Generation of traffic in "settled" peering arrangement

Tue Aug 25 03:13:43 UTC 1998

(This message assumes Exodus will lose their peering arangement with BBN
and I'll either not have routes to Exodus through BBN or they will be
worse than they were before)

My problem is we purchase transit from BBN. Why should I renew my
contract with BBN when I can get better connectivity from someone else? If
I stay with BBN how do explain why I did when their connectivity has been
degraded? They'll start leaving me for providers with better connectivity.

On Mon, 24 Aug 1998, John Curran wrote:

> At 08:47 PM 08/21/1998 -0700, Mike Leber wrote:
> >...
> >And any suitably informed party to a peering arrangement like this can
> >simply offer free hosting to search engine crawlers until they are
> >extracting the desired amount cash from their peer via settlements.
> 
> Folks,
> 
> Think very carefully about what happens as traffic increases...
> 
> Given that the context is the introduction of "settlement-based" peering 
> for traffic imbalance in a shortest-exit world, then all of the various
> schemes for generation of traffic (web crawlers, backup services, etc)
> are no problem whatsoever, and may actually been seen as desirable...
> 
> Background:
> 
>   Imagine a nationwide Internet provider with customer A on the west
>   coast and customer B on the east coast.  Customer B sends queries
>   to customer A's server, and receives quite a bit of data in return.
>   (all of this traffic stays on the provider's backbone in this case)
>   Presume for the moment that the provider charges the customers (A&B)
>   on a usage-basis which takes both sending and received traffic levels
>   into consideration.  Now, one could charge each of A and B the full 
>   cost of the traffic exchanged (which would effectively be "double
>   dipping" and quite profitable :-) but a competitive market makes it 
>   far more likely that the rate per traffic measure will be such that 
>   A & B together pay the costs associated with their traffic exchange
> 
>   Now, given that A & B are both on the provider's network, everything
>   is fine.  When we hypothesize that A is instead connected to a peer
>   network, we don't know whether costs will be recovered.  In a shortest-
>   exit world, traffic is quickly exchanged to the original provider's 
>   network and hence the costs of transmission to B are almost identical
>   to the case where the A was a customer.   Given that there's only one
>   customer (B) now paying for these costs, this presents a potential
>   problem.   Customer B expects to pay their fair share of the costs,
>   but doesn't expect to pay a larger portion of the total costs simply
>   because A is connected to another provider.
> 
>   The truth is, there is actually nothing wrong with this situation if 
>   the traffic to/from the peer is of the same order of magnitude.  To
>   elaborate: a peer provides traffic which must be carried without
>   corresponding sender-side revenue.  On the other hand, the peer also
>   allows the Internet provider to provide a similar level of sender-paid 
>   traffic which (by nature of being handed off) has very little actual
>   transmission costs.  This is why typical peers are overall neutral
>   to cost recovery, and why peers which send far more traffic than 
>   received are problematic.
> 
>   There are a few options that have been mentioned to this situation,
>   including the "receiver pays full freight / sending is free" model,
>   the use of something other than shortest-exit routing, and introduction
>   of settlements for such traffic.  For purposes of this thread, we're
>   trying to determine if the settlement approach is doomed to failure 
>   due to ability to generate additional traffic flows through innovation.
> 
> Assessment:
> 
>   Presuming that a peer which is a net exporter of traffic begins to 
>   address this by encouraging additional traffic from customers to its
>   network, this would result in more sender-paid originating traffic
>   which quickly moves to the peer.  Such traffic is (as noted above)
>   quite profitable, as it includes full cost recover but little actual
>   costs due to shortest to the peer.  This is actually good for
>   both networks, and us back to an Internet where more traffic is 
>   considered a good thing by ISP's at both ends of the connection.
> 
> /John
> 
> p.s.  The fact that the sender of traffic should be paying some portion
>       of the resulting costs is not a surprise to anyone; many of the
>       content companies that I've spoken to believe they already are
>       paying more as traffic increases, and were quite surprised to 
>       find that it doesn't actually make it to the networks which 
>       bear the brunt of the traffic carriage.
> 
> p.p.s.  As noted, departure from shortest-exit is also another approach
>         which may provide some answers to this situation, but that's a
>         different topic which deserves its own thread.  This message 
>         is simply noting that settling for peering traffic is quite 
>         viable, despite assertions to the contrary regarding traffic
>         generation.   As long as you're billing the senders on your
>         network for increased usage (and handing it off shortest-exit),
>         increased traffic is good thing.   
> 

-- 
Tracy Snell	             (312) 588-2900
President, EnterAct, L.L.C.  http://www.enteract.com
tjs at enteract.com