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Re: Sprint peering policy

  • From: Joseph T. Klein
  • Date: Sat Jun 29 03:54:37 2002

Mike alludes to something here that is not often discussed.

It can be argued that some conditions exists where a traditional backbone
provider gets an economic value from peering, especially with large broadband
providers. A broadband provider who takes a "hell no, I won't buy" attitude
with a large tier 1 can drive Gigabits of traffic away from the tier 1's
revenue stream by peering around that provider and directing traffic down
paths that avoid the tier 1.

If the large tier 1 peers and demands high traffic levels, the tier 1
then moves more traffic through revenue producing pipes. This gives
the tier 1 more cash.

I have seen data that seems to indicate that the major Cable and DSL
providers - if you subtract the flows that cross the tier 1s - haul a
significant percentage of the traffic ... a percentage that is growing
faster than the traditional B2B tier 1s due to explotion of P2P traffic.

It also seems to me that tier 1s that try to get revenue from hosting
and data centers ends up shooting themselves in the foot when they
refuse to peer with broadband providers. They get paid by people who
want good connectivity. Big web customer wants the guy at the end of
the broadband connection to have a good experience. Tier 1, by depeering
or not peering is keeping paying clients from have an optimized network
environment. The smart customers start checking out alternatives
where they are not blocked from optimum network performance
by the policies of a peer unfriendly tier 1 hosting company.

Vijay is correct that the peering is based on both parties perceived
value. IMHO - Some of the tier 1 highly over value themselves (in terms
of network importance) to the detriment of those tier 1s' customers and
cashflow.

Demanding traffic levels, geographical diversity, x size backbone and
a 24x7 NOC as conditions for peering is not unreasonable.

Demands for large aggrigated route table size without a consideration
of traffic as a condition seems to me to be an exclusionary policy
of the type that attracts regulation and reduces revenue.

I admit to being corrupted by my prospective ... ;-)

BTW

Bill Norton's peering strategy paper gives some excellent guidence for
inflicting "pain" on non peers.

--On Friday, 28 June 2002 22:31 -0700 Mike Leber <mleber@he.net> wrote:


On 29 Jun 2002, Vijay Gill wrote:
Mike Leber <mleber@he.net> writes:

> Sprint's peers aren't equal to Sprint or each other when considered by
> revenue, profitability, number of customers, or geographical coverage.

A good proxy for the above is to ask the question:

 Do X and Y feel they derive equal value (for some value of equal) by
 interconnecting with each other?
This incorrectly presumes that being equal is necessary, when in truth
each party is going to have a threshold and method for determining the
value of the exchange that is independent of the other parties
preconceptions.

Point in case, most networks care significantly more about what they get
out of a peering session than what the their peers get out of it.  And
this is correct and valid because only by paying attention to the actual
underlying economic reasons for making peering decisions will they be able
to ensure they stay in business.

 If they think they do, then an interconnection is set up between X
 and Y. However, if one party feels that they do NOT derive equal
 value by interconnecting with the other, than that party usually
 balks.
By your reasoning all ventures should be 50/50 partnerships, which they
aren't.

I'll concede if a network were to percieve themselves as a majority share
holder and think themselves large enough to effect the underlying price of
bandwidth in the market then they might focus primarily on how to prevent
another network from making more money than them from a peering agreement,
as you describe.  However, based on all the bankruptcies they should be
more focused on their own immediate operational costs and staying in
business than worrying about any single competitor.

 X states that they would only feel equal value is derived by both
 parties if traffic between X and the other party is n mb/s with a
 ratio of p:q.  Y disagrees. They do not interconnect. This causes
 pain.
Again, this is proof of my first point above, that each network has its
own method of evaluating peering and that their method matters more to
them than what the peer thinks.

> to make sense of their peering policy, just accept the fact that each
> company has policies that they believe to be in their best interests and
> omit the pretense of justifying this by the movement of heavenly bodies in
> the spheres.

I think we are in agreement here.
I figured, I just couldn't let you get away with the equal remark lest
onlookers pickup bad attitudes.  :-P

Mike.

+------------------- H U R R I C A N E - E L E C T R I C -------------------+
| Mike Leber             Direct Internet Connections     Voice 510 580 4100 |
| Hurricane Electric       Web Hosting  Colocation         Fax 510 580 4151 |
| mleber@he.net                                           http://www.he.net |
+---------------------------------------------------------------------------+





--
Joseph T. Klein                                         jtk@titania.net

   "Why do you continue to use that old Usenet style signature?"
                                                               -- anon

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