Peering, Large ISPs, and You

Wed Jul 25 18:21:16 UTC 2001

See my comments below...

> -----Original Message-----
> From: David Barak [mailto:thegameiam at yahoo.com]
> Sent: Wednesday, July 25, 2001 1:14 PM
> To: nanog at merit.edu
> Cc: dan at netrail.net; jeblinton at corp.earthlink.net;
> peeringresistance at yahoo.com
> Subject: Peering, Large ISPs, and You
>
>
> I'll interleave my comments.
>
> Quoth Daniel Golding:
>
> >The large ISPs have finally started to work together,
> >to potentially exclude
> >smaller providers. That isn't good.
>
> are you arguing that the situation of the past several
> years does NOT exclude smaller providers?  Most of the
> really big ISPs (you know who you are) rely primarily
> on private peering already.  How exactly does this
> change matters?
>

Smaller providers have certainly felt the squeeze. This changes matters
because previously the big players were working seperately, with distinct
sets of rules. From my reading of these comments, it looks like they are
starting to work together, and plan jointly. If this is true (and at least
one non-anonymous poster has seemed to confirm it), than thats bad.

> >Certain colo facilities are being choosen. Others are
> >not. This has a major
> >business impact on the ones who aren't choosen.
>
> s 'are being'/'had been' and you'll see that this is
> not only nothing new, it's nothing which is
> particularly undesireable.  In fact, you can look at
> this as colo-competition - those colo spaces which
> provide services which the really big ISPs want will
> get their business.
>

Yes. But previously, all these ISPs made independent decisions, which
encouraged competition. If all of them jointly choose a single player in a
certain market, thats bad for competition. That has NOT happened previously.

> >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.
>
> True.  So tell me this: how will providers reducing
> their costs on settlement-free interconnections cause
> overall costs to rise?  If anything, this period of
> severe cost-sensitivity should drive the really big
> ISPs to pay very close attention to pricing, in an
> attempt to maintain and maximize revenue.
>

There are numerous examples of this in real life. The best one if the
airline industry. At any rate, once the pricing variability is taken out of
the transit game, syncing of pricing will happen. There seems to be a hope
that this will supress pricing. This may happen, although it is difficult to
see how transit can be delivered, at a profit, for lower prices. But be
careful to see the other side of the coin - it makes price increases much
easier.

> -David Barak
> "Quis custodes ipsos custodiet?" - Juvenal
>
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- Dan