- NANOG - lists.nanog.org

Re: peering charges.
by Derek Elder 27 Jan '97

27 Jan '97

Settlements also open another can of worms. Take for example: Provider 1 peers with Sprint (example). Provider 1 sends/receives 10/mb avg. to Sprint. Sprint peers with Provider 1. Sprint sends/receives 5/mb avg to Provider 1 so Provider 1 pays a settlement to Sprint. Next month Provider 1 artificially inflates his utilization with Sprint by continually ftp'ing, etc. to offset the differance. Why would this be any harder to believe than pointing default? And much harder to diagnose, IMO. Pipes are filled for no reason. | Derek Elder http://www.accessus.net V.P., CIO | | djelder(a)accessus.net accessU.S., Inc. 888-637-3638 Ext. 222 |

1 0

Re: peering charges?
by Vadim Antonov 27 Jan '97

27 Jan '97

Dirk Harms-Merbitz <dirk(a)power.net> wrote: >> Would you please describe any useful mechanism of traffic-based >> inter-backbone settelemts? >Computers (third party?) on the edges of my network count the number of >packets that transit my network over a certain time period. Periodically I >issue invoices. Ok. How do you translate the number of packets into figure in $s? In a capitalist economy, price generally follows value. What is the value of a packet? It is not even clear if packet crossing from your network to my network gives _me_ any value. It can as well be for _your_ benefit. Since there's no way to determine value, the scheme is thus completely arbitrary; and therefore _is_ regressive. Economics 101. >Of course, other networks do the same. End users >(including co-located computers) simply appear as connected networks that >don't provide any transit, hence they pay for their connection. They do it today. Where's the difference? You seem to forget that carrying traffic is only a part of network service; in fact, a lot of _value_ is in the _ability_ to communicate universally. That's what made Internet a killer to all those X.25 networks. >> Because there is a real cost for long-haul packet transport. > >Remember that I said "if the same amount of packets are transfered". The >speed of my connection does not necessarily affect the number of packets >that I'm transmitting. When you lease an apartment landlord doesn't generally care if you don't sleep there six days out of seven. That's because he has (implied) obligation to provide adequate service during peak usage. > "Connection costs" is rent on transmission facilities, plus > overhead (upkeep of the property, insurance, administration, etc). >No. That's "transmission cost", not "connection cost". The cost of me >connecting to your network (not counting setup and so on) is the sum of >the interface electronics on both ends and whatever link we need >inbetween. Connection costs are generally figured into non-recurring charges. They usually do not exceed costs of equipment and overhead. >Off on a tangent... creating bandwidth is somewhat like making computer >chips. Making the first production Pentium (or whatever) processor costs >billions. The second is a few cents. Here, laying the cable is expensive. >Once it is in the ground, the cost for transporting another packet is >almost zero. This is an example of patently meaningless analogy. _Every_ business (even pyramid scams) has some capital costs. So what. Telcos lend money, put in fiber and than pay loans off from the resulting revenues. They can borrow capital internally, from their shareholders (in form of reduced dividends). The fact that tfiber is not loaded 100% all the time is figured in the user fees. >An interesting question is what do to with potential bandwidth/cpu >cycles/free ram, i.e. what are the costs of not using available capacity? >One answer is that the cost is zero until your competitor starts being >more efficient then you are. See Soviet UNION vs USA. There's no secret that the name of the game in the Internet backbones is "shove congestion back to competitor's backbone". >Back to networks... it would be logical to assume that whenever people >deploy fiber they drop as much as they can afford at that moment. You will be surprised. Sprint has 6 (six) strands of fiber in its trunks. The cost of putting in 100 strands was purely incremental, but then, some beancounters figured that those six strands will be good forever. Now, it's digging time again. >If that's true then there must be enourmous amounts of unlit fiber. In some places. Generally, LDCs are out of capacity. >What's >the total capacity going accross the atlantic or pacific? Not much. It's not like surface cables, where the real cost is digging a tranche, and buying rights of way. It costs next to nothing to drop undersea cable off the ship; but the cable itself with all its hamstrung amplifiers costs a fortune. >How much of it is being used? Practically all of it. BTW, it is generally priced in DS-0 chunks; i.e. when you get a DS-1, you pay the same as for 24 DS-0s. >I'd bet that there are many terabits of fiber that are not in use. Not at all. The worst part of it, you can't just install WDM equipment at the ends, and get more capacity. Replacement of amplifiers in the existing undersea cable is about as costly as putting in new cable. >Yes, of course, the closer you get to what's technologically feasable, >(the closer you move to the border to the future) the more expensive >things become. I guess that's the main argument used to defend higher >costs for faster connections. Never underestimate bandwidth of 10 sq feet of fiber strands. >But we don't even need to go to that edge. Building gigabit, if not >terrabit routers is amazingly simple and can be done with off the shelf >technology. Tell me about it. >Hey, a few Linux boxes interconnected with a few 100MB/sec >ethernet switches in the right fashion would allow the creation of a super >NAP that should outperform gigaswitches easily. Not _that_ simple. I won't go into details on that; but so far the only known way to do that is pretty much covered by the pending patents. >Summary: I would not be surprised if the packet carrying capacity of the >Internet could be increased by two or three orders of magnitude with >surprisingly little investments. The real challenge is how to get people >to do that. Four orders. Then something different is needed. --vadim

6 7

Re: IP Filtering / CIDR Block Size / SprintLink
by McLeodUSA 27 Jan '97

27 Jan '97

At 13:46 1/27/97 -0600, you wrote: >Agis for one that I know of, last I heard Sprint had _stopped_ filtering >blocks smaller than /19 when they fired Doran (I could be wrong). Brett: Sprint is definitely still filtering. Because we are soon to be a Sprint customer we have been able to get them to make an exception and route our /21 prefix. But this is definitely an issue we have to keep abreast of... __________________________________________________________________

1 0

Re: peering charges?
by Vadim Antonov 27 Jan '97

27 Jan '97

Dirk Harms-Merbitz <dirk(a)power.net> wrote: >> What is the value of a packet? It is not even clear if packet crossing >> from your network to my network gives _me_ any value. It can as well >> be for _your_ benefit. >Nah, you originated the packet for reasons unknown to me. Yeah? Even when that packet is the direct result of your earlier DNS request? > In a capitalist economy, price generally follows value. >Scarcity creates value, hence the desire to differentiate. Economics 101 again. Scarcity does not create anything. It's merely a range on demand-supply curve. >Once I'm connected, however, transitting traffic through your network is >the only thing that I'm interested in. Why else would I want to connect to >your network? You only interested in transmission at the point where you know _where_ to transmit. Before that you have _no_ idea you may need some specific destination. You don't know all URLs you will ever use beforehand. Thus, universal accessibility has permanent value. > That's because he has (implied) obligation to provide adequate > service during peak usage. >An simplified example. Lets say I have a direct T1 between A and B. A >starts to transfer 4 GBytes from B to A and uses 100% of the bandwidth. >Then B starts another transfer of 4GBytes from A to B. Both now use 50% of >the bandwidth and each transfer takes twice as long. It is a gross oversimplification. Things do not work like that. >I can still telnet between the two locations, even play quake - the load >is hardly noticable for short transfers. Actually, quite opposite. The handshake has nothing like quick start, only exponential back-off; so it is more vulnerable than data transmission stage of the connection. > Connection costs are generally figured into non-recurring charges. > They usually do not exceed costs of equipment and overhead. >That was my point. Why charge a higher _recurring_ fee for a faster >connection? Because the share of higher-level facilities needed to accomodate projected usage is more. > This is an example of patently meaningless analogy. _Every_ business > (even pyramid scams) has some capital costs. So what. >Why meaningless? There's no way to get the money back out once the cable >is in the ground or the chip is being fabricated. And so there is no way to recover all money spent on building a rental complex or sent out to first level of the pyramid. It's the nature of investment, ok? > You will be surprised. Sprint has 6 (six) strands of fiber in its >How do you know? I used to work there. --vadim

1 0

RE: peering charges?
by Vadim Antonov 27 Jan '97

27 Jan '97

Danny Stroud <dannystroud(a)msn.com> wrote: >We, the operators, >have a challenge to make the 'net an economically viable industry. Right now >it is not, but we seem to be headed in the right direction. des You may have tons of fun telling that this industry is not economically viable to (for example) Rick Adams. --vadim

1 0

Re: peering charges?
by Paul J. Zawada 27 Jan '97

27 Jan '97

At 09:52 AM 1/27/97 -0800, you wrote: >> [...] say your MCI and you have a smaller provider that wants to peer with >> you, you had rather have them buy a pipe than let the peer and ride your >> network for free. It's all about market share, plain and simple. > >That's the conventional thinking. (I won't say "conventional wisdom" since >this is not a wise practice.) The trouble with this is called the Sherman >Act, which has a provision for something like "collusion in restraint of >trade." I'm not pointing at MCI -- I have no idea whether they have ever >thought as you ascribed above. But in your example, MCI does not know who >the nonpeer will ultimately buy transit from -- all it knows is that if MCI >refuses to peer, the nonpeer will have to buy transit from someone who *does* >peer with MCI. If reasonable suspicion can be raised that this is occurring, >then everybody in the "first tier" peering club can be investigated by the >feds. > >This isn't a "big" deal, Microsoft has been investigated by the feds and >they're still in business. In fact, it didn't even hurt their reputation, >let alone their bottom line. When the big nets started demanding private >peering and refusing to peer with little guys, I had to just shrug and think, >"well, they are now big enough that they do not fear gov't intervention." While I agree with 99.999% of what Paul is saying, I'd like to point out that whether or not the Government presses a case (and utimately wins or loses it) against a giant corporation has little to do with the actual infractions involved. Ultimately what matters is a complex web of ego, the desire to make money, and politics. The fact that a group of major carriers are doing such-and-such won't cause the DoJ to investigate. The fact that it totally pisses off one or more of the correct people will. Once that happens, the fate the companies involved is based on such a complicated interplay of the components of the forementioned web, it is impossible to predict ahead of time what the ultimate outcome will be. --zawada Paul J. Zawada, RCDD | Senior Network Engineer zawada(a)ncsa.uiuc.edu | National Center for Supercomputing Applications +1 217 244 4728 | http://www.ncsa.uiuc.edu/People/zawada

1 0

RE: Italian Sportscars
by Danny Stroud 27 Jan '97

27 Jan '97

You missed the point. It's a figure of speech (a saying) used in business to make a point. I myself drive an expensive sports car. The comment was not about sportscars-it was a metaphor. des ---------- From: Deepak Jain Sent: Monday, January 27, 1997 10:52 AM To: Danny Stroud Subject: Italian Sportscars > I have seen people buy things that I never really understood the basic > motivations--- ultra expensive sports cars, for example. Have you ever heard > the question, "Why do they charge so much for Italian sports cars?" Answer: > Because they can. I am guessing you haven't driven an ultra expensive Italian sports car (ala Ferrari). If you did, you might feel that they spend an inordinate amount of time on even the slightest details of comfort and quality of leather, etc. The salespeople are extremely good at what it is they do, and generally run a much more expensive (high overhead) outfit. I have always found it amazing that large (volume) automobile manufacturers don't come close to the same level of design integrity even thoguh their research budgets are far higher than those of the exclusive manufacturers. A Ferrari and (even) a Dodge Viper are not even in the same league [both in terms of price or feel, or quality, let alone performance]. This is just my opinion, and not really on topic with what you were bringing it up with earlier. [Hence the private email and new title]. Regards, -Deepak.

1 0

RE: peering charges?
by David Whipple 27 Jan '97

27 Jan '97

Paul, Yes, that is exactly what we do..;-) Any other providers want to give me a free DS3?????? David Whipple. >-----Original Message----- >From: Paul A Vixie [SMTP:paul@vix.com] >Sent: Sunday, January 26, 1997 1:25 PM >To: nanog(a)merit.edu >Subject: Re: peering charges? > >> Well, my guess would be that if you don't have a DS3 backbone, why >> would the big guys want to peer with you anyway? If you don't need >> that much bandwidth (or don't have it) odds are you don't have enough >> customers for the big guys to want to peer with you. > >Chances are that the big guys all have POPs in the little guys' areas, >and that there is or could be an exchange point in each such area, and >that the big guys' customers will have better access to the little guys' >customers if peering is done. > >The reasons we don't do this aren't related to network size. There are >three reasons: (a) big guy thinks their excrement is odorless and that >everybody else ought to have to pay to get access to their perfect network >and their spamless customers; (b) big guy wants little guy to pay fair share >of WAN costs; and (c) it's a tiny bit harder to "peer" if you're only >sending local area routes rather than sending all of them everywhere. > >I agree with with the information provider model. Ultimately, entities >with attractive content will be selling access to wide area providers, who >will sell it to local area providers, who will sell it to customers. This >is the old "gatekeeper.dec.com" model extended to fee-based content. I >heard that Microsoft was letting providers terminate T3's with them since >good access to Microsoft's content is a selling point for an access >provider's customer base. Why should such a content provider have to buy >peering, or pay wide area telecom costs? On the other hand, right now >Microsoft is still effectively buying transit, and at some point they will >just charge for access to their content and let other people charge each >other for indirect access to that content. > >And Microsoft is just the first/largest. >

1 0

RE: peering charges?
by Danny Stroud 27 Jan '97

27 Jan '97

I am encouraged (not that any of you care what I feel) that there is so much dialogue about the market dynamics surrounding this subject. It seems to be a new focus (versus a more esoteric, technical focus) that I believe will drive the industry to making itself a better place for customers. We, the operators, have a challenge to make the 'net an economically viable industry. Right now it is not, but we seem to be headed in the right direction. des ---------- From: owner-nanog(a)merit.edu on behalf of Eric D. Madison Sent: Monday, January 27, 1997 8:09 AM To: Vadim Antonov Cc: davec(a)ziplink.net; nanog(a)merit.edu Subject: Re: peering charges? Your right on that last comment about market share.. say your MCI and you have a smaller provider that wants to peer with you, you had rather have them buy a pipe than let the peer and ride your network for free. It's all about market share, plain and simple. Eric _______________________________________________________ Eric D. Madison - Senior Network Engineer - ACSI - Advanced Data Services - ATM/IP Backbone Group 24 Hour NMC/NOC (800)291-7889 Email: noc(a)acsi.net On Sat, 25 Jan 1997, Vadim Antonov wrote: > Eric D. Madison wrote: > > >Since some of the larger vendors (Cisco mostly) has introduced accounting > >features into their software settlements could start any time. > > a) the accounting was there for years, so what > > b) a 100-byte packet travelled from provider A to provider B. Should A pay > to B or vice versa? > > So far nobody gave any useful answer to that question. > > There are no settlements because traffic has little relevance to relative > worth of connectivity from one provider to another. The large ISPs are > generally interested in market share or peers, not in volume of mutual traffic. > > --vadim >

1 0

RE: peering charges?
by Danny Stroud 27 Jan '97

27 Jan '97

Fine. But when pricing models get complicated I do what Pushpendra Mohta said, "follow the money." That usually clears things up and makes it easy to discern who is the seller and who is the buyer. Refer back to my original message. I have seen people buy things that I never really understood the basic motivations--- ultra expensive sports cars, for example. Have you ever heard the question, "Why do they charge so much for Italian sports cars?" Answer: Because they can. des ---------- From: Mike Leber Sent: Monday, January 27, 1997 1:28 AM To: Danny Stroud Cc: Vadim Antonov; davec(a)ziplink.net; madison(a)queber.acsi.n.et; nanog(a)merit.edu Subject: RE: peering charges? On Mon, 27 Jan 1997, Danny Stroud wrote: > I empathize with your angst over the charging issues. But the answer is in > microeconomics. Those that have something that others want can charge for it. Yes, however things are more complicated than that. The Internet ecomony is particulary bizzare in that the activity of a vistor visiting a web site (the majority of Internet traffic) is not a simple zero sum economic transaction. This is because the visitor wants to visit the site and the site owner typically wants them to visit (both get value). Assume you have a network A (which only does dialup) serving 100,000 dialup customers, and network B (which only does hosting) hosting 10,000 virtual hosts. By directly peering they create new value for their respective (and different) customer bases. Unlike consumable hardgoods, you can create more of your product (external connectivity) by selectively giving it away. The selection process, amoung other things, aims to reduce lost sales by not giving peering to potential customers. Mike. ps. Some may say networks A and B are enduser networks, but most of the largest networks now offer one or both of these services directly. +------------------- H U R R I C A N E - E L E C T R I C -------------------+ | Mike Leber Direct Internet Connections Voice 408 282 1540 | | Hurricane Electric Web Hosting & Co-location Fax 408 971 3340 | | mleber(a)he.net http://www.he.net | +---------------------------------------------------------------------------+

1 0