Ratios & peering [was: Level 3 Communications Issues Statement Concerning Comcast's Actions]

Leo Bicknell bicknell at ufp.org
Tue Nov 30 09:33:36 CST 2010

In a message written on Mon, Nov 29, 2010 at 11:47:10PM -0500, Patrick W. Gilmore wrote:
> Ratios were an excuse used by GTEi to try and force Exodus, Above.Net, and Global Center to pay for peering back in 1998.  It had a valid, technical reason behind it - the cost of bit-miles.[*]  Unfortunately, most people have forgotten this and simply claim one side is more 'valuable' than the other.  In reality, the "value" of a relationship is NOT related to the number of bits flowing in either direction.
> [*] 10 second explanation for those who do not understand: I hand you a small HTTP GET request, you carry it across the country.  You had me a 1500 byte web page, I carry it across the country.  My costs are much higher than yours, you need to compensate me for the additional costs.

I don't know how much GTEi specifically played into this, but this
is all one of the reasons AboveNet actually asked peers for MEDs
and honored them.  AboveNet had many peers that sent useful MEDs
(typically from IGP cost on the other side) and routed based on
them.  That completely flips the cost.

I agree it's important to look at such issues when peering, because
it should be "fair" for some approximation of fair.   However if
folks really wanted fair they would look at technical solutions
like MEDs, selective routing, peering with regional ASN's, etc.

I'll also point out that it's my feeling that over time the issue
you describe has become less important.  When we were paying $50,000
a month for an OC-3 across country the bit-mile cost was huge, and
moving those extra bits was a huge deal.  Now you can get a cross
country 10GE wave for $5,000 a month.

A large part of this discussion is about the cost of providing
bandwidth at the edge.  I would venture for most residential end-user
providers somewhere between 75-90% of the infrastructure cost is
from the customer prem to the "POP" in the nearest major city.  Sort
of the extended last mile, if you will.  The last 10-25% is the
"backbone" cost, city to city transport, peering, etc.    I think
that ratio is increasing over time, in another 10 years I expect
it will be 90-95% local cost, and 5-10% backbone cost.

I said before, ratio is an outdated concept, and getting more so
by the day.  That doesn't mean ignore it, or don't understand it,
but folks who are depeering based on ratio are either living in the
past, or using it as a straight up excuse for their real motivations.

       Leo Bicknell - bicknell at ufp.org - CCIE 3440
        PGP keys at http://www.ufp.org/~bicknell/
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