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North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical RE: The large ISPs and Peering
You're certainly right about the optical gear, but it misses the point that the Tier-1s will come nowhere near filling these facilities. Non-Tier-1 players are by no means being excluded from getting into these facilities - exactly the opposite. The facility vendors are pushing to get them in. The only thing were weren't included in is the choice of facilities; if the Tier-1s want to form a consortium (they call it that, rather than a "cartel"), it's certainly within their rights to do so. I don't see this as a bad thing. What you say about price equalization followed by increases may be true, but it seems unlikely to me for a few reasons. 1. There's a fiber glut. 2. Several of the Tier-1s in the consortium are relatively new players who are still paying for their share of the fiber glut, in a market downturn. 3. Because of 1 & 2, transit prices have already plummetted this year. The best price we can get now is less than 50% what it was eight months ago. 4. Tier-2s and Content Providers have already started peering aggressively to avoid paying the Tier-1s for transit. This is likely to happen even more aggressively if we have a smaller and better known set of places to meet and peer. This is even more compelling to the larger, older, more expensive Tier-1s. If I'm in a building where three providers can give me transit at $100/Mb and four have it at $200-300/Mb, the choice is easy. Equalization may happen here, but it will be a good thing, not a bad thing, for the reasons above. In the end, Tier-1s need more transit business, and Tier-2s/Content Providers need less transit (i.e. the growth rate is decreasing). More supply, less demand. Prices will decrease. - Jeb > -----Original Message----- > From: Daniel Golding [mailto:[email protected]] > Sent: Wednesday, July 25, 2001 12:38 PM > To: [email protected]; 'Peering Resistance'; > [email protected] > Subject: RE: The large ISPs and Peering > > > Let's break this one down. > > The large ISPs have finally started to work together, to > potentially exclude > smaller providers. That isn't good. > > Certain colo facilities are being choosen. Others are not. > This has a major > business impact on the ones who aren't choosen. > > Why is any of this bad? Because when X providers who control > a large part of > the market start to work together, you get a Cartel. This > type of joint > decision-making is always bad for the smaller player in the > field, as the > self-interest of the larger players is to preserve their own > market share. > > Cartels are bad for business, as they make the industry less > competitive. > Thats bad for everyone. > > As for your remarks about these providers and their "huge" > routers, and the > bigness of these colos... What does that have to do with this > issue? The > vast majority of space would be taken up with DWDM or SONET > gear in any > case. > > A "one-stop shop" looks good to the consumer, at least at first. What > happens when the prices start to synchronize? This type of > approach takes a > great deal of flexibility out of the IP transit sales > process. The big will > get bigger, and the consumer will eventually suffer. > > Earthlink is a huge consumer of transit bandwidth, so it > would seem to be in > your shareholder's best interest to keep competition high, > and thus keep > prices low. > > - Daniel Golding > > > -----Original Message----- > > From: [email protected] > [mailto:[email protected]]On Behalf Of > > Jeb R. Linton > > Sent: Wednesday, July 25, 2001 11:02 AM > > To: 'Peering Resistance'; [email protected] > > Subject: RE: The large ISPs and Peering > > > > > > > > There's nothing sinister or secret about this. > > > > I can't say who the winners are because the winners aren't > > official yet, and > > I also have heard only rumors. The big players are simply > doing a smart > > thing - deciding together on points where they can all > agree to meet and > > peer at 2.4Gb and 10Gb cheaply. It's obviously the right > thing to do. > > > > What it means for smaller ISPs, content providers, etc., is that > > there will > > now be a particular Equinix, Level(3), etc. facility, where we > > know all the > > big players will be. Those facility providers won't keep us > out - they'll > > market the fact that the top Tier-1's are there in order to > get everyone > > else there too. > > > > These facilities are huge. Each Tier-1 needs space for a few > > Juniper M160s, > > Cisco 12400s, etc. The space left is more than enough for > Tier-2s and > > content providers galore. There's nothing preventing the > big guys from > > competing to provide transit to others in those facilities > without huge > > local loop costs. It's basically a one-stop shop for > transit circuits from > > anybody you want - they know this, so the competition will > be pretty good. > > > > "What happens to my favorite Co-lo?"... Well, if you're not in > > the facility > > that gets chosen, it's still likely there will be cheap > connections from > > yours to theirs. These thing will sit on multiple metro > fiber rings, so > > again there will be decent competition. Any old facility > that doesn't hook > > up to the chosen ones knows they will be left out in the > dark. So choose > > wisely. > > > > - Jeb Linton > > > > (My opinions only, not the opinions of EarthLink or anyone else > > as far as I > > know.) > > > > > > > > > -----Original Message----- > > > From: [email protected] > [mailto:[email protected]]On Behalf Of > > > Peering Resistance > > > Sent: Tuesday, July 24, 2001 10:50 PM > > > To: [email protected] > > > Subject: The large ISPs and Peering > > > > > > > > > > > > This is an interesting tale, and one that everyone > > > involved with the ISP world should know about. > > > > > > Aproximately 8 months ago, several of the very largest > > > ISPs, ones with names like WorldCom, Sprint, CW, > > > Genuity, and others, came together to discuss the > > > concept of peering. The all peered with each other, > > > most with very large peering circuits - OC-12 or > > > above. The problem was that the provisioning time and > > > effort required for these circuits was getting quite > > > out of control. Costs of interconnects were also high. > > > > > > > > > So, these large providers did the "unthinkable". They > > > decided to issue an RFP to 8 sites around the US, > > > which they would jointly inhabit for purposes of > > > peering. In order to avoid the appearence of > > > collusion, they all issued similar RFPs, each > > > originating from their own company, but otherwise > > > almost identical. And the sites were choosen using > > > essentially identical criteria. So, unsurprisingly, > > > the same 8 sites were choosen, in such cities as > > > Dallas, Chicago, San Francisco, New York, DC, and > > > others. > > > > > > There are several rumors floating about as to which > > > sites were choosen. This is unconfirmed and > > > conjecture, so I won't go into it for this email. > > > > > > The key questions... > > > > > > 1) What are the selected sites? > > > 2) How do the rest of us play? > > > 3) Why wasn't this process more open? > > > > > > I know that this is a true situation, as I have > > > confirmation from three different sources, and have > > > seen copies of several of the RFCs. I eagerly await > > > the comments of those providers involved with this > > > effort, and hope that this will lead to a more open > > > internet. > > > > > > - PR > > > > > > __________________________________________________ > > > Do You Yahoo!? > > > Make international calls for as low as $.04/minute with > > > Yahoo! Messenger > > > http://phonecard.yahoo.com/ > > > > > > >
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