Evolution 0.9: The Evolution of the U.S. Peering Ecosystem

1. Evolution 0.9:The Evolution of the U.S. Peering Ecosystem William B. Norton Co-Founder & Chief Technical Liaison Equinix, Inc. Gigabit Peering Forum VII Herndon, VA September 9, 2003

2. Internet Researcher • Four Years of Research • Document Internet Operations Practices – Interconnect/Peering/IXes/etc. • Research Process – Focus with Community and • Write White Paper version M.m • Walk throughs & Feedback • Fix/Update Paper • 200 Walkthroughs later – a document reflecting community Internet Operations knowledge So far 6 White Papers

3. Internet Operations White Papers • “Interconnection Strategies for ISPs” • “Internet Service Providers and Peering” • “A Business Case for Peering” • “The Art of Peering: The Peering Playbook” • “The Peering Simulation Game” • “Do ATM-based Internet Exchanges Make Sense Anymore?” Freely available. Send e-mail to wbn@equinix.com New white Paper: The Evolution of the U.S. Peering Ecosystem, Agenda…

4. Agenda The Evolution of the Internet Peering Ecosystem • The Internet Peering Ecosystem Environment • Each Player, their Motivations, their Behavior • Four Major Events, led to … • Three Major Evolutions in the Peering Ecosystem

5. The Evolution of the U.S. Peering Ecosystem Act I: 1998-2000

6. The Internet Peering Ecosystem • The Environment • The Players • Their role in the Peering Ecosystem • Their behavior in the Peering Ecosystem • Their relationship to others in the Peering Ecosystem • The Evolution of the Peering Ecosystem

7. The Internet Peering Ecosystem • Many “Internet Regions” (usually defined by geopolitical boundaries) • Each with its own Peering Ecosystem consisting of • Tier 1 ISPs • Tier 2 ISPs • Content Players and Enterprises

8. Interconnect Regions • Large Internet Regions have multiple geographical areas where ISPs peer

9. Player: Tier 1 ISPs Def: A Tier 1 ISP is an ISP that has access to the entire Regional Internet routing table solely through Peering Relationships (I.e. doesn’t buy transit from anyone).

10. Tier 1 Peering • Full Mesh Peering among Tier 1 ISPs within each Interconnect Region

11. Some Tier 1 ISPs in the U.S.

12. Tier 1 Peering Across the U.S. 8 Interconnect Regions

13. Tier 1 Peering Motivations • Generally not interested to peer with anyone else • They already get the traffic for free • They may be foregoing revenue (they could sell transit) • They don’t want to give away that which differentiates them

14. Player: Tier 2 ISP Def: A Tier 2 ISP is an ISP that purchases (and therefore resells) transit within an Internet Region.

15. Tier 2 ISP Peering Motivations • Reduce transit costs • Improve Performance • Greater control over routing

16. Tier 2 Peering • Sparse Mesh Peering in each Interconnect Region

17. Tier 2 ISPs • Widely varying characteristics and behaviors • Scope: Global, National, Regional, Local • Underfunded to well funded • Food fights to solid relationships within the community • Big Peoples Table and Little Peoples Table perhaps a bad generalization

18. The Content Provider and Enterprise Player • Always buy transit • Focus on Content • Focus on Service • Few Network Engineers • SLAs valuable

19. The Internet Peering Ecosystem

20. Peering Inclinations and Peering Policies • Def: A Peering Inclination is a predilection towards or against peering as demonstrated by Peering behavior in a Peering Ecosystem • Def: A Peering Policy documents and defines the prerequisites to peering.

21. Four types of Peering Inclination • Open Peering – Anyone, Anywhere • Selective Peering – Some Requirements • Restrictive Peering – No • No Peering – No, prefer buying transit

22. The Evolution of the U.S. Peering Ecosystem Act II: 2000-2003

23. Evolution of the U.S. Peering Ecosystem Four key events leading to drastic disruption in the Peering Ecosystem: • The 1999/2000 Telecom Collapse • The growth of the Used Equipment Market • The Upstream Provider for the Cable Companies (@Home) went bankrupt • Peer-to-Peer file sharing systems (like Kazaa) grow in popularity, traffic grows exponentially between Access Providers (1.5MB MP3  700MB AVI files) Leads to 3 Major Evolutions

24. Evolution #1 – Cable Companies are Peering • 40% of traffic Kazaa • 3-5 Gbps of transit traffic-> Gbps of peering potential ! Significant because • Volume • Open Peering • Kazaa Effect

25. U.S. Cable Companies Eyeballs

26. AOL

27. 1998-2000 Tier 1 ISPs $ Transit Tier 2 ISPs Thickness represents In-Group Peering Content

28. 2000-2003 Evolution #1 – Cable Companies Peering Tier 1 ISPs CableCos Peering Tier 2 ISPs Content

29. Evolution #2 – Network Savvy Large Scale Content Companies get into Peering • To reduce transit costs • To improve the end user experience • They need to move out of bankrupt colo anyway Significant because • Volume of traffic is huge • Content Providers have Open Peering • Leading players pave the way

30. 1998-2000 Tier 1 ISPs $ Transit Tier 2 ISPs Thickness represents In-Group Peering Content

31. 2000-2003 Evolution #2 – Large Scale Network Savvy Content Peers Tier 1 ISPs Tier 2 ISPs LSNSC Content

32. Other Broadband Players • Significant, but… • Not Open Peers so disincentive to peer • So less volume and less disruptive

33. Evolution #3 – Cable Companies Freely Peer with Content Companies • Content literally on the Cable Company Network • Lowest possible latency from content to eyeballs • Internet Gaming, Broadband Streaming, etc.

34. 1998-2000 Tier 1 ISPs $ Transit Tier 2 ISPs Thickness represents In-Group Peering Content

35. 2000-2003 Evolution #1 – Cable Companies Peering Tier 1 ISPs CableCos Tier 2 ISPs Content

36. 2000-2003 Evolution #2 – Large Scale Network Savvy Content Peers Tier 1 ISPs Tier 2 ISPs LSNSC Content

37. 2000-2003 Evolution #3 – Cable Peers with Large Scale Network Savvy Content Tier 1 ISPs CableCos Tier 2 ISPs LSNSC Content

38. International Dynamics – Separate White Paper JP U.S. U.S. Tier 1 ISPs are Tier 2 ISPs in Japan Internet Region Japan Tier 1 ISPs are Tier 2 ISPs in the U.S. Internet Region

39. 2003 Peering Ecosystem Evolving Summary Excite@Home