Stephen Sprunk ssprunk at
Thu Nov 14 19:32:55 UTC 2002

Thus spake "E.B. Dreger" <eddy+public+spam at>
> DD> 1) Long haul circuits are dirt cheap.  Meaning distance
> DD> peering becomes more attractive.  L3 also has an MPLS product
> DD> so you pay by the meg.  I am surprised a great many peers are
> DD> using this.  But apparently CFOs love it
> Uebercheap longhaul would _favor_ the construction of local
> exchanges.

Incorrect.  Cheap longhaul favors a few centralized exchanges.  If there is no
economic value in keeping traffic local, it is in carriers' interests to
minimize the number of peering points.

> Let's say I pay $100k/mo port and $10M/mo loop... obviously, I
> need to cut loop cost.  If an exchange brings zero-mile loops to
> the table, that should reduce loop cost.  Anyone serious will
> want a good selection of providers, and the facility offering the
> most choices should be sitting pretty.

Most vendor-neutral colos have cheap zero-mile loops.

> Likewise, I agree that expensive longhaul would favor increased
> local peering... but, if local loop were extremely cheap, would
> an exchange be needed?  It would not be inappropriate for all
> parties to congregate at an exchange, but I'd personally rather
> run N dirt-cheap loops across town from my private facility.

What is the cost of running N loops across town, vs. the cost of pushing that
traffic to a remote peering location and back?  Be sure to include equipment,
maintenance, and administrative costs, not just circuits.

> The above are "big bandwidth" applications.  However, they do not
> inherently require exchanges... _local_ videoconferencing, yes.
> Local security companies monitoring cameras around town, yes.
> Video or newscasting, yes.

None of these applications require local exchanges.  There is a slight increase
in end-to-end latency when you must use a remote exchange, but very few
applications care about absolute latency -- they only care about bandwidth and

> Distributed content, yes.  (If a traffic sink could pull 80% of its traffic
> a local building where cross-connects are reasonably priced...)

Distributed content assumes the source is topologically close to the sink.  The
most cost-efficient way to do this is put sources at high fan-out areas, as this
gets them the lowest _average_ distance to their sinks.  This doesn't
necessarily mean that putting a CNN mirror in 100,000 local exchanges is going
to reduce CNN's costs.


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