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

© XchangePoint 2001

Economic Differences Between Transit and Peering Exchanges

Keith MitchellChief Technical Officer

NANOG 2510th June 2002


Definitions

IXP ( = IPP + ITP) Internet eXchange Point

IPP Internet Peering Point

ITP Internet Transit Point


The Evolving Interconnect Market

Peering Transit

PrivateHigh Volume

QoSNorth America

Traditional

Public Traditional Opportunity


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


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


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


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


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


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

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

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