1. © XchangePoint 2001 Economic Differences Between Transit and Peering Exchanges Keith Mitchell Chief Technical Officer NANOG 25 10th June 2002

2. © XchangePoint 2001 Definitions  IXP( = IPP + ITP)  Internet eXchange Point  IPP  Internet Peering Point  ITP  Internet Transit Point

3. © XchangePoint 2001 The Evolving Interconnect Market

4. © XchangePoint 2001 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

5. © XchangePoint 2001 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

6. © XchangePoint 2001 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

7. © XchangePoint 2001 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

8. © XchangePoint 2001 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

9. © XchangePoint 2001

10. 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