Provider credibility - does it matter? was Re: Inter-provider relations

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1

Any provider that does not recognize the value of bilateral, no-settlement
peering anywhere that its cost-effective for both parties (ie: if you have
traffic destined for me, get it on MY network where I'm being paid to
carry it and let ME figure the rest out!) deserves what they get.

Zero-settlement peerings open to anyone are demonstrably amount to
subsidies from large peers to small.

Absolutely correct: can I direct you to two of our articles on the subject
(and a useful graphic):
http://www.economist.com/issue/19-10-96/ld4401.html
http://www.economist.com/issue/19-10-96/sf0774.html
http://www.economist.com/issue/19-10-96/sf1.gif

Zero-settlements work only when peers are of comparable size.
Any attempt to extort pressure to force it upon anyone simply
causes large folks to flee.

That's true: in a conversation with Phil Lawlor (CEO of AGIS), he told me
that one of his customers ISPs, who was also peering with AGIS at the
Mae-E, indulged in "bandwidth stealing" by receiving their Usenet news feed
across Mae-E rather than as an AGIS customer across the few T-1s they had
to AGIS.

Surely a hierarchy which implements the rule you outline above works:
a pair of small regional ISPs may want to peer regionally for good reason,
because they are the same size there isn't much inequity in this
relationship. Two large ISPs may wish to do the same. However, a small ISP
who wants its traffic carried by a large ISP (i.e. peer with them) may have
little choice but to pay for this traffic to be carried: so becomes a
customer.

That way you have a hierarchy as follows:

Bacbkbone providers who may peer with each other
Large regional providers who are customers of the backbone providers (so by
DS-3s or whatever from BBNplanet, UUnet) and who may peer regionally. While
also present at bix exchanges, they are unlikely to peer with the big
six/seven/eight but may well peer with foreign ISPs at those exchanges.

Azeem

Azeem Azhar vx: 0171-830 7133
The Economist fx: 0171-839 2968
25 St James's Street London SW1A 1HG

2

  >
  >Zero-settlement peerings open to anyone are demonstrably amount to
  >subsidies from large peers to small.

  Absolutely correct: can I direct you to two of our articles on the subject
  (and a useful graphic):
  http://www.economist.com/issue/19-10-96/ld4401.html
  http://www.economist.com/issue/19-10-96/sf0774.html
  http://www.economist.com/issue/19-10-96/sf1.gif

Correct in case if ISP are working in the same country.

But what's about our case (ISP in Russia and ISP in USA)?
You understand (I hope) there is no one ISP there having
70 POP's over Russia, and (moreover) in USA.

// You can change _Russia_ to any other name, it's not important. Let's be Argentina.

3

>>Any provider that does not recognize the value of bilateral, no-settlement
>>peering anywhere that its cost-effective for both parties (ie: if you have
>>traffic destined for me, get it on MY network where I'm being paid to
>>carry it and let ME figure the rest out!) deserves what they get.
>
>Zero-settlement peerings open to anyone are demonstrably amount to
>subsidies from large peers to small.

Absolutely correct: can I direct you to two of our articles on the subject
(and a useful graphic):
http://www.economist.com/issue/19-10-96/ld4401.html
http://www.economist.com/issue/19-10-96/sf0774.html
http://www.economist.com/issue/19-10-96/sf1.gif

Not at all necessarily correct. We are a UK backbone provider. We carry
much of our traffic 6000 miles to California over very expensive Atlantic
circuits, where we pass it off to American providers, who use very cheap
and much shorter US links. We ship about 5% more traffic to the USA than
we get back. So on balance we are subsidizing the US Internet:

* we pay more to carry the packets
* we give more than we receive

The Internet is more complicated than the Economist's model of the Internet.

That's true: in a conversation with Phil Lawlor (CEO of AGIS), he told me
that one of his customers ISPs, who was also peering with AGIS at the
Mae-E, indulged in "bandwidth stealing" by receiving their Usenet news feed
across Mae-E rather than as an AGIS customer across the few T-1s they had
to AGIS.

There is some extremely strange logic here. Exactly how is any Agis
bandwidth being stolen if a customer chooses to get a newsfeed from a
third party over MAE East?

That way you have a hierarchy as follows:

Bacbkbone providers who may peer with each other
Large regional providers who are customers of the backbone providers (so by
DS-3s or whatever from BBNplanet, UUnet) and who may peer regionally. While
also present at bix exchanges, they are unlikely to peer with the big
six/seven/eight but may well peer with foreign ISPs at those exchanges.

This is the model of the world preferred by the big US providers -- and by
those who don't want the headaches that come from trying to build a more
realistic model of the Internet.

4

Not at all necessarily correct. We are a UK backbone provider. We carry
   much of our traffic 6000 miles to California over very expensive Atlantic
   circuits, where we pass it off to American providers, who use very cheap
   and much shorter US links. We ship about 5% more traffic to the USA than
   we get back. So on balance we are subsidizing the US Internet:

   * we pay more to carry the packets
   * we give more than we receive

Before you go making statements like that, please answer the following
questions:

1) How many US ISP's customers would notice if vbc.net fell off the
net?

2) How many of vbc.net's customers would notice if the USA fell off
the net?

You're welcome to stop subsidizing the US Internet any time you
please. And be sure to put a note in your trouble ticket system
reminding your customers not to let the doorknob hit them in the ass
on the way out the door...

If I live more than a mile and a half or so from a central office,
installation of a T1 will require a special engineering fee. Unlike
you, I'm not cheeky enough to assert that my unfortunate location
represents a subsidy to the US Internet.

                                        ---Rob

5

There is a name for this ridiculous style of argument, but I don't
remember it ...

Let's recast the questions:

1. How many UK ISPs would notice if seastrom.com fell off the Net?
2. How many of seastrom's customers would notice if Europe fell off
    the Net?

Your questions don't address the issues at all. They may make you
feel better.

A large part of our Atlantic traffic (most, I believe) is US users
accessing our customers' (eg the BBC, you may have heard of them) or
our customers' customers' Web sites (eg www.bullfrog.co.uk). As I
said, US networks pay pennies to carry traffic to us, and we pay at
least ten times as much to carry the packets across the Atlantic. We
carry our packets, and we carry packets for US networks. We pay at
least 90% of the carrying costs.

Europe heavily subsidizes the US Internet. It's not just VBCnet: the
European Internet community pays something like 90% of the costs of
traffic between Europe and North America. The same applies to the
rest of the world.

If you paid attention to the discussion at hand, you might notice
that I was criticizing the Economist's model of the Internet. One
of the things wrong with that model was their failure to notice the
huge subsidy that the rest of the world pays to the US Internet.
There are a lot of other things wrong with the model. Poor models
make for poor reasoning, just like talking without listening makes
for a poor dialog.

6

> 1) How many US ISP's customers would notice if vbc.net fell off the
> net?
>
> 2) How many of vbc.net's customers would notice if the USA fell off
> the net?

There is a name for this ridiculous style of argument, but I don't
remember it ...

Xenophobia. Look it up.

Europe heavily subsidizes the US Internet. It's not just VBCnet: the
European Internet community pays something like 90% of the costs of
traffic between Europe and North America. The same applies to the
rest of the world.

I would say that if transatlantic lines are mostly ordered and paid for by
European companies that you are probably correct. But part of the reason
is that European government run PTT's charge horrendously high rates for
international circuits.

Remember when Europe's economy was subsidized heavily by its colonies?
The Internet is a similar colonial economy and it can't last forever.

Michael Dillon - ISP & Internet Consulting
Memra Software Inc. - Fax: +1-604-546-3049
http://www.memra.com - E-mail: michael@memra.com

7

There is a name for this ridiculous style of argument, but I don't
   remember it ...

The names that come immediately to mind are "capitalism", "what's in
it for me" and "TANSTAAFL". Also "reality".

   Let's recast the questions:

   1. How many UK ISPs would notice if seastrom.com fell off the Net?

That's largely irrelevant -- I'm not asking you to peer with my home
network and transport my traffic at no charge.

   2. How many of seastrom's customers would notice if Europe fell off
       the Net?

Not many.

   Europe heavily subsidizes the US Internet. It's not just VBCnet: the
   European Internet community pays something like 90% of the costs of
   traffic between Europe and North America. The same applies to the
   rest of the world.

So, what you're saying is that US Internet users should be helping to
subsidize your socialist Government-monopoly telephone companies that
charge you several times what a line is worth. And we should do this
simply because YOU choose to do business in a country that supports a
sub-optimal economic model. I'm sorry, but I don't play that game.

Have you ever considered that you might have a lot less bandwidth cost
to the States if (as Jeremy Porter pointed out) the costs to run a
line intra-Europe reflected the REAL COST of doing so instead of being
government-sanctioned overcharging.

To get the who's-subsidizing-whom argument correct, perhaps you might
want to consider that the competitive environment in the US is
subsidizing your trans-Eurpoean connectivity.

   Poor models
   make for poor reasoning, just like talking without listening makes
   for a poor dialog.

The thing that makes for the worst dialog is when you try to advance
an untenable position. There will always be a cost of doing business
for your company -- if you feel that the current model is unfair, you
can (a) lobby your government to completely privatize the telecom
infrastructure and deregulate it opening it up to competition, (b)
move your operation to more friendly territory, or (c) go out of
business. But don't give us this "Europe is subsidizing US
infrastructure" dreck.

                                        ---Rob

8

   2. How many of seastrom's customers would notice if Europe fell off
       the Net?

Not many.

Sure sounds like xenophobia.

   Europe heavily subsidizes the US Internet. It's not just VBCnet: the
   European Internet community pays something like 90% of the costs of
   traffic between Europe and North America. The same applies to the
   rest of the world.

So, what you're saying is that US Internet users should be helping to
subsidize your socialist Government-monopoly telephone companies that
charge you several times what a line is worth.

Yep, definitely xenophobia. It would be wise for Americans who wish to
comment upon other country's telecom systems to learn something about them
first. I'm sure that Mercury in the UK would be surprised to hear that an
American considers them to be a socialist Government-monopoly telephone
company. And I'm sure that the UK's Conservative Prime Minister John
Major, who took over from Conservative Prime Minister Margaret Thatcher,
would be surprised to hear that the UK has a socialist government.

Europe may be a few years behind the USA in deregulating
telecommunications but they are definitely marching down that road.

Have you ever considered that you might have a lot less bandwidth cost
to the States if (as Jeremy Porter pointed out) the costs to run a
line intra-Europe reflected the REAL COST of doing so instead of being
government-sanctioned overcharging.

Are you so sure that the cost of telecommunications in the USA reflects
real costs? Overinflated telecom charges are just as real in the USA as
elsewhere.

The thing that makes for the worst dialog is when you try to advance
an untenable position. There will always be a cost of doing business
for your company -- if you feel that the current model is unfair, you
can (a) lobby your government to completely privatize the telecom
infrastructure and deregulate it opening it up to competition, (b)
move your operation to more friendly territory, or (c) go out of
business. But don't give us this "Europe is subsidizing US
infrastructure" dreck.

Typical xenophobic ranting. You should hear what xenophobic Europeans have
to say about the ugly American.

Just because a country has some dirt under its covers doesn't make it
right for you to paint all of its citizens with the same brush.

Michael Dillon - ISP & Internet Consulting
Memra Software Inc. - Fax: +1-604-546-3049
http://www.memra.com - E-mail: michael@memra.com

9

> There is a name for this ridiculous style of argument, but I don't
> remember it ...

Xenophobia. Look it up.

Ah, yes, that's it :wink:

> Europe heavily subsidizes the US Internet. It's not just VBCnet: the
> European Internet community pays something like 90% of the costs of
> traffic between Europe and North America. The same applies to the
> rest of the world.

I would say that if transatlantic lines are mostly ordered and paid for by
European companies that you are probably correct. But part of the reason
is that European government run PTT's charge horrendously high rates for
international circuits.

European ISPs routinely put in (very expensive) lines to other European
countries and the USA. We have a line to California, and are just now
putting in circuits to Stockholm, Amsterdam, and Virginia. This is just
normal; we peer with two German networks and one Dutch network in London,
where they have run lines over to the UK.

On the other hand I have not seen any US regional ISP put in a line to
Europe. The few US ISPs (Sprint, UUnet, PSI) that do have lines to Europe
use them to sell bandwidth to the States.

Remember when Europe's economy was subsidized heavily by its colonies?
The Internet is a similar colonial economy and it can't last forever.

Precisely.

10

     Let's recast the questions:

     1. How many UK ISPs would notice if seastrom.com fell off the Net?

  That's largely irrelevant -- I'm not asking you to peer with my home
  network and transport my traffic at no charge.

     2. How many of seastrom's customers would notice if Europe fell off
         the Net?

  Not many.

Bad example. But the correct answer is almost the same:

1) In case if INTERNET split into US and EUrope parts withouth interconnection,
no too many in USA will notice it, but INTERNET in Europe will die
(moreover, computer's world will die too).

This explains why we (EUrope) pay for the inter-ocean links. It's reality.

And - YES, European's PTT is the worst example of the SOCIALISM.

Then it's became unlimited loop - IP in USA cost less because EUrope pay for it;
that's why interesting services tends to locate in USA, that's why Europe
have to pay for the links, that's why new servers are allocated in USA
where the cost of Internet is less, and so on... -:slight_smile:

11

   Europe heavily subsidizes the US Internet. It's not just VBCnet: the
   European Internet community pays something like 90% of the costs of
   traffic between Europe and North America. The same applies to the
   rest of the world.
...
Have you ever considered that you might have a lot less bandwidth cost
to the States if (as Jeremy Porter pointed out) the costs to run a
line intra-Europe reflected the REAL COST of doing so instead of being
government-sanctioned overcharging.

The number of logical hops here is a little large. The costs of doing
business in Europe <yawn> do include high telecomms costs between
European countries. These are (a) falling and (b) shared more or less
equitably among European providers. But costs for circuits across the
Atlantic are (a) borne almost entirely by European networks and (b) have
nothing much to do with intra-European costs.

It doesn't cost much to run fiber across a border but it costs real
money to lay several thousand miles of cable. Think about it.

I am not on some sort of crusade; this is not a stable arrangement and
won't last. Benefits flow both ways; in time the costs will come to
more or less match the benefits. Not because I say yes or you say no
but because the market will adjust itself.

business. But don't give us this "Europe is subsidizing US
infrastructure" dreck.

Oh, lighten up.

As I said, my main point was that the Economist's model was seriously
flawed.

I am an American doing business in both the States and Europe, not a
socialism-loving American-flag-burning Limey. :wink:

I can see how the system currently works, and I know it's not going to last.

12

1) In case if INTERNET split into US and EUrope parts withouth interconnection,
no too many in USA will notice it, but INTERNET in Europe will die
(moreover, computer's world will die too).

Don't you believe it. Over the last year we have seen a steady downward
drift in the percentage of our traffic which goes to the US -- a 20%
change over the last year, I think.

This explains why we (EUrope) pay for the inter-ocean links. It's reality.

No, it's inertia more than anything else.

And - YES, European's PTT is the worst example of the SOCIALISM.

Can't disagree with that, though :wink:

Then it's became unlimited loop - IP in USA cost less because EUrope pay for it;
that's why interesting services tends to locate in USA, that's why Europe
have to pay for the links, that's why new servers are allocated in USA
where the cost of Internet is less, and so on... -:slight_smile:

If you look at the commercial realities, most UK companies putting up
Web sites are looking for customers in the UK. We are seeing more and
more companies who are actually looking for customers in their own
region: Bristol companies looking for Bristol customers, not UK
customers, certainly not American customers. This is the way that we
see the Net evolving: more and more traffic will be local.

I think that you are talking more about Eastern Europe, which is several
years behind.

13

  > 1) In case if INTERNET split into US and EUrope parts withouth interconnection,
  > no too many in USA will notice it, but INTERNET in Europe will die
  > (moreover, computer's world will die too).

  Don't you believe it. Over the last year we have seen a steady downward

It was a joke, but unfortunately thete is the piece of the truth in it.

  drift in the percentage of our traffic which goes to the US -- a 20%
  change over the last year, I think.

May be, but I have the other examples (there, in Russia, and in some
european ISP) - the traffic _from USA is about 200% of the traffic _to USA.

  > This explains why we (EUrope) pay for the inter-ocean links. It's reality.
  No, it's inertia more than anything else.

It the dreams only while...

  > Then it's became unlimited loop - IP in USA cost less because EUrope pay for it;
  > that's why interesting services tends to locate in USA, that's why Europe
  > have to pay for the links, that's why new servers are allocated in USA
  > where the cost of Internet is less, and so on... -:slight_smile:

  If you look at the commercial realities, most UK companies putting up
  Web sites are looking for customers in the UK. We are seeing more and
  more companies who are actually looking for customers in their own
  region: Bristol companies looking for Bristol customers, not UK
  customers, certainly not American customers. This is the way that we
  see the Net evolving: more and more traffic will be local.

Yes, there we have about 2:1 ratio of Local and International traffics,
including _news_ etc.

But - what do you search in the WWW network? Weather - local is in your
network, world - in USA. CNN - go to USA. CIO (Cisco) Online - USA.
And so on...

May be UK is some exception due to English language, I do not know.

  I think that you are talking more about Eastern Europe, which is several
  years behind.

You are right - everithing discussed there is actual for Eastern Europe
more than for you.