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RE: a question about the economics of peering

  • From: Lane Patterson
  • Date: Fri Nov 30 17:26:18 2001

As Bill Woodcock asserts, there is no question that peering at exchanges is
driven  by economics more than other advantages such as path minimization 
or performance maximization, whether you are peering amongst Tier1's or are
a Tier2/other minimizing your transit $$$ by maximizing your peering 
traffic %.

But the drop in transit pricing, and things like burstible billing, have 
definitely changed the "margin" in this calculation.  So now we see folks 
going to exchanges/neutral colocation for much more than just peering 
arguments, but a combo of:

	-public peering
	-private peering
	-access to lots of low-cost transit providers
	-access to lots of low-cost circuit providers--including
		ethernet "local loops"
	-ease of switching bandwidth suppliers
	-just need a good facility to put a POP
	-sell services

As for IXen in Europe versus US, the history (having suffered thru this at
MAE-East) is that FDDI-based US exchanges reached congestion first, and the
largest traffic pushers were forced to go the private peering route.  So 
legacy exchanges then entered a rather spotty period of faltering critical
mass, competing exchanges, diverging technology choices (ATM versus Ether)
and a mixed private/public interconnection model.  Today, congestion is not 
a problem at US IXen, but having critical public peering mass in all the 
major geographic peering areas is.

Whereas European public exchanges never experienced congestion, since by
traffic growth hit, there were egress-buffered GigE switches available.
they continued merrily along toward critical mass, and traffic at exchanges 
like LINX (surpassed 13 Gbps this week!), AMS-IX, and even Japanese
have surpassed legacy US exchanges.  However, new entrants to RIPE and APNIC
IX business may certainly pull at the peering concensus in these areas.


> -----Original Message-----
> From: Giles Heron [mailto:[email protected]]
> Sent: Friday, November 30, 2001 9:38 AM
> To: David R. Dick
> Cc: [email protected]
> Subject: Re: a question about the economics of peering
> "David R. Dick" wrote:
> > 
> > >
> > > Today, I was approached by 
> *unnamed-ethernet-extension-company*. They
> > > extend ethernets between several US and UK peering exchanges.
> > >
> > > While speaking with them today, thier engineer and I got 
> into a little bit
> > > of a disagreement as to why people peer with each other 
> at public exchange
> > > points. My belief is that generally speaking, networks 
> meet at public
> > > exchange points (such as MAE-*, LINX, AMSIX, AADS, etc) 
> is to exchange
> > > traffic with each other more economically (read: save money).
> > >
> > > His belief is that people will pay a premium to get to an 
> exchange point,
> > > because it's worth paying a premium to have 'less hops' 
> between two
> > > networks.
> > 
> > The problem with this idea is that public exchange points need
> > to be *avoided* when they get too congested.  People may start
> > out trying to minimize number of hops, but I think they eventually
> > try to minimize total latency.
> but what if the *unnamed-ethernet-extension-company* wasn't providing
> access to public exchange points, but was rather enabling uncongested
> private peering over its network?  That way latency and hop count are
> both mimimised.
> BTW, public IXen in Europe don't tend to be congested.  
> Whether this is
> the result of better management, or of lower traffic volumes, 
> than IXen
> in the US I'm not sure...
> Giles
> > >
> > > Essentially, he said that paying more for peering that 
> for transit is
> > > typical, and to be expected, and most people accept this.
> > >
> > > Whats the common opinion on this?
> > >
> > >
> > >
> -- 
> =================================================================
> Giles Heron    Principal Network Architect    PacketExchange Ltd.
> ph: +44 7880 506185              "if you build it they will yawn"
> =================================================================