AbstractIntroduction and DefinitionsPhase 1: Identification of Potential Peer: Traffic Engineering Data Collection and AnalysisMotivations: Why Peer?Why not peer?With Whom to Peer?II. Phase 2: Contact & Qualification, Initial Peering NegotiationIII. Phase 3: Implementation Discussions: Peering MethodologyExchange Environment Selection CriteriaTelecommunications Access IssuesDeployment IssuesISP Current Presences IssuesOperations IssuesBusiness IssuesCost IssuesCredibility IssueExchange Population IssuesExisting Exchange vs. New Exchange?One Final Note on Exchange Criteria: WeightingIV. SummaryAcknowledgementsReferencesAbout the AuthorAppendix A – Calculating the Financial Benefits of PeeringThe Financial Value of PeeringAppendix B – European Peering DifferencesAppendix B: Peering Decision TreeAppendix C – Peering Simulation GameSettingThe BoardObjectiveVariationsSummaryD R A F T 2.5 W. B. Norton Last Modified: 05/30/2001 Internet Service Providers and Peering William B. Norton <[email protected]> Abstract Internet Service Provider (ISP) peering has emerged as one of the most important and effective ways for ISPs to improve the efficiency of their operation. Peering is defined as “a business relationship whereby ISPs provide connectivity to each others’ customers.” ISPs seek peering relationships primarily for two reasons. First, peering decreases the reliance on and therefore the cost of purchased Internet transit. As the single greatest operating expense, ISPs seek to minimize these telecommunications costs. Second, peering lowers inter-Autonomous System (AS) traffic latency. Peering traffic exchanged between two peering ISPs is necessarily taking the lowest latency path. So how is peering done? This paper details the ISP peering decision-making process from selection of potential peers through implementation Interviews with Internet Service Providers1 have highlighted three distinct phases in the peering process: Identification (Traffic Engineering Data Collection and Analysis), Contact & Qualification (Initial Peering Negotiation), and Implementation Discussion (Peering Methodology). The first phases identifies the who and the why, while the last phase focuses on the how. The appendix includes the description of a Peering Simulation Game that has been used in workshops to play out peering negotiations. Introduction and Definitions Definition: Internet Service Providers (ISPs) connect end-users and businesses to the public Internet. In order for ISPs to offer this service they need to connect their network to the Internet. This interconnection can take one of two forms. Definition: Transit is the business relationship whereby one ISP provides (usually sells) access to all destinations in its routing table2. 1 Interviews with 100 ISPs over the course of two years along with presentations of the findings to ISPs at NANOG, RIPE and IEPG substantially validate the findings. 2 Note that increasingly in Europe ISPs are offering and Consider the picture below in which EastNet purchases transit from a Transit Provider (sometimes called an “Upstream” ISP) that has access to the Internet (shown as many colored networks behind Upstream ISPs). As a result of this transit relationship, EastNet receives access to all network routes in the upstream ISP’s routing table. In the picture below this is shown as colored circles (route announcements) being conveyed with arrows. In return the upstream ISP receives and announces EastNet routes across all of its peering and transit interconnections. As a result, EastNet gains connectivity to the entire Internet as known to its upstream ISP. Transit $$$EastNetUpstream Transit Provider(s)Upstream Transit Provider(s)Upstream Transit Provider(s)Upstream sells “Transit Services”by announcing reachabilityto the Entire Internet**The upstream ISP will either done announce a full routing table or, more commonly, announce a single “default” route for all destinationEastNet now can access the entireInternet as seen by the Upstream ISP Figure 1 - Transit Relationship - selling access to entire routing table Transit is a simple service from the customer perspective. All one needs to do is pay for the data service and all traffic sent to the upstream ISP is delivered to the Internet. The transit provider charges on a volume basis, measured on a per-Megabit-per-second basis. Some service providers3 prefer a transit (customer) relationship with ISPs for business reasons, arguing that the threat of lost revenue is greater than the threat obtaining hybrids. For example, they may purchase “Regional Transit” from global players in a region without adequate coverage. In a few rare cases ISPs have arranged “paid peering” to eliminate the cost of peering to one or the other. INSNet and GXNet for example. 3 Conversation with Allan Leinwand, Founder of Digital Island. Allan indicated that the financial “teeth” are much stronger with transit ISPs than with “peers”, and the threat of lost revenue provides better quality and reliability in a transit relationship.DRAFT Internet Service Providers and Peering W. B. Norton 2 Comments to the Author Welcome <[email protected]> of terminating a peering arrangement if performance of the interconnection agreement is inadequate. So why need anything else? There are primarily two motivations (engineering and financial) that we will cover later in this document. Needless to say though, the transit fees can get large as the traffic volume increases. Cable companies for example today purchase Gigabits-per-second worth of transit today4! Definition: Peering is the business relationship whereby ISPs reciprocally provide access to each others’ customers. To illustrate peering, consider figure 1 below showing a much simplified Internet; an Internet with only three ISPs: WestNet, USNet, and EastNet. WestNet has customers shown as green circles. USNet has customers of its own (blue circles) and EastNet has its customers shown as yellow circles. PeeringUSNetWestNetPeeringEastNetWestNetRouting Table(After Peering)USNetRouting Table(After Peering)EastNetRouting Table(After Peering) Figure 2 - Peering relationships In this example, WestNet has a peering relationship with USNet in which USNet announces reachability of its blue customers to WestNet, and WestNet announces reachability to its green customers to USNet. This is the essence of the peering relationship; each ISP