interconnection costs

Wed Dec 23 22:12:42 UTC 2015

On 23 December 2015 at 20:05, Reza Motamedi <motamedi at cs.uoregon.edu> wrote:

> In Private peering however the AS pays the colo provider for the xconnect
> per ASes that it wants to peer with. The cost of transit would be
> additional if the peering is in fact a transit and not settlement free.
>

You are still assuming there is a colo. But perhaps the most common case is
a multihomed company buying transit from two independent service providers.
The customer is at his office and the two service providers will have their
end somewhere in the city, perhaps even terminating their end of the
circuit in a street cabinet. The customer is multihomed and therefore has
his own AS. This is a peering situation with three AS numbers that fits
your description, it is private peering and there is no xconnect. Instead
there is usually a leased line cost, but this cost is often hidden from the
customer. Also the ISP might own the line (physical fiber) and the cost is
not a simple $/month.

But also two ISPs might peer in this way. Residual internet providers have
a ton of points of presences, so why choose a place where there is a
xconnect fee? We can peer anywhere in the city, including at a random
street cabinet. Often the cost of renting a dark fiber somewhere is lower
than a xconnect fee (a sign that datacenter owners are too greedy).

If one party is a content provider I give you that the peering point is
usually at a datacenter somewhere. But still, if the content provider is
big enough to run their own datacenter, we are back at the leased line case
again. Some content providers, even if small, prefer to just run their own
datacenter in the basement of their offices.

Regards,

Baldur