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Re: peering charges?

  • From: Paul J. Zawada
  • Date: Mon Jan 27 14:04:44 1997

At 09:52 AM 1/27/97 -0800, you wrote:
>> [...] say your MCI and you have a smaller provider that wants to peer with
>> you, you had rather have them buy a pipe than let the peer and ride your
>> network for free.  It's all about market share, plain and simple.
>
>That's the conventional thinking.  (I won't say "conventional wisdom" since
>this is not a wise practice.)  The trouble with this is called the Sherman
>Act, which has a provision for something like "collusion in restraint of
>trade."  I'm not pointing at MCI -- I have no idea whether they have ever
>thought as you ascribed above.  But in your example, MCI does not know who
>the nonpeer will ultimately buy transit from -- all it knows is that if MCI
>refuses to peer, the nonpeer will have to buy transit from someone who *does*
>peer with MCI.  If reasonable suspicion can be raised that this is occurring,
>then everybody in the "first tier" peering club can be investigated by the
>feds.
>
>This isn't a "big" deal, Microsoft has been investigated by the feds and
>they're still in business.  In fact, it didn't even hurt their reputation,
>let alone their bottom line.  When the big nets started demanding private
>peering and refusing to peer with little guys, I had to just shrug and think,
>"well, they are now big enough that they do not fear gov't intervention."

While I agree with 99.999% of what Paul is saying, I'd like to point out
that whether or not the Government presses a case (and utimately wins or
loses it) against a giant corporation has little to do with the actual
infractions involved.  Ultimately what matters is a complex web of ego, the
desire to make money, and politics.  The fact that a group of major
carriers are doing such-and-such won't cause the DoJ to investigate.  The
fact that it totally pisses off one or more of the correct people will.
Once that happens, the fate the companies involved is based on such a
complicated interplay of the components of the forementioned web, it is
impossible to predict ahead of time what the ultimate outcome will be.  

--zawada

    
Paul J. Zawada, RCDD     | Senior Network Engineer
zawada@ncsa.uiuc.edu     | National Center for Supercomputing Applications
+1 217 244 4728          | http://www.ncsa.uiuc.edu/People/zawada
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