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Re: UUNET Press Release on Peering

  • From: Hong Chen
  • Date: Mon May 12 22:44:02 1997

On Mon, 12 May 1997, Pete Kruckenberg wrote:

> 
> There may be some other interesting things to consider, especially in
> the case of UUNet. One thing I don't really understand is how these
> "free-loading" peers are detrimental. If UUNet customers pay on a tiered
> pricing scale, that means that when they go to a UUNet peer, they are
> paying for the bandwidth being used. What UUNet is saying is that *two*
> people should be paying for that bandwidth.
> 

It is indeed an interesting question. If you look at from a 
different angle, 
and from UUnet point of view, you will see the why. The cost of 
providing a full bandwith T1 to UUNET's customer is actually a 
function of 'How Long the Packet Travels * bps', where bps is the 
speed 1.54Mbps in the case of T1. 

If UUNet is carring the backbone burden, the first parameter is 
larger and bps is still 1.54Mbps. Thus, the cost of UUnet providing
T1 will be much bigger than the cost of a Small ISP providing
T1 for its customers. 

Now the smaller ISP can price its T1 at lower cost, and compete 
with UUNet which cannot lower the price below its cost. By having
the smaller ISP to pay for the peering just RAISE the cost of 
providing T1 by the smaller ISP and REDUCE the cost of 
providing T1 for UUnet. 



> And how is it any different if UUNet loses the second person's revenue
> because the traffic ended up on a "small" peer or a "large" peer. In any
> case, it is revenue that's lost, period. Wouldn't the benefits of being
> able to manage your network (because you can tell peers where to peer with
> you, and anticipate that they'll be peered there a long time) outweigh to
> a large degree the shortcomings of a small peer (who, for example, could
> buy service from another NSP, who might regularly move traffic around
> enough that a national backbone would be significantly affected)? 
> 
> I just don't see that many of the small peers will end up buying UUNet
> service (especially at their special "wholesale" prices), but will
> ultimately end up buying from another NSP, and UUNet will end up not only
> not getting new revenue, but will have compounded problems from the same
> traffic they had to support before. 
> 
> I would also assume that there are some economies of scale by peering at a
> central point, rather than putting high-speed customers on POPs away from
> the exchange point. If one of these small peers decided to buy UUNet
> service, wouldn't it be significantly more expensive to haul DS-3/OC-3
> bandwidth close to the customer, whereas they used to haul it to the
> exchange point themselves?
> 
> Just my $0.02 (well, an email this long is probably worth $2.02).
> 
> Pete Kruckenberg
> [email protected]
> 
> 
> 

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