The Value of Internet
Exchange Points and Peering
Osama I. Al-Dosary
dosary@solyton.com
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Agenda
Introduction to IXPs and Peering
 Short Term Benefits




Reducing Internet Cost
Improving Internet Service Quality
Long Term Benefits


National Internet Security and Resiliency
Growing The Local and Regional Internet
Economy
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INTRODUCTION TO
INTERNET EXCHANGE
POINTS AND PEERING
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The Internet and Internet
Service Providers
Image Courtesy of The Opte Project
The Internet and Internet
Service Providers (simplified)
$
$
$
$
$
$
$
$
$
$
$
$
Global
ISP
Global
ISP
Internet
Regional
ISP
Global
ISP
Global
ISP
Regional
ISP
Regional
ISP
IXP
Access
ISP
IXP
Access
ISP
Access
ISP
Regional
ISP
Access
ISP
Same Country or
Region
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Access
ISP
Access
ISP
ISP Relationships:
Peering and Transit

Transit




Carrying traffic across a network
Usually for a fee
Example: Access provider connects to a
regional provider
Peering




Exchanging routing information and traffic
Usually free
Sometimes called settlement free peering
Example: Regional provider connects to
another regional provider
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Private Interconnect

Two ISPs connect their networks over a
private link

Can be peering arrangement



No charge for traffic
Share cost of the link
Can be transit arrangement


One ISP charges the other for traffic
One ISP (the customer) pays for the circuit
ISP 2
ISP 1
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Public Interconnect: IXP

Several ISPs meeting in a common
neutral location and interconnect their
networks

Usually is a peering arrangement between
their networks
ISP 1
ISP 6
ISP 2
ISP 3
IXP
ISP 5
ISP 4
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Reducing Internet Cost
Improving Internet Service Quality
SHORT TERM BENEFITS OF
IXPS AND PEERING
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ISP Connectivity Cost

Transit





ISP has to pay for circuit (international or domestic)
ISP has to pay for data (usually per Mbps)
Repeat for each transit provider
Significant cost of being a service provider
Peering



ISP shares circuit cost with peer (private) or runs circuit
to public peering point (one off cost)
No need to pay for data
Data volume of peering usually much lower than transit
for smaller ISPs
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Cheaper Internet Links
Internet
Global
ISP
Global
ISP
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$
ISP
ISP
$$
End-User
End-User
Global
ISP
$
IXP
Cheaper
Capacity
Used
Same Country or Region
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ISP
End-User
IXP vs. Private Interconnect
Peering
Using Private Peering
Interconnects
Using Internet Exchange
Points


# of Circuits= N(N-1)/2
ISP
# of Circuits = N
ISP
ISP 6
ISP
ISP
ISP 2
ISP
ISP 1
ISP
ISP
ISP 5
ISP
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ISP
IXP
IXP
ISP 3
ISP
ISP 4
Latency and Its Impact
Applications can be very complex and
transactional, so one action may require
several round trips to complete.
 Reducing latency greatly improves
responsiveness of applications
 Increased latency can cause loss of
business productivity due to poor
application performance
 IXPs help improve local and regional
application performance

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Improved Performance
Internet
Global
ISP
Global
ISP
$
$
ISP
ISP
Global
ISP
$
IXP
ISP
$$
Quicker
Path
End-User
End-User
Same Country or Region
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End-User
Examples Latencies from Riyadh
Dec 8th 2012 [Best of 50+]
Local Saudi Bank: 10 msec (via peering
link)
 LSE: 110 msec (in London)
 NYSE: 162 msec (in New York)
 ISI/USC: 267 msec (in Los Angeles)

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Examples Latencies (cont’d)
Dec 8th 2012 [Best of 50+]



Qatari network: 233 msec (via London)
Kuwaiti network: 250 msec (via London)
Omani network: 327 msec (via Frankfurt, Dusseldorf,
Amsterdam)

UAE network #1: 200 msec (via Paris, Marseille,
Zurich, Vienna)

UAE network #2: 100 msec (via peering link)
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Why would two competing
ISPs peer with each other?
Both save money
 Local traffic stays local
 Better network performance, better
service quality,…
 More international bandwidth for
expensive international traffic
 Everyone is happier

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National Internet Security Internet and Resiliency
Growing The Local and Regional Internet Economy
LONG TERM BENEFITS OF
IXPS AND PEERING
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National Resiliency Needed
The Internet is Mission Critical!
 Majority of organizations rely on the
Internet for everyday local business
transactions.
 What happens if International connectivity
is disrupted (e.g. Force majeure; Cyberwarfare; etc.)?
 Internet Exchange Points provide the
resiliency needed to keep locally bound
traffic local

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Peering Golden Rule
“In order to optimize the performance and
profitability of Internet transit provision,
users must be incentivized to select
services reachable through peering, rather
than through transit.”
 “Therefore, peering circuits must be larger
than transit circuits, even if that means
that they operate at much lower
utilization.”
--Bill Woodcock, PCH

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Build it, and they will come
 Internet

Links are like roads
When direct paths don’t exist traffic
naturally discouraged
 Long
term Internet usage behavior
follows this same model

So local content/destinations have a
competitive advantage when generous
paths exist
 Traffic/e-Commerce
grows more rapidly
when given excess capacity.
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Summary
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Summary

ISPs Directly Benefit by:



Reducing Internet Cost
Improving Internet Service Quality
Bigger Picture Benefits:


Growing The Local and Regional Internet
Economy
National Internet Security and Resiliency
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Questions?
Osama I. Al-Dosary
dosary@solyton.com
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