Leaving public peering?

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1

This year I've been seeing what appears to be an increasing trend among
service providers.. making the decision to leave public peering. I'm
sure others on this list as seeing that trend as well. I have a couple
of guesses, but I'm curious , and I wanted to get some other thoughts as
to the "why".

I don't have exact numbers, but off the top of my head, I'd guess
somewhere around two dozen of our peers have left various peering
exchanges. Quick couple I checked still appear to be operational as a
company, so I'm willing to remove "death" as a valid reason.

I realized that paid transit is down at almost obscene levels, but is
that enough of a reason to increase hop-count, latencies, etc?

Why disconnect from public mostly-free peering?

-donn

2

In a message written on Wed, Dec 02, 2009 at 12:46:46PM -0800, Lasher, Donn wrote:

I realized that paid transit is down at almost obscene levels, but is
that enough of a reason to increase hop-count, latencies, etc?

Why disconnect from public mostly-free peering?

Let's look at some economics. I'm going to pick on some folks here,
solely because they have prices online and because they are, I feel,
representative prices.

"Home of the $4 Megabit!" So we have transit prices at $4 per megabit.

http://www.de-cix.net/content/services/public-peering.html

A 1GE link to the exchange is 1000 euro per month, which is $1505 USD at
the moment, let's call it $1500 for round numbers.

Now, your 1GE exchange port really shouldn't be run past 60% or so, if
you want to provide good service. So it's really $1500 for 600Mbits,
or $2.50 per Megabit.

If you're an ISP you look at this and go, humm, I take in $4 from my
customer, and hand $2.50 of it right back out to an exchange operator
if I use public peering, making the exchange 62% of my costs right up
front. On the other hand, if I choose wisely where I private peer I
can do it at places with a one-time fee for the cable, so there is
$0 in MRC. I have to buy a router port, sure, but it's also $0 MRC,
just a capital asset that can get written off over many years.

This is the math with the $4 megabit advertised price. The halls at
Nanog are awash in $2 a megabit rumors if you have large enough commits
(say, a few 10GE's). Taking in $2 and paying the exchange operator
$2.50 of it....well, that's not so good. :slight_smile:

Transit prices have fallen enough that MRC's for switch ports, and
even MRC's for fiber runs (are any of you still in a colo that wants
$500 a month for a fiber run, I didn't think so) are eating up huge
chunks of the inbound revenue, and thus just don't make sense.

Now, before someone points it out, yes, DECIX's rate per megabit is
lower on a 10GE and a second port, so if you can move 2 ports of 10GE of
traffic you can make it a lot cheaper. Also, Cogents $4 a megabit is
probably predicated on you being in the right location and having the
right commit, if you need a DS-3 in West Nowhere you'll pay a higher
rate, and that helps offset some of the costs. I've oversimplified, and
it's a very complex problem for most providers; however I know many are
looking at the fees for peering ports go from being in the noise to a
huge part of their cost structure and that doesn't work.

3

In what way is hop-count a valid measurement of network preformance/quality?

Today with gigabit links serialisation-delay is a non-issue so hop-count is not important anymore.

Regarding your question there, I don't know what size of players you're talking about, but I'd imagine that having 3-4 engineers who knows BGP that can be on-call is actually more expensive compared to less people who needs to know about this and you just buy cheap transit... At least this is true for some small and mid-sized players.

4

Leo,

the DE-CIX pricing is now 500 Euro/month...since 1st october...see end
of that page.
Both DE-CIX and AMS-IX have decreased their pricing this year..almost at
the same time. I guess this is a move to stop company leaving public
exchanges...i have seen this trend, too.

Regards,
Jonas

5

I have some "hard numbers" from LINX. LINX receives 1 new member request per week. There were a handful of cancelations in the last year. Doesn't seem to me like a lot of people are leaving public peering.

It is not surprising that some networks turn down their peering - just the opposite. Business models change, special offers pop up, etc. Someone is going to turn down their peering. Instead of looking at the outliers, look at the fact more ASes are peering in more places than ever before.

Peering on the Internet is robust, growing, and happy.

6

Leo Bicknell wrote:

rate, and that helps offset some of the costs. I've oversimplified, and
it's a very complex problem for most providers; however I know many are
looking at the fees for peering ports go from being in the noise to a
huge part of their cost structure and that doesn't work.

Let's also not forget those who aren't sitting right next to the exchange. I'd love to have better peering, private and public, but there's the additional 300 miles of long haul to consider as well.

Then there's the consideration of redundancy. Do I want redundant feeds to the exchange or do I want to consider my local transits to be the redundancy. Will I be purchasing transit via the exchange link to perform redundant functions for my local transits?

It's always a difficult financial decision, and I've been battling it for years. I want the option for more direct connectivity and more peering options, but there's additional costs which are hard to justify to the bean counters.

Jack (still no dual stacked IPv6 transit due to same issues as above)

7

Just to chime in on this subject. We're at Equinix in San Jose. For
access to the peering at their facility, they charge a $1000 MRC Fee,
plus another $250 MRC for a cross-connect for GE port. I believe they
also charge a $1000 NRC fee as well. Private peering would be an option
if they didn't charge for every cross-connect a monthly fee. That fee is
pretty high to small people like us, which really prevents us from
entering the peering stages we'd love to have at this point. If we had
private peering, we'd have to pay the fee regardless. $250/mo is quite a
lot. Especially if you're talking at dollars per meg.

It doesn't make sense.

-S

8

That is not why LINX lowers its prices. (I cannot say why AMS-IX lowers its prices.)

LINX is a member-based organization. The member _own_ the exchange. They are paying themselves, and they only pay themselves as much as it costs to run the exchange. With more members, more scale, and advances in equipment, unit (i.e. port) costs go down.

In a cost-recovery model, that means prices drop.

LINX dropped prices mid-year 2009, and are dropping prices again in January 2009. AMS-IX dropped prices once in that time. DE-CIX actually raised its prices for many members, so they could lower their prices for others. Interesting strategy....

9

Yeah I have had researched multiple exchange points across the world in recent months and i can say, not only AMS-IX / DE-CIX but pretty much everyone out there is lowering the prices, it might be because of few reasons,

lifted regulations from governments regarding laying new fiber, and operations.. economic reasons, operational advantages vs cost... I am sure all Exchange management have considered those and started re-pricing their service offerings. The other thing people also notices that, you really never are able to get to a big network if you are a small one via exchange due to peering requirements of these big ISPs, so they rather go and get transit and don't worry about maintaining peering sessions with something+ number of peers, but simply 2-3 transit providers who have decently been chosen. Also with a good homework, you can practically achieve great results that way... still sad to see a lot departing from public exchange points..

Mehmet

10

Peering is often sold as 'cheaper than transit' - for everyone that is a gross generalisation, for many networks it is not true, but for some networks it is true. But when managed properly peering should always lead to improved customer experience (speed of access, latency, availability) and access to a community of like minded operators with a common interest.

Therefore, certainly in Europe, we are seeing a growth in the number of networks peering - and from an ever increasingly wide section of the community (service providers, content, e-commerce, enterprise, gaming, education/research networks...). And with a falling cost in long haul transmission we are seeing networks in Europe peer mode in the US, and networks from all over the world peering in Europe.

Check out this report on the success of peering : https://www.euro-ix.net/member/m/document/showDocument/id/158

<spam> .... and then talk to exchange operators in the community about how you too can get involved. :slight_smile: </spam>

11

Check out this report on the success of peering :

  >https://www.euro-ix.net/member/m/document/showDocument/id/158

This seems to be a protected document behind login-only section of the
site. Can anyone comment on wether the document should be publically
accessible? Would love to spread it around.

Thank you.

/kc

12

the DE-CIX pricing is now 500 Euro/month...since 1st october...see end
of that page.
Both DE-CIX and AMS-IX have decreased their pricing this year..almost at
the same time. I guess this is a move to stop company leaving public
exchanges...i have seen this trend, too.

That is not why LINX lowers its prices. (I cannot say why AMS-IX lowers its prices.)

LINX is a member-based organization. The member _own_ the exchange. They are paying themselves, and they only pay themselves as much as it costs to run the exchange. With more members, more scale, and advances in equipment, unit (i.e. port) costs go down.

In a cost-recovery model, that means prices drop.

For exactly the same reason AMS-IX lowered its prices.

- Henk