a question about the economics of peering

Sat Dec 1 09:01:35 UTC 2001

On Fri Nov 30, 2001 at 10:39:57PM -0500, Alex Rubenstein wrote:
> My question was simply a curiosity ping of _why_ people peer with each
> other; in my mind, it had always, and never not, been a way to reduce cost
> of traffic sent/rec'd. I was curious as to whether or not others had a
> similar view to mine.

For us, I'd say there's a two-fold win.

1) Cost. We try to aim for less than $100/mbps on peering connections.
This isn't always the case when first connecting to a NAP, because
PtP circuits and NAP ports aren't charged per mbps, so the cost per
mbps is much higher for the first 10 or 20 meg, and comes down after
that. It also serves to expand our potential network capacity. This can
work right to extremes - in the UK (our primary geographical 
target region), we can reach probably 99% of users without using
our transit with Level3 and others in the USA.

2) More direct relationships with end-user ISPs. Okay, there's no
formal SLAs or anything like that, but there *is* a relationship
between us and a peer. When a user complains about connectivity
issues, it's more likely that there's just two parties involved -
us and the user's ISP. We're not transitting through 2 or 3 other
ISPs in the middle - all of which could be the cause of problems.

Simon
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