USTelecom Webinar:

Understanding Remote Peering Tuesday, July 23 | 1:00 PM (ET)

Presented by William B. Norton

Chief Strategy Officer, International Internet Exchange (IIX), Executive Director, DrPeering International,

Author of “The Internet Peering Playbook: Connecting to the Core of the Internet”

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Understanding Remote Peering

William B. Norton Chief Strategy Officer, IIX

Executive Director, DrPeering International wbn@iixPeering.net wbn@DrPeering.net

US Telecom Webinar Live from Silicon Valley July 23, 2013 10AM PST

Meet the Presenter • Started working on Internet (NSFNET) in

1988

• 1st “Chairman” of North American Network Operator Group (NANOG) (1994-1998)

• 1998-2008 Co-Founder & Chief Technical Liaison, Equinix Inc. (NSDQ: EQIX)

• 2008-Present - Executive Director, DrPeering Int’l

• Two-day On-Site Peering Workshops (EU/Africa)

• The Internet Peering Playbook

• 2013 Chief Strategy Officer, International Internet Exchange (IIX)

Remote Peering is an important topic…

Remote Peering

• Hot Topic

• 130 of the 630 at AMS-IX are remote peering

• 50% of new at DE-CIX are remote peering

• This is not a fringe peering technique anymore

Source: Job Witteman (AMS-IX), Andreas Sturm (DE-CIX) Pre-webinar seminar…

Pre-Webinar Survey…

• Interest in Remote Peering? – Understand emerging Internet Operations trend

– Understand Peering

– Building a NG Network – see how R.P. applies

• Make sure to cover – Remote Peering impact on costs & architecture

– Applicability to Data Centers, IXPs, ISPs, CPs, etc.

• Remote Peering Pain Point – Deployment challenges

Agenda…

Agenda

1. Connecting to the Edge: Internet Transit

2. Connecting to the Core: Internet Peering

3. Connecting to the Core from afar: Remote Peering

– Remote Peering Use Cases

– Implications of Remote Peering

3 Internet Interconnection Techniques

Internet Transit…

1) INTERNET TRANSIT Connecting to the Edge of the Internet

Internet Transit Service Model

• 99.9% of all

• Announce Reachability

• Metered Service

• Simple

• “Internet This Way”

9

95th Percentile Billing Calculation • 5 minute samples

• Month of deltas

• 95th percentile

• Max(in,out)

10

Transit Pricing with Commits

• Volume discounts

• Contracts with terms and duration Commit Unit Price MinSpend

10 Mbps $12 per Mbps $120 /month

100 Mbps $5 per Mbps $500 /month

1 Gbps $3.50 per Mbps $3,500 /month

10 Gbps $1.20 per Mbps $12,000 /month

100 Gbps $0.70 per Mbps $70,000 /month

11

Internet Price Declines (U.S.)

• “Can’t go lower”

• “No one is making $”

• Pricing varies widely

• Trend unmistakable

12

2) INTERNET PEERING Connecting to the Core of the Internet

What is Internet Peering? • Definition: Internet Peering is the business relationship whereby two

companies reciprocally provide access to each others’ customers.

14

Internet Peering 3 Key Points

1. Peering is not a transitive relationship

2. Peering is not a perfect substitute

3. Peering is typically settlement free

15

The Top 5 Motivations to Peer 1. Lower Transit Costs

(#1 ISP Motivation to Peer)

2. Improve end user experience

(#1 Content Motivation)

3. Better control over routing-strategic

(Yahoo!, NetFlix 2008)

4. Usage based billing – make more money by peering

(AboveNet)

5. Sell more underlying transport capacity

(Telecom Italia)

16 Important Traffic is Peered

Important Traffic is Peered

Transit – your traffic is in same bucket Peering – you control this traffic

Does Peering cost less?

The Cost of Peering

Transport into DE-CIX $2000/mo local $4000/mo nearby $6000/mo far

Assumptions Far

Transport into IX: $6,000 per month

Colocation Fees: $1,000 per month

Peering Fees: $2,000 per month

Equipment Costs: $2,000 per month

Total Cost of Peering: $11,000 per month

18 Costs allocated across volume peered… Source: 2010 DE-CIX meeting, Frankfurt

Cost of Internet Peering

100 Mbps $110.00 per Mbps

200 Mbps $55.00 per Mbps

300 Mbps $36.67 per Mbps

400 Mbps $27.50 per Mbps

500 Mbps $22.00 per Mbps

600 Mbps $18.33 per Mbps

700 Mbps $15.71 per Mbps

800 Mbps $13.75 per Mbps

900 Mbps $12.22 per Mbps

1000 Mbps $11.00 per Mbps

1100 Mbps $10.00 per Mbps

1200 Mbps $9.17 per Mbps

1300 Mbps $8.46 per Mbps

1400 Mbps $7.86 per Mbps

1500 Mbps $7.33 per Mbps

1600 Mbps $6.88 per Mbps

1700 Mbps $6.47 per Mbps

1800 Mbps $6.11 per Mbps

1900 Mbps $5.79 per Mbps

2000 Mbps $5.50 per Mbps

2100 Mbps $5.24 per Mbps

2200 Mbps $5.00 per Mbps

Peering CostMbps ExchangedAssumptions Far

Transport into IX: $6,000 per month

Colocation Fees: $1,000 per month

Peering Fees: $2,000 per month

Equipment Costs: $2,000 per month

Total Cost of Peering: $11,000 per month

Cost of Peering allocated across the amount of traffic peered for free.

19 Generalized in Peering Vs. Transit Graph.

• Definition: The Peering Break Even Point is the point where the unit cost of peering exactly equals the unit price of Internet Transit.

20

We will use this graph to compare Transit, Peering and Remote Peering

Market Dynamics affecting these graphs…

Market Trends

Peering Cost Drops

…but Transit Price Drops Faster

21 These dynamics present brick wall…

Some question if peering makes sense today…RP

3) REMOTE PEERING Connecting to the Core of the Internet from afar

Definitions – What is Remote Peering?

• Definition: Remote Peering is peering without a physical presence required at the peering point.

• Definition: A Remote Peering Provider is an entity that sells access to exchange points across their transport infrastructure.

24 Review the costs of the Traditional Peering Model…

Traditional Peering Point to Multipoint Peering Example

Colocation Expense

Router CapEx

…and Remote Peering…

Remote Peering Point to Multipoint Remote Peering Example

Peering Fabrics Extended as VLAN To customer

No router No colo

Remote Peering Service Model…

Remote Peering Service Model

London Internet Exchange

Amsterdam Internet Exchange

German Internet Exchange

Why it works…

Remote Peering How does it work? Remote Peering Provider is already installed at the IXPs. Waves provisioned, instant turn up. Neutral RPP no business clash Peering Focus Speeds IXP deploy Little paperwork One Contract

Peering Fabrics Extended as VLAN To customer

No router No colo

Remote Peering Provider Node

Case Studies and Use Cases

CASE STUDY Four site European Deployment

Traditional Peering LinkedIn Case Study (NANOG 48 Peering BOF)

Colocation Expense

Router CapEx

Dublin

London

Frankfurt

Amsterdam Source: LinkedIn Spain (not shown)

$6K/mo

$3.5K/mo

$275K/mo

Peering Fabrics Extended as VLAN To customer

No router No colo

Summary…

Remote Peering LinkedIn Case Study (NANOG 48 Peering BOF)

$6K/mo

Dublin

London

Frankfurt

Amsterdam Spain (not shown)

Traditional Peering vs. Remote Peering

Source: Zaid Ali Kahn, LinkedIn

For the price of transport alone, one can remotely peer.

Use Cases…

USE CASES What Remote Peering Means to the Internet Peering Ecosystem

For NG Networking

• Blend Transit,

• Strategic Internet Traffic is remotely peered

• No capital costs

• Control over routing

For Int’l Networks

• Remote peer into cheap ecosystem

– Buy Transit

– Peer Away

• 98% Africa traffic from US/Europe

For Cable Companies / ISPs

• Case: Canadian MSO peers in U.S.

• But Remote Peering in LA and Miami for free Asia and South American Internet routes

For Content Companies

• Important Traffic is peered – Gold plated packets

– Peering simplified

– Peering Delivered

– Lower people cost

– Strategic intent

– Performance

• A/B testing

Commodity Transit is cheap, but some applications require more control / better performance

For Internet Service Providers, Remote Peering justifies building into more and even smallish regional IXPs. More controls over routing No Capital costs

Fast turn-up/transition strategy…

IMPLICATIONS FOR THE INTERNET PEERING ECOSYSTEM

What Remote Peering Means to the Internet Peering Ecosystem

1) For all Network Operators Remote Peering extends the life of peering

Effective Peering Range

Peering makes sense across a wider range of Mbps. Peer away 2-3Gbps and all costs are covered.

Breathe of fresh air into Peering

More peersmore IXP value…

2) For IXPs, Remote Peering increases the value of IXPs

More new peers, more traffic, more routes More Valuable IXPs

Colo->instant critical mass

Colocation Companies 3) For Colocation Centers the Remote Peering Provider enables instant critical mass ALL PEERING ROUTES ARE REACHABLE!

Reachable peers Remotely makes colocation center immediately valuable (Value > Cost)

Trials and transition

4) For all, rapid turn-up means Remote Peering enables a fast deployment/transition strategy:

1. Remote Peering

2. Full Network Deployment

Summary…

Remote Peering Summary

• New but rapid adoption

• Connect to the Core from afar

• $0 Capital Cost

• Minimal deployment time

• IXP VLANs extended to the customer router

Book Offer

• Send email to book@iixPeering.net

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• IIX Sponsorship: $9.99

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