interconnection costs

Reza Motamedi motamedi at
Wed Dec 23 19:05:40 UTC 2015

Thanks James,

I totally missed that section. Sorry about that. I think the picture is
becoming more clear in my head now.

Let me first make sure my terminology is right.
- With respect to peering, there are "transit" in which you pay the other
AS in 95-5 fashion or whatever, and "settlement-free" in which two ASes
agree not to charge each other for traffic exchange. In the latter, the
exchanged traffic is limited to the customer cone of the two ASes.
- Peering can happen either "publicly" though an IXP or "privately" through
directly linking the ports of two routers and exchanging BGP traffic.

Now, if I understood correctly, the difference between the cost of public
and private peering is that in public, one AS pays to be connected to the
IXP fabric, perhaps to the IXP provider and the colo provider. I'm assuming
IXP and colo provider are not always the same organization as it is the
case in SIX (Seattle IXP) and colo providers in Westin Building including
Equinix, ZAYO, etc. So the AS is being charged for becoming an IXP member,
and also to be allowed to take a line from its rack to the IXP's "meet me
room". Additionally if one decides to buy transit over the IXP it has to
pay the transit providers.
In Private peering however the AS pays the colo provider for the xconnect
per ASes that it wants to peer with. The cost of transit would be
additional if the peering is in fact a transit and not settlement free.

All the costs of HW, SW, personnel, administration, and perhaps
transmission between colos (including remote peering, being waved to
another location, tethering) would be the same, right?

Best Regards
Reza Motamedi (R.M)
Graduate Research Fellow
Oregon Network Research Group
Computer and Information Science
University of Oregon

On Wed, Dec 23, 2015 at 9:07 AM, James Bensley <jwbensley at> wrote:

> On 22 December 2015 at 19:11, Reza Motamedi <motamedi at>
> wrote:
> > Thanks guys for the replies.
> >
> > I wanted to clarify two things in my questions. First by peering I did
> not
> > necessarily mean "settlement free" interconnection. I meant any inter-AS
> > connection. My understanding is that in addition to the cost of transit
> that
> > should be paid to the transit provider, there also exists the cost of the
> > xconnect that is charged by the colocation provider. Secondly, my
> question
> > was more about the expenses, as opposed to the technical costs/benefits.
> I
> > have browsed through the "Peering Playbook", but I think its more about
> > providing a case "settlement free" peering.
> Dude, how are you going to weigh up the costs and benefits of peering
> if you don't include the "costs". I refer you back to the same
> documented I referred you to yesterday...
> > On Tue, Dec 22, 2015 at 9:33 AM, James Bensley <jwbensley at>
> wrote:
> >>
> This time look at section 4 of this huge and hard to navigate
> document, "4. Peering Costs":
> Loosely extrapolating:
> Network transport: You need to be physically connected unless you
> blagged space in the same rack and can patch in for free.
> Hardware: You need tin to route packets.
> Software: You need software to monitor the packet routing.
> Colocation: You need space/power/cooler/security in which the tin can
> operate.
> Staffing costs: Someone has to configure that tin.
> Admin/engineering overhead: Someone has to manage the peering process
> Peering port: You probably have to pay to peer.
> Reseller ports: You might need remote connectivity to the LAN and
> "network transport" above would refer to a cross connect to the remote
> peering provider instead of directly into the IXP LAN.
> James.

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