The large ISPs and Peering

Wed Jul 25 16:38:22 UTC 2001

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: owner-nanog at merit.edu [mailto:owner-nanog at merit.edu]On Behalf Of
> Jeb R. Linton
> Sent: Wednesday, July 25, 2001 11:02 AM
> To: 'Peering Resistance'; nanog at merit.edu
> 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: owner-nanog at merit.edu [mailto:owner-nanog at merit.edu]On Behalf Of
> > Peering Resistance
> > Sent: Tuesday, July 24, 2001 10:50 PM
> > To: nanog at merit.edu
> > 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
> >
> > __________________________________________________
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