Backbone IP network Economics - peering and transit

Tue Apr 20 15:08:21 UTC 2004

On Tue, Apr 20, 2004 at 05:15:48AM +0000, Paul Vixie wrote:
> 
> > > Peering?  Who needs peering if transit can be
> > > had for $20 per megabit per second?
> 
> anyone whose applications are too important to risk dependency on OPNs
> (other people's networks).

OPNs also carry some of the consumers of your bits and you consume
some of theirs.  Unless you're peering with every laptop directly,
somewhere, somehow, you'll be traveling on OPNs, wether it is dark
fiber, a circuit, or a wavelength.

Time to bust out the cardinal vs ordinal optimization argument again.

  option a) getting the best decision for certain (cost $1 million)
  option b) Getting a decision within the top 5% With probability
             = 0.99 (cost $1 million/x), In real life, we often settle
	     for such a tradeoff with x=100 to 10,000

Under independent sampling, variance decreases as 1/sqrt(n). Each order
of magnitude increase in certainty requires 2 orders of magnitude
increase in sampling cost. To go from p=0.99 to certainty (p=0.99999)
implies a 1,000,000 fold increase in sampling cost.  

So, instead of creating very nice soundbites like OPNs (which I will
be shamelessly appropriating for my own use thank you very much),
I suggest we spend a bit more time actually _analysing_ using
techniques from operations research as to _what_ gives us the
most bang for the buck.

Dan golding has it right re: peering not being a philosophy, but
rather an _engineering_ decision.  I touched upon this at the 
Great Peering Debate at the NANOG Miami, which was hosted by
Bill Norton.

/vijay