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The Changing Peering Environment

The Changing Peering Environment. Keith Mitchell keith@linx.net Executive Chairman, London Internet Exchange Internet Peering 3rd December 1998. Overview. Trends Is the market consolidating ? Peering & Settlement Experiences at LINX Competition. Some Trends. Growth in IXP numbers:

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The Changing Peering Environment

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  1. The ChangingPeering Environment Keith Mitchell keith@linx.net Executive Chairman, London Internet Exchange Internet Peering 3rd December 1998

  2. Overview • Trends • Is the market consolidating ? • Peering & Settlement • Experiences at LINX • Competition

  3. Some Trends • Growth in IXP numbers: • handful in 1993 • over 100 end 1998 • distribution typical (~50% in US) • more “local” exchanges “IXP” = Internet eXchange Point

  4. Growth in ISP Numbers

  5. Growth in ISPMembership of IXPs

  6. Growth in IXP Traffic

  7. Telephony Tariff Trends • Much retail voice telephony traffic is becoming “too cheap to meter” • e.g. • inclusive minutes • Internet telephony • national “L” rate 0845 in UK • free local call regime standing up to Internet dial-up demands in US

  8. Tariff Convergence • Trend is not simply of voice settlement model being adopted by Internet • Evidence that as bandwidth demands increase, it is not always economic or practical to count every last bit

  9. Has the ISP market Consolidated ? • A few very big playersmerging mergingmerging • Medium players getting larger • Total number of ISPs is staying constant • So there must be new entrants

  10. Is the ISP market Consolidating ? • New players are seeing market opportunities: • due to new technologies • in particular market segments • Is this different from other industries ?

  11. Will the ISP market Consolidate ? • Biggest difference from other industries is issue of “capture” • Key emergent resources and technologies need protection from vested interest control • Stifling competition stifles innovation • Key is strong regulation of potential capturing monopolies • e.g. Microsoft, NSI

  12. Settlement & Competition • Non-settlement exchange can inhibit competition by preventing peering where there is no other basis for agreement • Settlement exchange can inhibit competition by encouraging revenue flow from small to large players

  13. IXPs & Competition • Exchange point andco-location facilities promote fair competition: • reduce supplier lock-in • lower barriers to entry • increase transparency

  14. UK State of Play • Most peering via LINX • majority of members do peer (~80%) • disputes unusual • Some smaller players via2 regional exchanges • Limited (<10) private bi-lateral peerings • Lots of settlement-based bi-lateral wholesale/transit

  15. LINX Background • LINX is UK nationalInternet Exchange Point • Represents 60 largest UK++ ISPs • Tries to encourage open peering and competition between ISPs • Promotes self-regulation (e.g IWF), but is not “regulator”

  16. LINX Peering Environment • Published & well-defined membership criteria • Minimum of interference in member peering autonomy • Peering agreements private matter between members • Incentives to peer

  17. LINX Peering Practice (1) • Members must peer with at least: • one other member • LINX routers • In order to: • to acquire voting rights • to remain member after 3 months

  18. LINX Peering Practice (2) • Members must: • publish peering contacts • respond to peering requestswithin 2 days • Peering matrix on web page helps end-users put pressure on • Independent staff can intervene • Template “standard” peering agreement bring worked upon

  19. Good Peering Practice • “Self-regulatory” measures • Peering policies should be: • registered • in public domain • consistently & fairly implemented • stable

  20. Settlement at the LINX • Recently removed restriction on settlement-based peering • Historical rule set by founder members • Was inhibiting some large players from joining • Potential regulatory concern area • Not consistent with principle of non-intervention in peerings

  21. Alternatives to Settlement • Tiered peering used by some and works well: • exchange of subset of customer routes/territory • multiple ASes/routing policies • or bandwidth limited • Fixed fee peering

  22. QoS and Settlement • Quality of service commonly advocated reason for need for settlement-based peering • It is a red herring • Existing complex inter-provider arrangement are at manageability limit already • This will be a minority premium service, not the norm

  23. Quality of Service Issues • Inter-provider routing on Internet is policy based, uses BGP • BGP does not support QoS • QoS routing (e.g. RSVP) cannot do inter-provider policy routing • So only practical inter-provider QoS mechanism is link rate limiting

  24. QoS in Practice • 3 ways to do link rate-limiting: • private point-to-point links • ATM switches • new generation of LAN (ethernet) switches

  25. Where do IXPs fit in ? • Within EU, “national” IXPs should be needed less as telecoms market opens • Small number of pan-European IXPs emerging e.g. AMS-IX, DGIX, DE-CIX, LINX, VIX all have 25-35% non-domestic members

  26. IXP Growth • Many of the new IXPs are local/regional e.g. MaNAP, LoNAP, Scot-IX in UK; many in US • Motivated by strong IXP/co-lo synergy (e.g. PAIX) • Often intent is to stimulate local Internet economy rather than simply efficient traffic exchange

  27. Growth in Co-location • Major boom industry at present • e.g. Telehouse, Compaq, Co-lomotion • TeleCity in UK major venture-capital funded start-up • No less than 8 responders to LNX 2nd site tender less than 10km apart ! • PAIX is research project that makes profit !

  28. Growth in Co-location • Remains much unmet demand forco-lo space outside UK & US • ISPs want quality space • Web hosting ISPs want lots of quality space • Co-lo customers want choice of ISPs & carriers in facilities • Existing facilities filling up

  29. Co-Lo Growth & Peering • Private bi-lateral peering is not simple or cheap across multipleco-lo sites • Cheap dark fibre may be one solution e.g Stockholm, Palo Alto,almost Docklands • Is scaling this future role for IXPs ?

  30. Conclusions • Open peering can promote competition • Closed bi-lateral exchange can inhibit it • Open peering arbiter can facilitate competition: • as L1/L2 exchange • as organisational environment

  31. Summary • Market will determine: • when • whether • where settlement or not is best • There is room for diversity • Attempts to buck market will probably fail

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