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Generation of traffic in "settled" peering arrangement
- From: John Curran
- Date: Tue Aug 25 14:57:06 1998
At 08:47 PM 08/21/1998 -0700, Mike Leber wrote:
>And any suitably informed party to a peering arrangement like this can
>simply offer free hosting to search engine crawlers until they are
>extracting the desired amount cash from their peer via settlements.
Think very carefully about what happens as traffic increases...
Given that the context is the introduction of "settlement-based" peering
for traffic imbalance in a shortest-exit world, then all of the various
schemes for generation of traffic (web crawlers, backup services, etc)
are no problem whatsoever, and may actually been seen as desirable...
Imagine a nationwide Internet provider with customer A on the west
coast and customer B on the east coast. Customer B sends queries
to customer A's server, and receives quite a bit of data in return.
(all of this traffic stays on the provider's backbone in this case)
Presume for the moment that the provider charges the customers (A&B)
on a usage-basis which takes both sending and received traffic levels
into consideration. Now, one could charge each of A and B the full
cost of the traffic exchanged (which would effectively be "double
dipping" and quite profitable :-) but a competitive market makes it
far more likely that the rate per traffic measure will be such that
A & B together pay the costs associated with their traffic exchange
Now, given that A & B are both on the provider's network, everything
is fine. When we hypothesize that A is instead connected to a peer
network, we don't know whether costs will be recovered. In a shortest-
exit world, traffic is quickly exchanged to the original provider's
network and hence the costs of transmission to B are almost identical
to the case where the A was a customer. Given that there's only one
customer (B) now paying for these costs, this presents a potential
problem. Customer B expects to pay their fair share of the costs,
but doesn't expect to pay a larger portion of the total costs simply
because A is connected to another provider.
The truth is, there is actually nothing wrong with this situation if
the traffic to/from the peer is of the same order of magnitude. To
elaborate: a peer provides traffic which must be carried without
corresponding sender-side revenue. On the other hand, the peer also
allows the Internet provider to provide a similar level of sender-paid
traffic which (by nature of being handed off) has very little actual
transmission costs. This is why typical peers are overall neutral
to cost recovery, and why peers which send far more traffic than
received are problematic.
There are a few options that have been mentioned to this situation,
including the "receiver pays full freight / sending is free" model,
the use of something other than shortest-exit routing, and introduction
of settlements for such traffic. For purposes of this thread, we're
trying to determine if the settlement approach is doomed to failure
due to ability to generate additional traffic flows through innovation.
Presuming that a peer which is a net exporter of traffic begins to
address this by encouraging additional traffic from customers to its
network, this would result in more sender-paid originating traffic
which quickly moves to the peer. Such traffic is (as noted above)
quite profitable, as it includes full cost recover but little actual
costs due to shortest to the peer. This is actually good for
both networks, and us back to an Internet where more traffic is
considered a good thing by ISP's at both ends of the connection.
p.s. The fact that the sender of traffic should be paying some portion
of the resulting costs is not a surprise to anyone; many of the
content companies that I've spoken to believe they already are
paying more as traffic increases, and were quite surprised to
find that it doesn't actually make it to the networks which
bear the brunt of the traffic carriage.
p.p.s. As noted, departure from shortest-exit is also another approach
which may provide some answers to this situation, but that's a
different topic which deserves its own thread. This message
is simply noting that settling for peering traffic is quite
viable, despite assertions to the contrary regarding traffic
generation. As long as you're billing the senders on your
network for increased usage (and handing it off shortest-exit),
increased traffic is good thing.