A Business Case for Peering in
2010
William B. Norton
Executive Director, DrPeering.net
wbn@DrPeering.net
30-31 August 2010
Frankfurt, Germany
4/8/2015 6:11:08 AM
15 YEAR ANNIVERSARY PARTY 1st DE-CIX CUSTOMER SUMMIT
This work was sponsored in part
by DE-CIX and DrPeering.net
Background
1987 – building
Internet Ops community
1998 – building
Peering Intelligence
2008 – consulting,
education
DrPeering.net Peering Resources
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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
All freely available
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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
This is how I level set
INTERNET TRANSIT
Definition of Transit
Definition: Internet Transit is the business relationship whereby one ISP provides
(usually sells) access to all destinations in its routing table
Simple
Well defined
No netops req’d
Traffic flows opposite direction of routing announcements
95th%
95th Percentile
P
Internet Transit Declines
Noone makes $
Can’t go down
trend
Market Prices for Transit
Source: http://drpeering.net/white-papers/Internet-Transit-Pricing-Historical-And-Projected.php
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
AFTER INTERNET TRANSIT
DOES PEERING MAKE SENSE
ANYMORE?
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
http://drpeering.net/forms/peering-top-fifty-list.xlsx
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
$8000/mo
$6000/mo
$2000/mo
Plug some #’s in
1) 10G Transport Fees: $6K/mo
2) Colocation Fees: $1K/mo
Colo $1000/mo
3) Peering (10GPort,membership,etc) Fees: $2K/mo
Alternative to Peering: Transit at $5/Mbps
4) Routing equipment: $8K/mo
How do we compare peering and transit?
Total Cost of Peering: $17K/mo
Can peer ~ 7Gbps (for free) = $17K/7000=$2.43/Mbps best case scenario
1M,2M,3M
Peering Cost $17K/month
Peering Cost in $/Mbps Exchanged
$180.00
$160.00
$140.00
$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
$0.00
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
Peering Metrics
Effective Peering Bandwidth /
Minimum Cost of Traffic Exchange
Peering Cost in $/Mbps Exchanged
$180.00
$160.00
$140.00
costOfPeering
effectivePeeringBW
$17KperMonth
minim um CostOfTrafficExchange
 $2.34/ Mbps
7000Mbp
minim um CostOfTrafficExchange

$120.00
$100.00
$80.00

$60.00
Minimum Cost of
Traffic Exchange=$2.34/Mbps
$40.00
$20.00
6900
6700
6500
6300
6100
5900
5700
5500
5300
5100
4900
4700
4500
4300
4100
3900
3700
3500
3300
3100
2900
2700
2500
2300
2100
1900
1700
1500
1300
1100
900
700
500
300
100
$0.00
Effective Peering
Bandwidth=7000Mbps
Peering Break Even Point
$180.00
$160.00
costOfPeering
priceOfTransit
$17,000perMonth
peeringBreakEvenPo
int 
$5 perMbps
peeringBreakEvenPo
int  3400Mbps
peeringBreakEvenPo
int 
$140.00
$120.00
$100.00

$80.00
Peering Break Even Point
$60.00
$40.00
$2.34/Mbps
$20.00
Transit@$5/Mbps
6900
6700
6500
6300
6100
5900
5700
5500
5300
5100
4900
4700
4500
4300
4100
3900
3700
3500
3300
3100
2900
2700
2500
2300
2100
1900
1700
1500
1300
1100
900
700
500
300
100
$0.00
Range…
Effective Peering Range
$180.00
$160.00
effectivePeeringBandwidth range( peeringBreakEvenPo
int,effectivePeeringBandwidth
)
effectivePeeringBandwidth
$17K  range(3.4Gbps,7Gbps)
$140.00
$120.00
$100.00

$80.00
Peering Break Even Point
$60.00
$40.00
$2.34/Mbps
$20.00
Transit@$5/Mbps
6900
6700
6500
6300
6100
5900
5700
5500
5300
5100
4900
4700
4500
4300
4100
3900
3700
3500
3300
3100
2900
2700
2500
2300
2100
1900
1700
1500
1300
1100
900
700
500
300
100
$0.00
Effective Peering Bandwidth
Generalized
Peering Break Even Point
Minimum Cost of
Traffic Exchange
Effective Peering Range
Effective Peering Bandwidth
Peering Metrics
The Business Case for Peering in 2010
Frankfurt
Madrid
Budapest
Value Of an Internet Exchange
Assume that the next best alternative to peering at DECIX is transit
At $2/Mbps.
valueOfDECIX m bpsExchanged* avgTransitPrice
valueOfDECIX2010  1000000* $2 / Mbps
valueOfDECIX2010  $2,000,000perMonth
If the DECIX were to disappear tomorrow, the peering population
would be $2M per month worse off.

The DE-CIX is very valuable to the peering population there.
TOP TEN LISTS
Top
Top
Top10
10
n Lists
Lists
Why Peer?
Why not Peer?
Top 10 ways seasoned Peering
Coordinators Contact Target ISPs
Top 4 Motivations to Peer
① Lower Transit Costs
② Lower Latency
③ Usage-based traffic billing
④ Marketing Benefits
Top 10 Reasons NOT to Peer
①
②
③
④
⑤
⑥
⑦
⑧
⑨
⑩
Traffic Asymmetry
Transit Sales Preferred
Ports are for Revenue
Keep Transit Prices from sliding
Prefer SLAs
Traffic Ratio denial
Transit is Cheaper
Personality Conflicts
We aren’t true Peers
We don’t have the cycles
Top 10 ways to contact Peers
①
②
③
④
⑤
⑥
⑦
⑧
⑨
⑩
face-to-face at informal meeting in an Internet Operations forum like
NANOG, IETF, RIPE, GPF, APNIC, AFNOG, etc.,
face-to-face at Commercial Peering Forums like Global Peering Forum (you
must be a customer of one of the sponsoring IXes)
face-to-face at IX Member Meetings like DECIX, LINX, or AMS-IX member
meetings.
introductions through an IX Chief Technical Liaison or a peer that knows the
right contacts
via electronic mail, using the pseudo standard peering@ispdomain.net or a
personal contact,
from contacts listed on an exchange point participant list, or peeringdb
registrations,
with tech-c or admin-c from DNS or ASN registries,
Google for peering contact AS peering ,
from the target ISP sales force, at trade show or as part of sales process,
from the target ISP NOC.
Top 9 IX Selection Criteria
① Telecommunications Issues
② Deployment Issues
③ ISP Current Presences
④ Operations Issues
⑤ Business Issues
⑥ Cost Issues
⑦ Credibility Issues
⑧ Exchange Population Issues
⑨ Existing 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?