Updated ARIN allocation information

William Herrin bill at herrin.us
Fri Jan 31 22:50:04 UTC 2014

On Fri, Jan 31, 2014 at 4:29 PM, Matt Palmer <mpalmer at hezmatt.org> wrote:
> Imagine one of the big players saying, "we're going to charge you $X per
> route you send to us" (just like transit agreements that state, "we will
> charge you $X/GB of traffic"), or "your contract allows you to send us N
> routes" (just like, "your contract allows you to send us N Gb of traffic").
> About 15 minutes later everyone else would start doing it, to recoup the
> costs of sending routes to that provider.  Peering would be considered not
> only if the volume of traffic was mutually advantageous, but also if the
> routes exchanged were mutually advantageous.

Hi Matt,

It doesn't work. Here's why not:

First, there's an error in your bytes model. You express it as "your
contract allows you to send us N Gb of traffic" but that's not
accurate. It's send AND receive Gb of traffic. The two bottoms of the
pyramid, sender and recipient both pay. Their fees combine with other
fees as their ISP pays the next ISP up until it reaches two ISPs who
"peer" with each other. The peers trade bytes which each has been paid
by their endpoint to move to and from the other.

This model works. We know it works because the Internet currently runs on it.

Your route originator pays to have his route introduced into the
system, and his ISP pays to have it introduced further up, and so on
up to the top of the pyramid where two ISPs peer. Now you have a
problem. How does the other side of the pyramid get paid carry the
routes on the way back down?

There are at least a couple of potential solutions to this problem.

One solution is that you auction off the right to announce a covering
route for each /8. Then your ISP deals with paying everybody in a
reliable set of transit chains that announces your route to that
aggregation carrier. The "auction" is sort upside down where instead
of paying for the right to announce the covering route a company bids
on offering the best price cross reliability guarantee on a RAND

Everybody is free to carry your specific route, of course, but those
who choose not to will still be fully connected to you via the
covering /8 route. Even if the packet starts its trip via the covering
route, it won't necessarily reach the aggregator. As soon as it enters
any network carrying your specific announcement, the packet veers off
towards you.

Another solution would be some kind of international route
clearinghouse. Everybody operating BGP on the Internet joins the
clearinghouse and specifies how much they charge to carry a route.
Then for each route you wish to introduce, you pick all the ASes whose
price you're willing to pay. You pay the clearinghouse. The
clearinghouse does the accounting and provides each AS with their
payment and the list of routes they're being paid to accept upon
receiving an advertisement.

Analysts with the clearinghouse evaluate all the ASes, their
geography, size, connectedness and their required payments. They
collect ASes into technically useful sets with an aggregate price
which buyers can use instead of having to examine each AS for
themselves. By design, these sets try to exclude small-time ASes
asking for too much money (or any money) to carry your route.

Finally, anybody who is not a "tier-1" transit free provider adds a
default route to one or several of their upstream transit providers to
carry packets for the routes they chose not to accept. So, if the
clearinghouse analysts did their jobs well and you bought the route
sets which made sense, you remain fully connected.

Bill Herrin

William D. Herrin ................ herrin at dirtside.com  bill at herrin.us
3005 Crane Dr. ...................... Web: <http://bill.herrin.us/>
Falls Church, VA 22042-3004

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