<div dir="ltr"><div dir="ltr"><br></div><br><div class="gmail_quote"><div dir="ltr" class="gmail_attr">On Tue, Mar 16, 2021 at 3:33 AM Douglas Fischer <<a href="mailto:fischerdouglas@gmail.com">fischerdouglas@gmail.com</a>> wrote:<br></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div dir="ltr"><div style="font-family:"courier new",monospace;font-size:small">There is no specific story on the focus.<br>My objective is to go a bit beyond the technical aspects of Peering, or De-peering.<br><br>At the first moment, I don't mention some cases that I have in mind, exactly to avoid the polemic and focus on the aspects around the cases.<br><br>I will give a hypothetic example, with no real names:<br><br>---<br>The "SteveAndEdNet", a CDN Company, decides to extend its branchs until "Kingdom of Far Far Away", and creates a POP there.<br>Installs itself on "DorisInnDatacenter", connects with some IXPs over there, connects some PNIs with some nobles.<br>But, after some time, "SteveAndEdNet" make a deal with "RumpelstiltkinNet" a Transit provider that operates there.<br><br>On that deal "RumpelstiltkinNet" ensure to supply the traffic demanded to
"SteveAndEdNet" POP to be considered technical justifiable...<br>But it also demands, that "SteveAndEdNet" drain all the traffic to IXPs and PNIs...<br>With that, "RumpelstiltkinNet" can be the only one reseller of the content delivered by "SteveAndEdNet".<br>---<br>This is a foggy example that I'm trying to understand better by the point of view of Economics Dumping.<br><br>And then??<br>Can this be considered an anti-competitive act?<br><br><br><br>If anyone feels more comfortable reaching me privately, no issues with that.<br></div></div></blockquote><div><br></div><div><br></div><div>Hi Douglas,</div><div><br></div><div>I've been involved in negotiations with country-level providers that engaged in negotiation tactics like that. </div><div><br></div><div>From the content-provider side, such demands (ie, drain all traffic away from IXPs and other SFI PNIs) </div><div>might last a short time, if RSN (RumpleStiltskinNet) undercuts the pricing so low on their connectivity </div><div>that it makes sense to move all the traffic over, or bundles in other products (power, space, remote </div><div>management, etc.) so that the overall package price is lower than it would be if the IXP and SFI PNIs </div><div>were maintained.</div><div><br></div><div>However, such relationships tend to fall apart the first time RSN has a large-scale outage </div><div>that negatively impacts the CDN and all its content customers, at which point the </div><div>negotiation table is usually re-opened, and the CDN says "in order to protect our </div><div>customers from your ineptitude, we require alternate pathways for the content to </div><div>be served in your region" -- and the exclusive arrangement goes away.</div><div><br></div><div>The simple fact of the matter is that in general, agreeing to single-home your </div><div>content behind a single provider results in reduced availability for the content, as </div><div>a single provider has less redundancy and less diversity than a blend of multiple </div><div>providers, whether paid or settlement free. And once a major outage happens </div><div>that threatens the top-line revenue numbers for the CDN, saving money on the </div><div>bottom line suddenly becomes much less important than preserving the top-line </div><div>revenue number.</div><div><br></div><div>There's a finite and limited benefit RSN can offer by reducing cost numbers; </div><div>but there's a potentially *unlimited* upside risk. That is, RSN can't reduce </div><div>your cost numbers from what they are today to less than zero; so there's a </div><div>maximum benefit they can offer. But if they have a bad week, and you go </div><div>dark, and lose all your customers, you could lose all your revenue--and there's </div><div>no limit on how much you could lose on that end, as your customer base and </div><div>revenue numbers go up.</div><div><br></div><div>Thus, on balance, such agreements don't last, as either the CDN goes out </div><div>of business, and the agreement thus ends, or the CDN becomes more </div><div>successful, and the top-line revenue dollar value risk outweighs the </div><div>offered cost-reduction saving benefit RSN is bringing to the table, </div><div>and the agreement is thus terminated.</div><div><br></div><div>I hope this helps clear up the situation for you. :)</div><div><br></div><div>Thanks!</div><div><br></div><div>Matt</div><div><br></div><div><br></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div dir="ltr"><div style="padding:0px;margin-left:0px;margin-top:0px;overflow:hidden;color:black;text-align:left;line-height:130%;font-family:"courier new",monospace"></div></div>
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