Tuesday, 7 April 2020

New Uptime Record; New Traffic Record; and Raxio Expansion Plans

Another quarter; another update -- and there is lots of good news to share: We have achieved a new uptime record, observed new peak traffic levels, and are expanding into Raxio's new carrier neutral data centre. Read on for details:

Coronavirus (COVID-19)
We would like to assure everyone that we are fully prepared to maintain operations during the lockdown period regardless of its duration. We have always had the ability to conduct most of our work remotely and the government has authorized a travel pass for us in order to accommodate any emergencies that require us to physically interact with our equipment.

Expansion Plans

We are excited to announce that we have signed a deal to extend our peering network into Raxio’s carrier neutral data centre in Namanve. This will allow us to attract new peers, provide redundancy for the networks that rely on us, and make large-scale content and cloud deployments viable in Uganda.

To accomplish this, we will deploy a fully independent IXP at Raxio and interconnect it with our existing IXP at Communications House. This will allow us to offer a unified peering LAN that spans the two locations. Network operators will be free to peer at either, or both, as needed.

We believe this deal represents a significant milestone in the development of Uganda’s Internet ecosystem. Internet exchange points have a symbiotic relationship with carrier neutral data centers and we expect that this deal will catalyze a virtuous cycle of growth that will make the Internet significantly cheaper, faster, and more reliable for all.

Please visit Raxio's website for a copy of the press release.

New Stability Record: 99.994%
We’re extremely happy to report that we have achieved 99.99% uptime since taking direct control of our power and air conditioning.
This success would not have been possible to achieve without everyone’s support for our sustainability model -- so thanks to all once again!
Here are some graphs to demonstrate the UIXP’s reliability before and after:

BEFORE: 2018-06-01 to 2019-06-01
97.891% uptime (7d 17h 17m 46s of downtime)

AFTER: 2019-06-01 to 2020-04-02
99.994% uptime (26m 7s of downtime)

Note that the “BEFORE” data represents an extremely conservative downtime estimate as it does not account for partial outages including a multi-week CDN outage caused by an air conditioning system failure.

New Peak Traffic Record: 11Gbps
We recently observed the highest peak traffic levels ever recorded in the UIXP’s existence:

However, the graph also indicates a significant reduction in peak traffic levels following the outbreak of Coronavirus (COVID-19) due to the Week 13 lockdown restricting people’s access to office Internet connections. We believe this is for the following reason:

  • Many enterprises were not able to set up work-from-home policies quickly.

  • Video conferencing traffic is often routed internationally due to the location of the relay servers.
  • Many people rely on mobile Internet connections at home. A lot of home Internet traffic does not utilize the IXP as it primarily occurs on large carrier networks that have on-net CDN nodes.

  • Disposable income has evaporated, and many home connections are essentially mobile network services with pay-per-byte pricing models (i.e. data bundles) that do not generate as much traffic.

Tax Challenges
While we are generally in good standing with the Uganda Revenue Authority (URA), we have encountered an apparently insurmountable problem regarding the timing of our VAT payments that we thought was worth sharing.

URA expects companies to pay VAT when invoices are issued regardless of when payments are received. In other words, if we issue $100,000 worth of invoices in January, URA expects us to pay $18,000 before we receive any payments.
We cannot accommodate this for at least two reasons:
  1. We cannot pay URA with money we don’t have. We are in a similar situation to most new businesses in that we don’t have enough free cash available to make advance payments.
  2. We can’t force networks to pay because the UCC has prohibited us from doing so. This means that we cannot guarantee that we will be able to recover any advance tax payments even if we had enough free cash to make them.
In light of the above, we are unable to meet URA’s expectations and have opted to pay VAT based on when we receive payments instead. This unfortunately means that we must occasionally pay fines and perform additional administrative work when network operators claim VAT against invoices based on the date of the invoice.

We have attempted to lobby URA about this issue without success. If anyone has any suggestions for how to resolve this problem, please let us know. In the mean-time, we encourage network operators to file any VAT claims against our invoices using the date the payments are made instead of the invoice date.
We are happy to report that all but three non-pro-bono networks have agreed to participate in our sustainability model. We are actively working to find ways to encourage these networks to come on-board, but they are generally either unresponsive or actively refuse to pay. Our options are somewhat limited: The UCC has ordered us to provide free service to these networks beyond what is available in our free service tier even though we have made it clear that they are a small minority and that our paying members are unhappy subsidizing their service.

Cash Reserves
We have successfully established cash reserves of $75,000 and have filed a board resolution that formalizes this. Any draw-down now requires majority approval from the board and a plan to replenish the reserves. It also requires the board to implement an emergency budget if the reserves fall below 75% of the target level for one year.

Regulatory Environment
We do not have any news to report regarding the UCC's proposed IXP licensing framework and related telecommunications regulations. There has been little movement on this issue, likely due to senior staffing changes within relevant government agencies and the COVID-19 situation. However, we continue to seek an amicable way to resolve the issue and will provide updates if the situation evolves.

Governance Reform

We still have not received any feedback on the draft constitution proposed to the community in 2015 and again, in updated form, in 2018.

If you are interested in governance reform, please review the draft and submit feedback (or forward it to your legal teams for the same) so that we can move the process forward.
A copy of the draft proposal and a summary document can be found here: https://uixp.co.ug/documentation/governance-reform-updated-draft-memarts-2018-12

Note that we have hired an additional technology oriented legal resource and plan to work with them on future revisions of the draft constitution.

That’s all for now. If anyone has any questions, please don’t hesitate to contact us.