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

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1

The Economist's model is incomplete, however I really doubt
it could be argued that Europe subsidizes the US Internet.
A large reason the cost of international leased lines are so
high is due to protectionist tarrifs in international telecom.
I understand it is cheaper to buy a leased line from the
us to Europe than the other way around. (This at least has
been discussed on nanog before). At any rate the most
the costs differences will do is is subsidize US access to Europe.
It doesn't effect the cost of US-US internet.
Until someone invents a metric that measures Host Value,
there will be no easy way to estiablish the relative value of two
networks to each other to set up rational economic models between
providers.

Its one reason I advocate partial transit arragments and "pay for peering".
I do not advocate traffic based settlements, as the accounting
overhead is unacceptable, and the net results are usually a wash.
(Seeing as for any given random customer base, your net flows will
be equally distributed, assuming you market to different classes of
customers equally, and since bandwidth is usally only bought
symetrically it makes sense to market this way...)

I'd be happy if I could get techincal BGP peering setup with a large
national ISP, and pay based on a ratio of routable IP addresses
or some such. There are some details to work out on the costs etc,
but if Sprint has 10,000 prefixes out of 40,000, therefore cost of
partial transit should be about 25% of full transit. Obivously
this isn't the best metric for many number of reasons, but it is a
starting point for deteriming the relative value of two networks
to each other(i.e. how many customers).
There could probably be major changes to the voice network
with deregulation on local loops, etc if more rational settlements
systems were in place, but Telephone companies like to
suck money out of both ends of the pipe (To quote a former(?) FCC Chairman).

2

The Economist's model is incomplete, however I really doubt
it could be argued that Europe subsidizes the US Internet.

If someone in the UK accesses a US Web site, the European provider
pays 90% of the cost involved.

If someone in the US accesses a UK Web site, the European provider
pays 90% of the cost involved.

On our network -- someone with more comprehensive stats might want
to step forward at this point -- more Web traffic flows from the UK
to the US. That is, there is a small net flow of _benefit_ to the US
and a very large net imbalance in _costs_ to the UK.

In order to argue that there is no subsidy to the US, you have to
argue that US Web sites are somehow 'worth' much more than UK Web
sites. Us simple-minded folk just look at the invoices.

A large reason the cost of international leased lines are so
high is due to protectionist tarrifs in international telecom.

That's true. But European networks pay the _entire_ cost of moving
data across the Atlantic. If x.net is an ISP in San Jose CA and runs
a T1 to MAE West for $170 a month and y.net.uk is an ISP in London and
runs a T1 to MAE West for $40,000 a month, they are regarded by their
would-be peers as on a par -- although the costs of one are 235 times
the cost of the other. (These numbers are not imaginary.)

I understand it is cheaper to buy a leased line from the
us to Europe than the other way around.

Circuits don't have directions. Or more precisely, we buy them
in pairs: a circuit from California to London always comes with a
circuit from London to California.

To look at it another way: we have an office in San Jose, California,
and an office here in the UK. We can and do get quotes from both
countries. If there was a difference, we would just go with the
cheaper quote.

                                          (This at least has
been discussed on nanog before). At any rate the most
the costs differences will do is is subsidize US access to Europe.

This argument doesn't make any sense, but in any case you are
conceding that Europe subsidizes the US Internet.

It doesn't effect the cost of US-US internet.

It does. If the US Internet paid 50% of the costs of Atlantic traffic,
then a large sum of money would be transferred from US providers
to UK providers. (Because the costs of one would go down, and the costs
of the other would rise.)

Until someone invents a metric that measures Host Value,
there will be no easy way to estiablish the relative value of two
networks to each other to set up rational economic models between
providers.

This seems to be an attempt to introduce the notion that American Web
sites are worth ten times as much as any others -- without spelling
out a silly idea in full detail. :wink:

Having said all this, I will repeat that my main interest is in
establishing the point that the Economist's model of the Internet is
not valid. I am not crusading for a more equitable sharing of the
costs of intercontinental data circuits; that will come naturally
as time passes.

3

I have to say that Jim makes a fairly convincing case. I guess the only
way to force the issue would be for the Europeans to cut the transatlantic
links and see who blinks first. Would American NSPs start throwing cables
across the pond? I don't know.

Nonetheless, there is an argument that American networks benefit greatly
from the leverage which being in the US provides, leverage dependent
purely on the number of hosts within the States and independent of
regulation, tarriffs, etc.

I think the argument is undermined by the fact that peering in Europe is
in a fairly dismal state. Were there a MAE-{London, Paris, Prague} I
somehow think that the big five at least might throw a T3 or two over.
Until that happens, nothing will change. Maybe as access points start
springing up in Japan, the Phillipines, etc., the roadblocks to such a
cooperative project will start to be removed.

4

I think the argument is undermined by the fact that peering in Europe is
in a fairly dismal state. Were there a MAE-{London, Paris, Prague} I
somehow think that the big five at least might throw a T3 or two over.

"MAE London" is called the LINX and the T3s have been thrown over.

We peer with 30 other networks at the LINX in London, including GSL
(Sprintlink), Pipex (uu.net), and EUnet GB (AKA PSI). If you watch the
flow of cash, what happens is that first the UK company pays a fortune
to the American company for bandwidth, then the American company buys
the European company.

Someone more cynical than I might even say that the US company has used
the UK company's money to buy the UK company.

Until that happens, nothing will change. Maybe as access points start
springing up in Japan, the Phillipines, etc., the roadblocks to such a
cooperative project will start to be removed.

Things are changing. It's just going to take a while.

5

Hmm, there is exchange points (M9-IX in Moscow and SPB-IX in StPeterburg, both
FDDI-bases) even there,
in Russia. The main problem is _relationships_.

6

  > I think the argument is undermined by the fact that peering in Europe is
  > in a fairly dismal state. Were there a MAE-{London, Paris, Prague} I
  > somehow think that the big five at least might throw a T3 or two over.

  "MAE London" is called the LINX and the T3s have been thrown over.

  We peer with 30 other networks at the LINX in London, including GSL
  (Sprintlink), Pipex (uu.net), and EUnet GB (AKA PSI). If you watch the

There is interesting question - does SprintLink use this peering
for the traffic _from USA_ to _you_, or for it's UK customers only?

We have one example - there is Relcom there, and we are presented on
our M9-IX exchange point. New provider (small-small there, XXX Global
Networks, the Russian branch) asks us to make peering with them.
We asked - if this allow us to get traffic _from_ and _to_ XXX Global
via this link - _no, this will be peering with russian branch only_ was
the answer. Guess what have we answered? /it's not important what really XXX was/

7

I think the argument is undermined by the fact that peering in Europe is
in a fairly dismal state. Were there a MAE-{London, Paris, Prague} I
somehow think that the big five at least might throw a T3 or two over.
Until that happens, nothing will change. Maybe as access points start
springing up in Japan, the Phillipines, etc., the roadblocks to such a
cooperative project will start to be removed.

This deserves some explanation. Peering in Europe is actually pretty
good, with international perring points in places like Stockholm,
Amsterdam, Paris, and London.. There are lots of national IX's,
further enhancing the standard.

So what's the problem? Basically, one organisation, Ebone, which
operates a fairly large pan-European net, won't peer with others. This
means that European customers connected to non-Ebone connected
providers like Global One lack European connectivity without going
through the US. Ebone provides great connectivity at cost, but the big
US NSPs making presences in Europe naturally don't want to buy
bandwidth from someone like Ebone. We'll see what happens.

- Jakob Faarvang
cybernet.dk

8

> We peer with 30 other networks at the LINX in London, including GSL
> (Sprintlink), Pipex (uu.net), and EUnet GB (AKA PSI). If you watch the

There is interesting question - does SprintLink use this peering
for the traffic _from USA_ to _you_, or for it's UK customers only?

It appears that GSL announces all of their _European_ routes to us,
but we don't see any US SprintLink routes. (Or Asian routes, as I
recall.)

We have one example - there is Relcom there, and we are presented on
our M9-IX exchange point. New provider (small-small there, XXX Global
Networks, the Russian branch) asks us to make peering with them.
We asked - if this allow us to get traffic _from_ and _to_ XXX Global
via this link - _no, this will be peering with russian branch only_ was
the answer. Guess what have we answered? /it's not important what really XXX was/

:wink:

9

I think the argument is undermined by the fact that peering in Europe is
in a fairly dismal state. Were there a MAE-{London, Paris, Prague} I
somehow think that the big five at least might throw a T3 or two over.

Aw, come-on! LINX (London InterNet eXchange http://www.linx.org) has been
mentioned several time on this list. And Bill Manning has also several
times mentioned http://www.isi.edu/div7/ra/NAPs/ which lists exchange
points for both London and Paris and several orther European cities
(though not Prague).

This is basic knowledge here that everyone should know.

Until that happens, nothing will change. Maybe as access points start
springing up in Japan, the Phillipines, etc., the roadblocks to such a
cooperative project will start to be removed.

There are a couple of exchanges in Japan and the Phillipines people are
working on an exchange but have some political stuff to work through. I
suggest you give the above URL at ISI a thorough study. There is a BIG
world out there beyond the borders of the USA.

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