Re: interconnection costs

[Bill Norton]

Hi Reza - 

When researching the costs of peering you should perhaps categorize into the 
most popular forms of peering.

Public (many-to-many) peering solutions vs. private (one-to-one)
--
There are of course many opinions on the merits of public peering vs. private 
peering, economically, technically, and strategically, but the unit cost per 
bit varies in both cases based on how much traffic is exchanged. The unit cost 
is the cost of peering divided by the amount of traffic peered, giving us a 
measure in $/Mbps. Network operators often compare this against the unit cost 
of transit, and make their decisions based primarily on cost. Generally I have 
seen content and cloud companies care more about the end-user experience and 
less about the cost of delivering the bits. To them peering directly provides 
better connectivity, so even if it costs more that Internet Transit it is often 
strategic to do so to improve the end-user experience. We now have data to back 
this improved end-user experience.

Remote Peering 
--
And then consider that one can remove the capital costs and reduce the opex for 
public and private peering through a technique called remote peering (aka 
‘tethering’) into the well populated IXPs. 

Here we can remove the cost of the routers (amortized to thousands per month 
typically), opex for powered colocation (maybe thousands per month) and 
deployment costs. The transport cost remains. One write up I did in The 
Internet Peering Playbook showed that remote peering into an IXP can be had for 
about the cost of the transport alone. I also collected the religious arguments 
from the field highlighting the arguments for and against remote peering. This 
can be found in the book as well as in this blog:

http://drpeering.net/AskDrPeering/blog/articles/Ask_DrPeering/Entries/2012/9/18_The_Great_Remote_Peering_Debate.html
 


I hope this helps -

Bill 

> On Dec 22, 2015, at 11:11 AM, Reza Motamedi  wrote:
> 
> Thanks guys for the replies.
> 
> I wanted to clarify two things in my questions. First by peering I did not
> necessarily mean "settlement free" interconnection. I meant any inter-AS
> connection. My understanding is that in addition to the cost of transit
> that should be paid to the transit provider, there also exists the cost of
> the xconnect that is charged by the colocation provider. Secondly, my
> question was more about the expenses, as opposed to the technical
> costs/benefits. I have browsed through the "Peering Playbook", but I think
> its more about providing a case "settlement free" peering.
> 
> Best Regards
> Reza Motamedi (R.M)
> Graduate Research Fellow
> Oregon Network Research Group
> Computer and Information Science
> University of Oregon
> 
> On Tue, Dec 22, 2015 at 9:33 AM, James Bensley  wrote:
> 
>> On 22 December 2015 at 16:44, Reza Motamedi 
>> wrote:
>>> I think there is no single answer as different businesses may have
>>> different pricing models. I hope the discussion can help me understand
>> the
>>> whole ecosystem a little bit better.
>> 
>> 
>> Hi Reza,
>> 
>> I have a list of example items that need to be costed in below, it is
>> by no means a definitive list though:
>> 
>> 
>> https://docs.google.com/document/d/1i2bPZDt75hAwcR4iKMqaNSGIeM-nJSWLZ6SLTTnuXNs/edit?pref=2=1#
>> 
>> 
>> Cheers,
>> James.
>> 
>> 

[Nanog-futures] Invitation to connect on LinkedIn

[Bill Norton]

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- Bill

Bill Norton
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San Francisco Bay Area

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