Level 3 Communications Issues Statement Concerning Comcast's Actions

Leo Bicknell bicknell at ufp.org
Tue Nov 30 14:30:20 CST 2010

A follow on to my post, because it's got me thinking about "Network
Neutrality".  What we have is old world scenarios not matching the
new world order.  Let's do some diagrams.

The way things used to be, scenario #1:

   Segment A    Segment B     Segment C     Segment D
            |              |              |
  Server---> <---ISP #1---> <---ISP #2---> <---Client

Back in the day, the server operator paid for segments A and B, the
client paid for segments C and D.  The peering between the two ISP's
was about making sure the costs of Segment B and Segment C were
approximately the same, in the aggregate.

The first evolution of this was for the folks running the servers
to "merge" with ISP #1, creating a generation of data center based
content "ISP"'s, typically located in or near major US exchange
points.  In essence this made the picture look like scenario #2:

                Segment B     Segment C     Segment D
                           |              |
             Server ISP---> <---ISP #2---> <---Client

This made a lot of folks like ISP #2 unhappy.  Their segment C costs
remained the same, but by consolidating and shrinking the costs of
segments A and B into a much shorter B the server side folks were
seen as not taking their fair share of the costs.  This lead to
peering friction between these folks.

The server folks cried foul, after all it cost millions to build
out infrastructure in all of these locations, so while their backbone
cost was not as high, they were eating a lot of cost in space and
power and servers.

The second evolution though was the CDN, which in fact didn't do a
backbone at all.  They said rather than buy colo space, or build
our own colos all of which is expensive, we'll take the money we
would have spent on colo and give it directly to ISP #2, for space
and power very near the end users.  This gives us scenario #3.

                Segment B     Segment C     Segment D
                           |              |
   Rest of the Internet---> <---ISP #2+--> <---Client
                                      +--> <---Server

The ISP #2 guys loved this, finally a way for them to cut backbone
costs, and in fact the server folks were willing to pay them for
the privilege.

Now, what does this have to do with network neutrality?  Well, I've
never seen a good definition of what the term really means, but
there seems to generally be a feeling that folks should be able to
gain access to consumers (the Clients) on more or less a fair and
level playing field.  That sounds like a great concept, but the
problem comes when you look at the reality of scenarios #1, #2, and
#3 above.  I don't want Network Neutrality to come at the expense
of making one or more of these scenarios impossible.  We don't want
to say you can never do #3 just so everything is fair.  However the
costs of these three scenarios are neither the same intotal, nor
are they divided the same.

If my speculation is right here what various business folks have
gone and done in the Comcast/Level 3 situation is to replumb a
scenario #3 setup into a scenario #1 setup, effectively rolling the
clock back to a previous time.  This will cost everyone more money,
as more bits move further.  Strangely, in may in fact be more fair
in that both sides pay more similar costs, but they are in fact,
higher costs.

In essence Comcast/Limelight&Akamai had figured out how to do this
for a $1 cost to Comcast and a $1 cost to Akamai, and now Level 3
is doing it in a way that costs them $2 and Comcast $2.  Level 3
says it is fair because they pay the same cost, Comcast says it is
not because their costs are raised.  Comcast offers Level 3 the $1
solution, but it's not L3's business model so it would cost them
$3 to go set that up, and they think that is unfair.

This situation thus finally allows me to articulate something that
has been rambling around in my head for years, but only now makes
sense.  The only way you can create a network neutrality model that
is fair to all players is to regulate the market into a single
scenario.  If you picked any one of the above and forced everyone
into it, then you could also enforce that anyone could play for the
same price.  However, as long as we allow the different scenarios
it can never be fair, someone in scenario #1 will always have
different costs than in scenario #2 or #3.  It's a sort of "separate
but equal" that never turns out to be equal.

The funny thing about peering to me has always been that everyone
keeps their dealings as secret as possible.  They don't want to
disclose costs, interconnect locations, speeds or other details.
Everyone wants to believe they are getting a better deal than the
next guy due to their amazing negotiations, and they don't want to
give up that advantage.  The reality is though that all parties are
using the secrecy of these dealings to hide the myriad of ways they
screw each other and their competitors because they don't know there
are better deals to be had elsewhere.

Perhaps better than Network Neutrality would be a situation where
any time two networks interconnected they had to disclose the
location, speed, and amount of money changing hands to be compiled
in a searchable, public database. :)

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