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Re: Do ATM-based Exchange Points make sense anymore?
- From: Nenad Trifunovic
- Date: Fri Aug 09 16:09:07 2002
Can you, please, explain why you didn't consider Frame Relay
based exchange in your analysis?
>Date: Thu, 08 Aug 2002 08:11 -0700 (PDT)
>From: "William B. Norton" <email@example.com>
>Subject: Re: Do ATM-based Exchange Points make sense anymore?
>Hi again -
>A couple points (based on some interactions with folks privately).
>This is not an ATM is bad, or general ATM-bashing paper. It simply applies
>the same Peering Analysis that ISPs are applying to determine if and when
>IXes make sense. With the transit prices and transport prices dropping,
>this is a reasonable question, worthy of greater analysis than "well, ATM
>is expensive so ATM is bad."
>To give you a flavor, given a set of assumptions, OC-3 (155Mbps) transport
>into an ATM-based IX has an "Effective Peering Range" (where peering across
>them is cheaper than transit) of 75-90Mbps, while given the same
>assumptions, Fast Ethernet-based IXes also at OC-3 have an Effective
>Peering Range of 40-70Mbps. The "Minimum Cost of Traffic Exchange" for this
>ATM solution is $122/Mbps while FastE is $80/Mbps.
>At higher capacity the interconnect analysis is more dramatic: Given the
>relatively high price point of transport and port cost, the Effective
>Peering Range for ATM/OC-12 Peering is a narrow 236Mbps to 375Mbps with a
>Minimum Cost of Traffic Exchange of $69/Mbps. The GigE/OC-12 equivalent
>range is 109Mbps-466Mbps with a Minimum Cost of Traffic Exchange of $25/Mbps.
>What was unexpected in this analysis was the Effective Peering Range Gap.
>When an ISP upgrades the ATM OC-3 to OC-12, the gap between the Effective
>Peering Bandwidth of the OC-3 (90Mbps) and the Peering Breakeven Point (the
>point at which the Peering Costs are totally offset by the cost savings of
>peering vs. transit) at 208Mbps is huge. This 118Mbps gap is where an ISP
>should rationally prefer to purchase transit until 208Mbps can be sent in
>peering relationships over the ATM fabric, and only then upgrade the
>peering connection to OC-12!
>There is also an Ethernet EPR Gap but it is only about 40 Mbps, and once at
>the GigE/OC-12 capacity, it gets you an Effective Peering Range up to 475Mbps.
>In any case, this is the analysis that the paper walks through, and since
>the spreadsheets are in the paper, one can muck around with the assumptions
>and cost points, key of which are:
> 1) ATM OC-3 Port Cost $8000/mo, ATM OC-3 Circuit Cost $3000/mo,
> ATM OC-12 Port Cost $17000/mo, ATM OC-12 Circuit Cost $8000/mo
> 2) FastE Port & Rack Space $2500/mo, OC-3 Circuit $3500/mo,
> GigE Port & Rack Price$5000/mo, OC-12 Circuit $7000/mo
> 3) Transit Price: if you peer at OC-3, you probably pay $125/Mbps,
>peer at OC-12,$110/Mbps
> 4) ATM Overhead (aka cell tax): 20%
> 5) Assumption that ISP upgrade capacity when avg utilization >75%
>Effective Peering BW
>Let me know if you violently object to any of these data points. These are
>culled from a lot of conversations in the field. The rest of the paper is
>simply plugging these data points into the equations and analyzing the results.
>At 04:36 PM 8/7/2002 -0700, William B. Norton wrote:
>>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 firstname.lastname@example.org and let me know when we
>>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.
>>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
>>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
>William B. Norton <email@example.com> 650.315.8635
>Co-Founder and Chief Technical Liaison Equinix, Inc.
>Yahoo Instant Messenger ID: WilliamBNorton