Generation of traffic in "settled" peering arrangement

Folks,

Think very carefully about what happens as traffic increases...

Given that the context is the introduction of "settlement-based" peering
for traffic imbalance in a shortest-exit world, then all of the various
schemes for generation of traffic (web crawlers, backup services, etc)
are no problem whatsoever, and may actually been seen as desirable...

Background:

  Imagine a nationwide Internet provider with customer A on the west
  coast and customer B on the east coast. Customer B sends queries
  to customer A's server, and receives quite a bit of data in return.
  (all of this traffic stays on the provider's backbone in this case)
  Presume for the moment that the provider charges the customers (A&B)
  on a usage-basis which takes both sending and received traffic levels
  into consideration. Now, one could charge each of A and B the full
  cost of the traffic exchanged (which would effectively be "double
  dipping" and quite profitable :slight_smile: but a competitive market makes it
  far more likely that the rate per traffic measure will be such that
  A & B together pay the costs associated with their traffic exchange

  Now, given that A & B are both on the provider's network, everything
  is fine. When we hypothesize that A is instead connected to a peer
  network, we don't know whether costs will be recovered. In a shortest-
  exit world, traffic is quickly exchanged to the original provider's
  network and hence the costs of transmission to B are almost identical
  to the case where the A was a customer. Given that there's only one
  customer (B) now paying for these costs, this presents a potential
  problem. Customer B expects to pay their fair share of the costs,
  but doesn't expect to pay a larger portion of the total costs simply
  because A is connected to another provider.

  The truth is, there is actually nothing wrong with this situation if
  the traffic to/from the peer is of the same order of magnitude. To
  elaborate: a peer provides traffic which must be carried without
  corresponding sender-side revenue. On the other hand, the peer also
  allows the Internet provider to provide a similar level of sender-paid
  traffic which (by nature of being handed off) has very little actual
  transmission costs. This is why typical peers are overall neutral
  to cost recovery, and why peers which send far more traffic than
  received are problematic.

  There are a few options that have been mentioned to this situation,
  including the "receiver pays full freight / sending is free" model,
  the use of something other than shortest-exit routing, and introduction
  of settlements for such traffic. For purposes of this thread, we're
  trying to determine if the settlement approach is doomed to failure
  due to ability to generate additional traffic flows through innovation.

Assessment:

  Presuming that a peer which is a net exporter of traffic begins to
  address this by encouraging additional traffic from customers to its
  network, this would result in more sender-paid originating traffic
  which quickly moves to the peer. Such traffic is (as noted above)
  quite profitable, as it includes full cost recover but little actual
  costs due to shortest to the peer. This is actually good for
  both networks, and us back to an Internet where more traffic is
  considered a good thing by ISP's at both ends of the connection.

/John

p.s. The fact that the sender of traffic should be paying some portion
      of the resulting costs is not a surprise to anyone; many of the
      content companies that I've spoken to believe they already are
      paying more as traffic increases, and were quite surprised to
      find that it doesn't actually make it to the networks which
      bear the brunt of the traffic carriage.

p.p.s. As noted, departure from shortest-exit is also another approach
        which may provide some answers to this situation, but that's a
        different topic which deserves its own thread. This message
        is simply noting that settling for peering traffic is quite
        viable, despite assertions to the contrary regarding traffic
        generation. As long as you're billing the senders on your
        network for increased usage (and handing it off shortest-exit),
        increased traffic is good thing.

      This message is simply noting that settling for peering traffic
is quite viable, despite assertions to the contrary regarding
traffic generation.

But you're making the critical assumption that the peer is more eager
to get the traffic delivered than your customers are to receive it.
If we were talking about paying to send spam, you'd be entirely right.
But we're really talking about paying to deliver web content, and the
jury's still out about that.

It may turn out to be the case that providers with a lot of retail
customers have to accept expensive web-hosting peers as a cost of
retaining the dialup customers. Or it may turn out that providers
with a lot of web hosting customers may have to pay for peering to get
the connectivity that their customers' advertisers demand.

But the days of peering purely based on traffic volume were over
before they began, the day an international IP link landed in the US
paid entirely by the foreign ISP. That was quite a while ago.

p.p.s. As noted, departure from shortest-exit is also another approach
        which may provide some answers to this situation, but that's a
        different topic which deserves its own thread. This message
        is simply noting that settling for peering traffic is quite
        viable, despite assertions to the contrary regarding traffic
        generation. As long as you're billing the senders on your
        network for increased usage (and handing it off shortest-exit),
        increased traffic is good thing.

Nothing you've said refutes the fact that transaction based settlements
encourages waste.

You've effectively pointed out that when properly billed it can be a pass
through situation for the networks and only web hosting clients will
suffer the brunt of the waste.

The ability to generate waste in this system legitimately and non
fraudulently is purely limited by your creativity. The use of smurfs as
an example (non legitimate and fraudlent) is an easy to knock down straw
man. A large of amount of legitimate and non fraudulent traffic, orders
of magnitude larger than existing traffic flows, in any quantity desired,
can be generated in either direction to achieve whatever revenue flow you
want.

This in effectively provides networks the open ended ability to extract
cash from compeititors web hosting customers.

In fact it could result in the situation where, for the same amount of
actual sales online, it is more expensive to host at network A than
network B because network B happens to have a large net index project that
indexes content on everybody ELSES network. Don't like "net indexing"?
Use any other suitable traffic generating application, there are plenty.

Mike.

+------------------- H U R R I C A N E - E L E C T R I C -------------------+

This in effectively provides networks the open ended ability to extract
cash from compeititors web hosting customers.

Err, typo. That should be:

This effectively provides networks the open ended ability to extract
cash from competitors web hosting customers.

+------------------- H U R R I C A N E - E L E C T R I C -------------------+

(This message assumes Exodus will lose their peering arangement with BBN
and I'll either not have routes to Exodus through BBN or they will be
worse than they were before)

My problem is we purchase transit from BBN. Why should I renew my
contract with BBN when I can get better connectivity from someone else? If
I stay with BBN how do explain why I did when their connectivity has been
degraded? They'll start leaving me for providers with better connectivity.

That has been exactly my point.

You bought that transit expecting BBN to get you to the entire IP-connected
world where contiguous connectivity is *possible*.

Now BBN is saying "well, all except this one place, because we don't like
the cost of carrying the traffic you requested (but which you had assumed
you already paid them to carry)".

This is why anything other than open, unrestricted peering is bogus.

People say "well, you will just show up in one place and dump everything
there, effectively charging everyone else for your costs".

That's bogus as well, and here's why:

1. You can't control quality on someone ELSE's infrastructure. This
  drives you to install your own circuits to multiple points across
  the country, because the longer you hold onto the packets the better
  your ability to insure quality.

2. By installing circuits you gain access to additional markets
  (cities). This is a real, honest-to-God tangible benefit which
  offsets the cost. It also allows entirely-on-net services to
  be sold which again, goes back to point (1) (QOS).

Bottom line: If you buy a transit connection, you're expecting TRANSIT.

If a backbone provider DELIBERATELY interferes with that transit by cutting
off people who refuse to pay for something they've already been compensated
for, and for a flow which their customers REQUESTED, the proper step for
their customers to take, IMHO, is to drop their contract into the nearest
paper shredder and send back the chips.