Policy routing

The only feasible solution that I've been able to come
up with is to stick customer X directly on the router
that peers with NSP-A and employ the use of policy
routing, which would enable me to set the next hop for
company X's traffic to the peering address on NSP-A.

Our NSP-A peering router is a Cisco 12016, running IOS
12.0(16)S2 and it has 256MB of DRAM.

Additionally, it is configured with NetFlow and dCEF

I've never employed policy routing in this type of
environment and I am concerned about the overhead that
it might place on the router or on the traffic
traversing the interface.

We have found that at least one version of IOS (12.0(18)S) will policy route more than you expect. When running tests in our QA lab we found that this version with policy routing and dCEF would redirect packets NOT permitted in the acl. I suggest you check your netflow records to make sure that policy routing works correctly on your version.

-Hank Nussbacher
Wanwall Ltd.