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Economic Differences Between Transit and Peering Exchanges Keith Mitchell Chief Technical Officer

This article explores the evolving interconnect market, optimal transit arrangements, differentiation between Internet Peering Points (IPP) and Internet Transit Points (ITP), and ways to facilitate transit and peering. It also discusses the advantages of ITPs and IXP neutrality principles.

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Economic Differences Between Transit and Peering Exchanges Keith Mitchell Chief Technical Officer

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  1. Economic Differences Between Transit and Peering Exchanges Keith Mitchell Chief Technical Officer NANOG 25 10th June 2002

  2. Definitions • IXP ( = IPP + ITP) • Internet eXchange Point • IPP • Internet Peering Point • ITP • Internet Transit Point

  3. The Evolving Interconnect Market

  4. Evolution of Peering and Transit • Paid peering • fixed connection fee • fixed recurring charge • Settlement-based peering • Partial routing based transit • Short-term transit contracts • demand exists • Changing degrees of multi-homing • Decline of bandwidth brokers • Emerging transit aggregators

  5. What Are Optimal Transit Arrangements ? • How many transit providers ? • 1 is not resilient enough • 4 is probably too complex • use bandwidth brokers or transit aggregators ? • Do they have a stable future ? • How to avoid getting locked in to high prices ? • How easy is it to change providers ? • Best insurance is to be able to have flexible interconnect arrangements with choice of providers

  6. IPP vs ITP Differentiation • Traditional IPPs do not offer SLAs • Supporting an SLA is however a pre-requisite for most transit sales • Some traditional IPPs (e.g. in Europe) explicitly prohibit transit • enforcement and rationale unclear ! • Bandwidth brokers are not the same as ITPs • ITP acts as facilitator, not principal • There is quality as well as price differentiation between transit providers, it is not a commodity

  7. Ways to Facilitate Transit AND Peering • Ensure contact details for all participants available • Publish peering policy information • Publish Transit commercial terms • Transit Quotation/Peering request facility • via standardised e-mail contacts or web form • Connectivity comparison tools • e.g. “Collector”, “Accumulator” routers • number of routes, IXPs, peers per participant • LookingGlass-type queries, statistics, graphs

  8. Advantages of ITPs • Easy to compare similar offerings from different providers • Easy sales lead generation for suppliers • Peer pressure on suppliers to provide best deals and service • Encourages differentiation of offerings • Direct revenue generation from IXP’s services • Potentially sell transit this way to corporate/enterprise as well as ISPs

  9. IXP Neutrality Principles • Do not move traffic between cities or countries • Do not make exclusive arrangements with: • ISPs • Carriers • CoLo Providers • Do not provide IP transit routing • Do not take share of ISPs’ transit revenues • Do not act as principal in commercial agreements between customers

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