The	  Structure	  of	  Today’s	  Public	  Internet	  The21 Century Internet   stPeering Ecosystem                         ...
Tier	  1	  ISPs	  migrate	  back	  into	  IXPs	  •  1999	  WP:	                                 •  Documented	  the	  math...
Where	  the	  Tier	  1	  ISPs	  peer	                                      SIX	                              EQIX	  Chicag...
Evolu=on	  of	  the	  U.S.	  Peering	  Ecosystem	  •  1999/2000	  Economic	  Collapse	  of	  the	  Telecom	       Sector	 ...
Evolu=on	  #1	  –	  Cable	  companies	  peer	  •  40%	  P2P	  (Kazaa)	  •  Capacity	  upgrades	     filled	  immediately	  ...
Cable	  Companies	  Peer	  •  Significant	     evolu=on	  because	     –  Massive	  Volume	        of	  traffic	  peered	    ...
Evolu=on	  #2	  –	  Large	  Scale	  Network	  Savvy	  Content	  Providers	  Peer	  •  #1	  Improve	  end	  user	     exper...
LSNSCP	  Peer	  •  Significant	     because:	  1)	  End-­‐User	  performance	  2)	  Transit	  cost	  reduc=on	  3)	  Needed...
Evolu=on	  #3:	  Cable	  Companies	  and	  LSNSCP	  Peer	  •  Open	  Peering	  •  Massive	  traffic	  pulled	     from	  Tie...
Evolu=on	  #4:	  CDNs	  Dominate	  Traffic	  Volume	  •  “Web	  Objects”	     uploaded	  to	  CDN	  •  Video	  Objects	  are...
Evolu=on	  #5:	  Video	      Hollywood System Morphs...                                                              Innov...
A	  fundamental	  shiu	  in	  the	  power	  base	  of	                         the	  Internet	  Peering	  Ecosystem	  #6: ...
Evolu=on	  #6:	  Access	  Power	  Peering	  •  2010	  –	  40-­‐50%	  of	  all	      •  Video	  is	  or	  soon	  will	  be	...
 	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	                                                         2010-­‐20...
Cap=ve	  Access	  Power	  Peering	  Example	  Level3	  broad	  business	  deal	  Fiber,	  transit,	  free	  peering	  (on-...
Cap=ve	  Access	  Power	  Peering	  Example	  *3	  Ways	  to	  reach	  Comcast	  1)  Transit	  (AàGLBXàComcast)	  2)  Pa...
Cap=ve	  Access	  Power	  Peering	  Example	  *3	  Ways	  to	  reach	  Comcast	  1)  Transit	  (AàGLBXàComcast)or	  	  W...
Cap=ve	  Access	  Power	  Peering	  Example	  *3	  Ways	  to	  reach	  Comcast	  1)  Transit	  (AàGLBXàComcast)or	  	  W...
1)	  NetFlix	  Applica=on	  2010	  NetFlix	  distributes	  Video	  via	  CDNs	  Massive	  growth	  O(100’sGbps)	  Great	  ...
1)	  NetFlix	  Applica=on	  2010	  NetFlix	  distributes	  Video	  via	  CDNs	  Massive	  growth	  O(100’sGbps)	  Great	  ...
2)	  Level	  3	  requests	  more	  peering	  interconnects	  Akamai	  loses	  T$	  Comcast	  loses	  PP$	  	  Level	  3	  ...
2)	  Level	  3	  requests	  more	  peering	  interconnects	  Akamai	  loses	  T$	  Comcast	  loses	  PP$	  	  Level	  3	  ...
2)	  Level	  3	  requests	  more	  peering	  interconnects	  Akamai	  loses	  T$	  Comcast	  loses	  PP$	  	  Level	  3	  ...
3)	  Result	  &	  Observa=on	  Comcast	  leverages	  peering	  to	  get	  $$	  from	  all	  sides	  	                     ...
Last	  Break	                                      	                               Next	  Up:	                            ...
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10 the 21st-century-internet-peering-ecosystem

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10 the 21st-century-internet-peering-ecosystem

  1. 1. The  Structure  of  Today’s  Public  Internet  The21 Century Internet stPeering Ecosystem ©2012  DrPeering  Interna=onal   Licensed  material  –  sales@DrPeering.net   hCp://DrPeering.net  
  2. 2. Tier  1  ISPs  migrate  back  into  IXPs  •  1999  WP:   •  Documented  the  math   Interconnec=on   •  5  ISPs  in  completely   Strategies  for  ISPs   cover  the  cost  of  metro  •  Working  closely  to   circuits   understand  their   •  And  no  18  mo   mo=va=ons   turnaround  •  Iden=fy  pain  point:  18   •  8  independent  RFPs   mos  past  FOC  date   released  •  IXPs  can  do  24  hr   •  2001:  EQIX  wins  most   turnaround   2  
  3. 3. Where  the  Tier  1  ISPs  peer   SIX   EQIX  Chicago,  IL   <Various…>   EQIX  Ashburn.  VA   EQIX  San  Jose,  CA   AtlantaIX   EQIX  Los  Angeles,  CA   EQIX  Dallas,  TX  Spread  the  load,  more  paths  to  des=na=on,  beCer  performance  for  customers.   3  
  4. 4. Evolu=on  of  the  U.S.  Peering  Ecosystem  •  1999/2000  Economic  Collapse  of  the  Telecom   Sector  •  Growth  in  used  equipment  market  •  Upstream  for  cable  cos  goes  bankrupt   (@Home)  30  days  no=ce  to  be  ISPs!  •  Peer-­‐to-­‐peer  file  sharing  fills  pipes  •  Transit  prices  drop     4  
  5. 5. Evolu=on  #1  –  Cable  companies  peer  •  40%  P2P  (Kazaa)  •  Capacity  upgrades   filled  immediately  •  Cable  doesn’t   compete  with  cable  •  Conference  call   5  
  6. 6. Cable  Companies  Peer  •  Significant   evolu=on  because   –  Massive  Volume   of  traffic  peered   –  Kazaa  Effect   •  20%+  bump   •  “More  local”   –  Grandma  Story   –  Cable  companies   adopted  open   Peering  Policy   6  
  7. 7. Evolu=on  #2  –  Large  Scale  Network  Savvy  Content  Providers  Peer  •  #1  Improve  end  user   experience  •  Reduce  transit  costs  •  Move  to  new  data   center  anyway  •  Large  volume  traffic  •  Open  Peering  Policies  •  Leaders:  Yahoo!,   Google,  Electronic  Arts,   Sony  Online,  Microsou,   etc.   7  
  8. 8. LSNSCP  Peer  •  Significant   because:  1)  End-­‐User  performance  2)  Transit  cost  reduc=on  3)  Needed  to  move  anyway  (out  of  bankrupt  data  center)   8  
  9. 9. Evolu=on  #3:  Cable  Companies  and  LSNSCP  Peer  •  Open  Peering  •  Massive  traffic  pulled   from  Tier  1  ISPs  •  Fat  Middle  of  the   Internet  Peering   Ecosystem  •  “Donut  Peering”  •  Leaders  pave  the   wave  •  “We  expect  customers   to  to  that  which  is   ra=onal”  –  Level  3   9  
  10. 10. Evolu=on  #4:  CDNs  Dominate  Traffic  Volume  •  “Web  Objects”   uploaded  to  CDN  •  Video  Objects  are   massive  •  Selling  Transit  but   delivering  from  a   place  closer  to  the   eyeballs  •  Open  Peering  policy  •  10G  deployment  story   10  
  11. 11. Evolu=on  #5:  Video   Hollywood System Morphs... Innovation P2P Lawsuits Products Adjusted Release Window Shortened Simultaneous Int’l Releases VideoConf Digital Download - Rent/BuyCommercial-sponsored TV: Hulu 5M SkypeTV 2010 11  
  12. 12. A  fundamental  shiu  in  the  power  base  of   the  Internet  Peering  Ecosystem  #6: Access Power Peering
  13. 13. Evolu=on  #6:  Access  Power  Peering  •  2010  –  40-­‐50%  of  all   •  Video  is  or  soon  will  be   Internet  Traffic  is  Video   the  dominant  •  Video  unlike  other   applica=on   content:  quality  maCers   •  Massive  customer   –  Ar=facts  &  suspension  of   demand   disbelief   •  Who  has  the  power?   –  Massive  volume   –  Eyeball  networks?  •  Cable  Companies   –  Content  distributors?   peering  policy  changes   •  We  will  demonstrate   –  Balanced  ra=os   this  with  a  recent  story   –  Paid  Peering  offered   13  
  14. 14.                                         2010-­‐2012  CAPTIVE  ACCESS  POWER   PEERING   The  Hot  Topic  Today  in  the  Internet  Peering  Community               14  
  15. 15. Cap=ve  Access  Power  Peering  Example  Level3  broad  business  deal  Fiber,  transit,  free  peering  (on-­‐net),  etc.    *3  Ways  to  reach  Comcast  1)  Transit  (LLNWàGLBXàComcast)  2)  Paid  Peering  (LLNW-­‐>Comcast)  3)  Peering  (LLNW-­‐>Comcast)  w/vol  &  <2.5:1   ra=o    Video  is  highly  asymmetric  up  to  30:1  Comcast  peering  ra=o  requirement<2.5:1    All  paths  require  Comcast  Peering  is  direct,  high  performance  Transit  is  subject  to  loss/latency    OTT  Video  requires  high  performance  No  alterna=ve  path  to  Comcast  eyeballs  but  through  Comcast  (Cap=ve  customers)   15  
  16. 16. Cap=ve  Access  Power  Peering  Example  *3  Ways  to  reach  Comcast  1)  Transit  (AàGLBXàComcast)  2)  Paid  Peering  (A-­‐>Comcast)  3)  Peering  (A-­‐>Comcast)  w/vol  &  <2.5:1    Video  is  highly  asymmetric  up  to  30:1  Comcast  peering  ra=o  requirement<2.5:1    All  paths  require  Comcast  Peering  is  direct,  high  performance  Transit  is  subject  to  loss/latency    OTT  Video  requires  high  performance  No  alterna=ve  path  to  Comcast  eyeballs  but  through  Comcast  (Cap=ve  customers)    If  you  are  in  the  video  distro  biz  you  must  buy  paid  peering  from  Comcast   16  
  17. 17. Cap=ve  Access  Power  Peering  Example  *3  Ways  to  reach  Comcast  1)  Transit  (AàGLBXàComcast)or    WORSE!  2)  Paid  Peering  (A-­‐>Comcast)  3)  Peering  (A-­‐>Comcast)  w/vol  &  <2.5:1    Video  is  highly  asymmetric  up  to  30:1  Comcast  peering  ra=o  requirement<2.5:1    All  paths  require  Comcast  Peering  is  direct,  high  performance  Transit  is  subject  to  loss/latency    OTT  Video  requires  high  performance  No  alterna=ve  path  to  Comcast  eyeballs  but  through  Comcast  (Cap=ve  customers)    If  you  are  in  the  video  distro  biz  you  must  buy  paid  peering  from  Comcast   17  
  18. 18. Cap=ve  Access  Power  Peering  Example  *3  Ways  to  reach  Comcast  1)  Transit  (AàGLBXàComcast)or    WORSE!  2)  Paid  Peering  (A-­‐>Comcast)  3)  Peering  (A-­‐>Comcast)  w/vol  &  <2.5:1    Video  is  highly  asymmetric  up  to  30:1  Comcast  peering  ra=o  requirement<2.5:1    All  paths  require  Comcast  Peering  is  direct,  high  performance  Transit  is  subject  to  loss/latency    OTT  Video  requires  high  performance  No  alterna=ve  path  to  Comcast  eyeballs  but  through  Comcast  (Cap=ve  customers)    If  you  are  in  the  video  distro  biz  you  must  buy  paid  peering  from  Comcast   18  
  19. 19. 1)  NetFlix  Applica=on  2010  NetFlix  distributes  Video  via  CDNs  Massive  growth  O(100’sGbps)  Great  Service    Level  3  bids  cheaper  and  wins  the  NetFlix  business    Who  wins?            Who  loses?     19  
  20. 20. 1)  NetFlix  Applica=on  2010  NetFlix  distributes  Video  via  CDNs  Massive  growth  O(100’sGbps)  Great  Service    Level  3  bids  cheaper  and  wins  the  NetFlix  business    Who  wins?    NetFlix  –  lower  prices  Level  3  –  new  customer  Has  eyeballs  as  customers  also    Who  loses?    Akamai  –  revenue  for  leading  &  growing  video  customer  Comcast  –  revenue  from  Akamai   20  
  21. 21. 2)  Level  3  requests  more  peering  interconnects  Akamai  loses  T$  Comcast  loses  PP$    Level  3  freely  peers  the  traffic  Level  3  requests  more  interconnects     21  
  22. 22. 2)  Level  3  requests  more  peering  interconnects  Akamai  loses  T$  Comcast  loses  PP$    Level  3  freely  peers  the  traffic  Level  3  requests  more  interconnects  Comcast  says  No  –  you  pay  like  AKAM&LLNW     22  
  23. 23. 2)  Level  3  requests  more  peering  interconnects  Akamai  loses  T$  Comcast  loses  PP$    Level  3  freely  peers  the  traffic  Level  3  requests  more  interconnects  Comcast  says  No  –  you  pay  like  AKAM&LLNW  Level  3  Acquiesces  Level  3  pays  paid  peering  fees  to  Comcast    =Cap=ve  Access  Power  Peering    Comcast’s  consistency  hardens  the  Cap=ve  Access  Power  play  into  a  trend.   23  
  24. 24. 3)  Result  &  Observa=on  Comcast  leverages  peering  to  get  $$  from  all  sides     vNo  alterna=ve  to  reach  Comcast  customers     t“Cap=ve”  Customers   NetFlix Level 3Can’t  peer  around  them   $Can’t  choose  compe=tor  Exploi=ng  Market  power  posi=on:  Cap=ve  Market     Peering Transit PPWhere  is  this  going?  Is  this  the  right  model?   $ LimeLight PP $ Comcast $ PP Networks Akamai $ NetFlix NetFlix millions of broadband homes 24  
  25. 25. Last  Break     Next  Up:    The  Internet  Peering  Playbook:  The  Art  of  Peering   Aka   The  Tricks  of  the  Trade   25  

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