo Camarillo, Mirjam Kuehne, Robert Mitchell, Olaf
Kolkman, Greg Skinner and many others for interesting discussions in
this problem space. The authors would also like to thank all
participants in the 2019 Design Expectations vs. Deployment Reality
(DEDR) IAB workshop held in Kirkkonummi, Finland, as well as the
participants in the 2019 EuroDIG workshop on "Internet consolidation
- opportunities and challenges".
7. Informative References
[Abbate] Abbate, J., "Inventing the Internet", MIT Press , 2000,
<https://mitpress.mit.edu/books/inventing-internet>.
[Boyle] "Foucault in Cyberspace: Surveillance, Sovereignty, and
Hardwired Censors", Duke Law School,
https://scholarship.law.duke.edu/
faculty_scholarship/619/ , 1997.
[Clark] Clark, D., "The Design Philosophy of the DARPA Internet
Protocols", In Symposium Proceedings on Communications
Architectures and Protocols, 106-114. SIGCOMM '88. New
York, NY, USA, ACM https://doi.org/10.1145/52324.52336 ,
1988.
[Cowheyetal]
Cowhey, P., Aronson, J., and J. Richards, "Shaping the
Architecture of the US Information and Communication
Technology Architecture: A Political Economic Analysis",
Review of Policy Research 26 (1-2), pp. 105-125. , 2009.
[DolataSchrape]
Dolata, U. and J. Schrape, "Collectivity and Power on the
Internet: A Sociological Perspective", Springer
International Publishing. Page 85. , 2018,
<www.springer.com/de/book/9783319784137>.
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[Frischmann]
Frischmann, B., "Privatization and Commercialization of
the Internet Infrastructure", Colum. Sci. & Tech. L. Rev.
2, pp. 1-25. , 2001.
[Gilmore] "First Nation in Cyberspace", TIME International (see
http://kirste.userpage.fu-berlin.de/outerspace/
internet-article.html) , December 1993.
[Gizmodo] "I Cut The 'Big Five' Tech Giants From My Life. It Was
Hell", Gizmodo, https://www.gizmodo.com.au/2019/02/i-cut-
the-big-five-tech-giants-from-my-life-it-was-hell/ ,
February 2019.
[ISOC] "Consolidation in the Internet economy", Internet Society,
https://future.internetsociety.org/2019/ , 2019.
[Khan] Khan, L., "Amazon's Antritrust Paradox", The Yale Law
Journal 126:710 , 2017.
[LitanRivlin]
Litan, R. and A. Rivlin, "Projecting the Economic Impact
of the Internet", American Economic Review 91 (2), pp.
313-317 , 2001.
[Mansell] Mansell, R. and M. Javary, "Emerging Internet Oligopolies:
A Political Economy Analysis", In Miller, Edythe S.and
Samuels, Warren J., (eds.) An Institutionalist Approach to
Public Utilities Regulation. Michigan State University
Press, East Lansing, Michigan, pp. 162-201. ISBN
9780870136245 , 2002, <https://core.ac.uk/download/
pdf/204420.pdf>.
[Nye] Nye, J., "The Regime Complex for Managing Global Cyber
Activities. Global Commission on Internet Governance",
CIGI, Global Commission on Internet Governance , 2014.
[RFC1192] Kahin, B., "Commercialization of the Internet summary
report", RFC 1192, DOI 10.17487/RFC1192, November 1990,
<https://www.rfc-editor.org/info/rfc1192>.
[RFC1958] Carpenter, B., Ed., "Architectural Principles of the
Internet", RFC 1958, DOI 10.17487/RFC1958, June 1996,
<https://www.rfc-editor.org/info/rfc1958>.
[RFC3935] Alvestrand, H., "A Mission Statement for the IETF",
BCP 95, RFC 3935, DOI 10.17487/RFC3935, October 2004,
<https://www.rfc-editor.org/info/rfc3935>.
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[Smyrnaios]
Smyrnaios, N., "Internet Oligopoly: The Corporate Takeover
of Our Digital World", Emerald Publishing Ltd. , 2018.
[Stiglitz]
Stiglitz, J., "Joseph Stiglitz: Are markets efficient, or
do they tend towards monopoly? The verdict is in", 2016,
<https://www.weforum.org/agenda/2016/05/joseph-stiglitz-
are-markets-efficient-or-do-they-tend-towards-monopoly-
the-verdict-is-in/>.
[VanSchewick]
van Schewick, B., "Internet Architecture and Innovation",
MIT Press , 2012.
[Wu] Wu, T., "The Curse of Bigness", Columbia Global Reports,
New York, New York , 2018.
Authors' Addresses
Jari Arkko
Ericsson
Email: jari.arkko@piuha.net
Brian Trammell
ETH Zurich
Email: ietf@trammell.ch
Mark Nottingham
Fastly
Email: mnot@mnot.net
Christian Huitema
Private Octopus Inc.
Email: huitema@huitema.net
Martin Thomson
Mozilla
Email: martin.thomson@gmail.com
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Jeff Tantsura
Apstra, Inc.
Email: jefftant.ietf@gmail.com
Niels ten Oever
University of Amsterdam
Email: mail@nielstenoever.net
Arkko, et al. Expires January 10, 2020 [Page 16]