As Bill Woodcock asserts, there is no question that peering at exchanges is driven by economics more than other advantages such as path minimization or performance maximization, whether you are peering amongst Tier1's or are a Tier2/other minimizing your transit $$$ by maximizing your peering traffic %. But the drop in transit pricing, and things like burstible billing, have definitely changed the "margin" in this calculation. So now we see folks going to exchanges/neutral colocation for much more than just peering arguments, but a combo of: -public peering -private peering -access to lots of low-cost transit providers -access to lots of low-cost circuit providers--including ethernet "local loops" -ease of switching bandwidth suppliers -just need a good facility to put a POP -sell services As for IXen in Europe versus US, the history (having suffered thru this at MAE-East) is that FDDI-based US exchanges reached congestion first, and the largest traffic pushers were forced to go the private peering route. So legacy exchanges then entered a rather spotty period of faltering critical mass, competing exchanges, diverging technology choices (ATM versus Ether) and a mixed private/public interconnection model. Today, congestion is not a problem at US IXen, but having critical public peering mass in all the major geographic peering areas is. Whereas European public exchanges never experienced congestion, since by time traffic growth hit, there were egress-buffered GigE switches available. Thus they continued merrily along toward critical mass, and traffic at exchanges like LINX (surpassed 13 Gbps this week!), AMS-IX, and even Japanese exchanges have surpassed legacy US exchanges. However, new entrants to RIPE and APNIC IX business may certainly pull at the peering concensus in these areas. Cheers, -Lane

-----Original Message----- From: Giles Heron [mailto:giles@packetexchange.net] Sent: Friday, November 30, 2001 9:38 AM To: David R. Dick Cc: nanog@merit.edu Subject: Re: a question about the economics of peering

"David R. Dick" wrote:

...

...

Today, I was approached by

*unnamed-ethernet-extension-company*. They

...

...

extend ethernets between several US and UK peering exchanges.

While speaking with them today, thier engineer and I got into a little bit of a disagreement as to why people peer with each other at public exchange points. My belief is that generally speaking, networks meet at public exchange points (such as MAE-*, LINX, AMSIX, AADS, etc) is to exchange traffic with each other more economically (read: save money).

His belief is that people will pay a premium to get to an exchange point, because it's worth paying a premium to have 'less hops' between two networks.

The problem with this idea is that public exchange points need to be *avoided* when they get too congested. People may start out trying to minimize number of hops, but I think they eventually try to minimize total latency.

but what if the *unnamed-ethernet-extension-company* wasn't providing access to public exchange points, but was rather enabling uncongested private peering over its network? That way latency and hop count are both mimimised.

BTW, public IXen in Europe don't tend to be congested. Whether this is the result of better management, or of lower traffic volumes, than IXen in the US I'm not sure...

Giles

...

...

Essentially, he said that paying more for peering that

for transit is

...

typical, and to be expected, and most people accept this.

Whats the common opinion on this?

-- ================================================================= Giles Heron Principal Network Architect PacketExchange Ltd. ph: +44 7880 506185 "if you build it they will yawn" =================================================================