a question about the economics of peering

Jared Mauch jared at puck.Nether.net
Fri Nov 30 17:06:07 UTC 2001

#include <standard.disclaimer.h>

On Fri, Nov 30, 2001 at 11:52:28AM -0500, Alex Rubenstein wrote:
> Today, I was approached by *unnamed-ethernet-extension-company*. They
> extend ethernets between several US and UK peering exchanges.
> While speaking with them today, thier engineer and I got into a little bit
> of a disagreement as to why people peer with each other at public exchange
> points. My belief is that generally speaking, networks meet at public
> exchange points (such as MAE-*, LINX, AMSIX, AADS, etc) is to exchange
> traffic with each other more economically (read: save money).

	This is/was the case for some of my previous employers.  We
operated regional networks and persued regional peering @ AADS
amongst other places to reduce the cost of upstream connectivity.. primarily
to interconnect with a number of the .edus and "easy-to-peer-with" people
because we could save costs.  We typically figured out/guessed at the
bandwidth usage/savings with flow stats or other means and were
generally correct.

> His belief is that people will pay a premium to get to an exchange point,
> because it's worth paying a premium to have 'less hops' between two
> networks.

	I wouldn't say a premium, but it's generally speaking nicer to
have a more direct connection.  I persued ethernet handoffs in various
regional CLEC spaces with some of the other local ISPS at times
but they typically didn't have bgp out to the edge (or we didn't
have it there) so it wasn't easy to do so.

> Essentially, he said that paying more for peering that for transit is
> typical, and to be expected, and most people accept this.

	If it's cheaper to buy transit than to show up at an exchange
point why would it be worth it?  Then you can use your SLA to your
advantage.  Get a few free months possibly depending on how your
upstream operates their network and how they do their SLA.

	Plus having someone you can call and open up tickets about
congestion, etc.. where if you peer with the network that has
the congestion and there is no money changing hands there is not
a lot of incentive for them to fix it just for you.  Use your
account manager to your advantage IMHO and work to get good
quality service out of your network.  Or get some money
back or a discounted service then work on showing up at the various
exchange points, IMHO.

	- Jared

Jared Mauch  | pgp key available via finger from jared at puck.nether.net
clue++;      | http://puck.nether.net/~jared/  My statements are only mine.

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