A Business Case for Peering in 2010 William B. Norton Executive Director, DrPeering.net August 2010 Frankfurt, Germany 15 YEAR ANNIVERSARY PARTY 1st DE-CIX CUSTOMER SUMMIT This work was sponsored in part by DE-CIX and DrPeering.net 7/2/2015 4:02:49 AM

The Importance of Context

Background 1987 – building Internet Ops community 1998 – building Peering Intelligence 2008 – consulting, education

DrPeering.net Peering Resources Internet Service Providers and Peering A Business Case for Peering About the White Paper Process The Art of Peering - The Peering Playbook The Art of Peering - The IX Playbook Chief Technical Liaison Ecosystems: 95th Percentile Measurement for Internet Transit Asia Pacific Peering Guidebook Evolution of the U.S. Peering Emerging Video Internet Ecosystems European vs US Internet Exchange Points Internet DataCenter Build vs Buy Decision Internet Service Providers and Peering Internet Transit Pricing Historical and Projections Modeling the value of an Internet Exchange Point NANOG History Peering: Motivations to Peer A Study of 28 Peering Policies Peering Simulation Game Peering: Top 10 Ways to Contact Peering Coordinators Peering: Top 10 Reasons NOT to peer Public vs Private Peering - the Great Debate The Folly of Peering Ratios Top 9 IX Selection Criteria Video Internet - The Next Wave of Massive Disruption to the U.S. Peering Ecosystem All freely available

INTERNET TRANSIT This is how I level set

Definition of Transit Definition: Internet Transit is the business relationship whereby one ISP provides (usually sells) access to all destinations in its routing table 95 th % Simple Well defined No netops req’d Traffic flows opposite direction of routing announcements

95 th Percentile PP

Internet Transit Declines trend Noone makes $ Can’t go down

Market Prices for Transit Source:

Good news – Traffic always grows P  60%V80% 

Group: What happens at $0/Mbps? BrainStorm – shout out – Tell me how a content distribution business can make money when – The transit price is $0/Mbps

PRICE OF TRANSIT $2-3/Mbps $1 $2 $400 $2-3/Mbps

DOES PEERING MAKE SENSE ANYMORE? AFTER INTERNET TRANSIT

Analysis of Traffic Flow Vs.direct

Analysis of Traffic Flow Def.P

Definition of Peering Definition: Internet Peering is the business relationship whereby companies reciprocally provide access to each others’ customers. Peering is not a perfect substitute for transit, & is not transitive. Back to traffic flow…

Analysis of Traffic Flow Top50

Peering Top 50 Histogram Cost

Cost of Peering Peering is NOT FREE 1)Transport Fees 2)Colocation Fees 3)Peering (Port,membership,etc) Fees 4)Routing equipment #s

Cost of Peering Plug some #’s in 1)10G Transport Fees: $6K/mo 2)Colocation Fees: $1K/mo 3)Peering (10GPort,membership,etc) Fees: $2K/mo 4)Routing equipment: $8K/mo Total Cost of Peering: $17K/mo Can peer ~ 7Gbps (for free) = $17K/7000=$2.43/Mbps best case scenario Alternative to Peering: Transit at $5/Mbps How do we compare peering and transit? $6000/mo $8000/mo $2000/mo Colo $1000/mo 1M,2M,3M

Cost of 10G Transport Local – in Amsterdam to AMSIX $2000/mo Near – in nearby countries $4000/mo Far – still in Europe $6000/mo Source for sample data: Bjorn Bjerkeskaug Edwin Punt

Peering Cost $17K/month Peering Metrics

Effective Peering Bandwidth / Minimum Cost of Traffic Exchange Effective Peering Bandwidth=7000Mbps Minimum Cost of Traffic Exchange=$2.34/Mbps

Peering Break Even Point $2.34/Mbps Peering Break Even Point Range…

Effective Peering Range $2.34/Mbps Peering Break Even Point Effective Peering Bandwidth Generalized

Peering Break Even Point Peering Metrics Effective Peering Range Effective Peering Bandwidth Minimum Cost of Traffic Exchange

The Business Case for Peering in 2010 Frankfurt Madrid Budapest

Value Of an Internet Exchange If the DECIX were to disappear tomorrow, the peering population would be $2M per month worse off. Assume that the next best alternative to peering at DECIX is transit At $2/Mbps. The DE-CIX is very valuable to the peering population there.

TOP TEN LISTS

Top 10 Lists Why Peer? Why not Peer? Top 10 ways seasoned Peering Coordinators Contact Target ISPs Top n Lists

Top 4 Motivations to Peer ①Lower Transit Costs ②Lower Latency ③Usage-based traffic billing ④Marketing Benefits

Top 10 Reasons NOT to Peer ①Traffic Asymmetry ②Transit Sales Preferred ③Ports are for Revenue ④Keep Transit Prices from sliding ⑤Prefer SLAs ⑥Traffic Ratio denial ⑦Transit is Cheaper ⑧Personality Conflicts ⑨We aren’t true Peers ⑩We don’t have the cycles

Top 10 ways to contact Peers ①face-to-face at informal meeting in an Internet Operations forum like NANOG, IETF, RIPE, GPF, APNIC, AFNOG, etc., ②face-to-face at Commercial Peering Forums like Global Peering Forum (you must be a customer of one of the sponsoring IXes) ③face-to-face at IX Member Meetings like DECIX, LINX, or AMS-IX member meetings. ④introductions through an IX Chief Technical Liaison or a peer that knows the right contacts ⑤via electronic mail, using the pseudo standard or a personal contact, ⑥from contacts listed on an exchange point participant list, or peeringdb registrations, ⑦with tech-c or admin-c from DNS or ASN registries, ⑧Google for peering contact AS peering, ⑨from the target ISP sales force, at trade show or as part of sales process, ⑩from the target ISP NOC.

Top 9 IX Selection Criteria ①Telecommunications Issues ②Deployment Issues ③ISP Current Presences ④Operations Issues ⑤Business Issues ⑥Cost Issues ⑦Credibility Issues ⑧Exchange Population Issues ⑨Existing Exchange vs. New Exchange?

Q&A Will this in a document form help you make the internal case for peering? What would appeal to your team?