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Do ATM-based Exchange Points make sense anymore?

  • From: William B. Norton
  • Date: Wed Aug 07 19:52:08 2002

Hi all -

I've been working with a number of ISPs on a research paper that builds on the previous peering research papers (Internet Service Providers and Peering, A Business Case for Peering, The Art of Peering, Interconnection Strategies for ISPs, etc.) that applies the Peering Modelling tools in a comparison of ATM and Ethernet-based Internet Exchanges. Both of these IXes are compared against each other and against the cost of buying transit. The paper applies recent price quotes for transport and transit, costs for ATM and Ethernet-based IX participation, to answer the question:

Do ATM-based Exchange Points make sense anymore?

I'd like to speak with additional ISP Peering Coordinators and Network Architects (preferable ones that have experience with peering across both ATM and Ethenet-based IXes) to walk through this paper and help me check that I have the technical and business details right. I would need about 20 minutes or so on the phone to walk you through the paper, the financial models, the cost points, and get feedback on the conclusions...preferably sometime in the next couple weeks.

If you are a Peering Coordinator I think you will find at least a couple of findings in this research *very* interesting. In any case, if you can help, please send me an e-mail at and let me know when we could chat.

Thanks -


PS - As with any these Peering White Papers, this white paper will be freely available once enough folks have walked through it and verify that we have things right.

------------------------------------------ Abstract ---------------------------------------------------
During the NSFNET transition from the Authorized Use Policy Internet to the Commercial Internet, several Network Access Points (NAPs) were created to facilitate the traffic exchange between the Internet Service Providers, two of which were ATM-based. Internet Service Providers were initially required to connect to three of the four NAPs in order to receive NSF funds (indirectly through their NSF-sponsored customers) during this transition period.

During the years that followed, this requirement was dropped and the costs models of Internet Operation have changed dramatically. Technologies such as Wave Division Multiplexing and Long Haul Fiber Improvements have led to radical a decrease in the cost of transport and a corresponding drop in the price of transit. At the same, the cost of peering at ATM-based exchange points has not substantially dropped in cost, leading to the question in the Peering Coordinator Community:

"Do ATM-based Internet Exchange Points make sense anymore?"

In this paper we apply the peering financial models to this question, using current market prices to compare the price of transit against the costs of peering at ATM-based NAPs and Ethernet-based Internet Exchange Points. We build upon the previous research on Peering by introducing the notion of an Effective Peering Range (EPR) to describe the "useful life" of an Internet Exchange. We also highlight a potentially costly EPR Gap, an interim range between Peering Capacity points where peering is more expensive than transit.

The financial models presented that produced the graphs are included in the Appendix so that ISPs can apply these cost models to their specific situation.

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