Evolution of the U.S. Peering Ecosystem v1.1

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Hi all -

Thanks to those who provided comments to the last white paper draft of "The Evolution of the U.S. Peering Ecosystem". I've made most of the changes and added the data points as suggested, so I am now ready to send out the document more broadly. Lots of acknowledgements in the acknowledgements section now - Thanks!!

In a nutshell, the Evolution of the U.S. Peering Ecosystem introduces the notion of the Internet as a set of Regional Peering Ecosystems, each with its own
- Tier 1s (who have access to the entire regional routing table solely through peering relationships),
- Tier 2s (broadly all other ISPs), and
- Content Providers

These players are modelled with characteristics (upstream transit links, peering links, etc.) and their motivations (described as Peering Inclinations (Open, Selective, Restrictive, or No Peering) articulated in Peering Policies) that can predict roughly their behavior in the Peering Ecosystem.

The "Evolution" of the U.S. Peering Ecosystem is the result of five forces:
1) The so-called dot.bomb - economic collapse of the telecom sector
2) The emergence of a large scale used equipment market
3) The exponential growth of Kazaa traffic costing eyeball networks $$$$
4) The failure of @Home - cable companies provide Internet services themselves
5) The rapid decline in transport and transit prices

The three major changes roughly are:
1) The Cable companies are peering (with Tier 2s and each other) in a *big* way
2) The Large Network Savvy Content Companies are getting into peering in a *big* way
3) The Large Network Savvy Content Companies are getting their content directly onto the Cable companies eyeball networks by peering relationships.

These are significant changes due to the volume of traffic exchanged, the amount of money being saved by avoiding intermediary transit providers, and the performance implications of these direct connections.

As promised, if you are interested in this stuff I will gladly send you a copy of the latest draft, v1.1. I'm working on the same exploration for the Asia Pacific Peering Ecosystems (hence the APRICOT Peering Track note I sent out earlier this week).

Hope this helps -

Bill

2

1) The Cable companies are peering (with Tier 2s and each other) in a
*big* way

That's probably why ATDN depeered ~20 networks over last few months,
while Comcast and Charter do not peer at all.

2) The Large Network Savvy Content Companies are getting into peering in
a *big* way

With transit bandwidth at 20k$/GE, and Equinix shared fabric now priced at
nearly half that, I don't see that many "content companies" peering all
that much.

3) The Large Network Savvy Content Companies are getting their content
directly onto the Cable companies eyeball networks by peering
relationships.

I wish.

Out of big eyeball networks, only SBC has reasonably open policy, rest are
attempting to force "content networks" into paid peering arrangements
using restrictive ratio requirements

3

> 1) The Cable companies are peering (with Tier 2s and each other) in a
> *big* way
That's probably why ATDN depeered ~20 networks over last few months,
while Comcast and Charter do not peer at all.

I had not heard that. As for Comcast and Charter, I would add the word "yet."

> 2) The Large Network Savvy Content Companies are getting into peering in
> a *big* way
With transit bandwidth at 20k$/GE, and Equinix shared fabric now priced at
nearly half that, I don't see that many "content companies" peering all
that much.

The phrase, "You get what you pay for" comes to mind. There is real difference between transit services IMHO.

Also, you rarely use the full gigE in these types of arrangements, so you need to be a little careful doing the "simple math."

Having said all that, the transit price pressures are certainly there and it does make the peering financial argument a little tougher. I've heard the argument that "Peering is better than transit. It ought to cost more."

> 3) The Large Network Savvy Content Companies are getting their content
> directly onto the Cable companies eyeball networks by peering
> relationships.
I wish.

Well then you shall receive. The large guys do peer (Yahoo!, MSN, Google, EA, Sony Online, etc.) in a very big way. I expect too these guys are simply leading the charge - those content companies large enough to employ a network engineering staff that can do the math will be following as well. It is not only a financial motivation; peering provides greater control over routing and is often seen as a performance enhancing strategy. Folks like Yahoo! seem to emphasize the end-user performance improvements over the financial savings these days.

Out of big eyeball networks, only SBC has reasonably open policy, rest are
attempting to force "content networks" into paid peering arrangements
using restrictive ratio requirements

Hmm. SBC has what I call a "Selective Peering" inclination; they will peer with you if you meet certain criteria. The cable companies are all different of course but generally seem to have migrated from a "No Peering" inclination (when @Home ran things for them the cable companies didn't peer) to an "Open Peering" inclination to reduce costs (and to deal with Kazaa traffic), to a "Selective Peering" inclination. I see this last step as an operations sanity motivation; peer with those who have at least 10M of traffic to exchange on a couple coasts. If you don't have that much traffic it may not be worth the time to configure the session, and when things break it may be more hassle than it is worth.

The ones who are a bit different are the "Restrictive Peering Inclination" folks; those who have a peering policy articulated solely so they can say "No" with a reason. Rather than deal with the hassle of peering requests, some of these guys don't articulate their Peering Inclination in the form of a Peering Policy. "We have all the peering that we need" is the attitude, and, not to open a can of worms here, but it is a business rational attitude.

Bill

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The "no" is for the automatic 100% (or other prime rate) discount.

I am reasonably sure that every single one of them would happily say "Yes" with a price.

Try asking. You may find that peering@anywhere is essentially a sales channel serving a particular wholesale market segment. Of course, they might not be any more interested in explaining this to you than the local AMEX Black contact is likely to tell me exactly how an arbitrary acquaintance of mine could qualify for their offering.

People who sell you money vary in their approaches, and some particularly sophisticated deals are not widely available, because of risk to the seller. When you are trying to buy improved business efficiency that is attached to bits rather than to a car, a building, or cash, is it OK to rely upon analyses that miss this?

  Sean.