Market study on the Norwegian Internet ecosystem © Photo Credit: mozZz -

Market study on the Norwegian Internet ecosystem

Norway is among the world’s top countries in terms of available internet access speed due to the extensive fibre and mobile coverage complemented with fixed wireless access. Specific for Norway is a much higher symmetry of upload/download traffic compared to the rest of Europe due to the availability of symmetric fibre access to end customers.

WIK-Consult has reviewed the Norwegian internet ecosystem and in particular IP Interconnection for the Norwegian Communications Authority (Nkom). For this purpose, a survey among 100 relevant stakeholders and additional in-depth interviews have been done complemented with desk research.

Most interconnection and hence traffic exchange between Norwegian market players is geographically centralised in Oslo, at private interconnection points via settlement-free peering. Paid traffic exchange via transit agreements is done mostly at the public Internet Exchange Point (IXP) in Oslo. In a European comparison, peering has also increased in Norway at the expense of transit, but transit agreements are still important, especially for smaller providers, but also for larger providers as a backup. Despite the importance of regional peering for the distribution of data traffic, this is still limited due to the limited presence of potential peering partners in small IXPs.

While IXPs exchange the traffic, data centers are the ‘hotels’ where the data and applications reside. This sector was strongly supported by government strategy in 2018 simplifying regulations, but also increasing the quality and capacity of international connections resulting in a very good network latency (15 milli-seconds). Together with the availability of natural cooling and low-cost green energy, this attracts cloud providers and data centers.

The Interconnection market seems to function well in Norway as there have been no disputes or abusive behaviour in the last five years, which is an important signal for regulators. The spirit in Norway seems to be very much of partnership between the stakeholders. Content Distribution Networks (CDNs) are mostly co-located in Norwegian Internet Service Providers (ISPs) networks. Content and Application Providers (CAPs) have not been forced into paid peering or partial transit agreements with Internet Service Providers (ISPs), as occasionally seen in other European countries. Furthermore, there is a moderate view on the ‘fair share‘ debate regarding possible payments of CAPs to ISPs with a focus on increased investments in mobile networks due to Fixed Wireless Access (FWA).

Based on our review, we have made several policy recommendations, such as possible improvements in resilience and redundancy, more regional traffic routing and the use of data centers located in Norway for societally critical services.