Peering 101         and the Peering Simulation Game                             William B. Norton                    Execu...
The                                                                 New Book                                           Pla...
The Global lnt*m*t Pwfing Eco+ywunr.    ScmefSP P*<rr? Miybock T.Ki.10F   volution   erf   Initio*.  FWnoq                ...
DrPeering.net Peering ResourcesInternet Service Providers and Peering        Internet Transit Pricing Historical and Proje...
Peering 101Connecting to the Edge of the Internet (aka Internet                     Transit)Connecting to the Core of the ...
Connecting to the Edge of the Internet• Definition: Internet Transit is the business  relationship whereby an Internet Ser...
nternet Transit Service Mode           Routing        Advertisements                               Graphical notation
Equivalent Notation for Transit                     $                              Metering-95 t h percentile
Internet Transit Billing Calculation    (95th Percentile Measurement)Metered Internet Transit Service                l    ...
Source: DrPeering.netS/Mbps                    Internet Transit Prices (1998-2015)$1,400$1,200             $12O0/MDpS51.00...
Connecting to the Core of the          nternet        Internet Peering
Why Peering?"Internet Transit is so inexpensive, why do weneed anything else?"         Monthly Transit Fees               ...
Global                                                 Internet                                                     destin...
nternet Peering DefinitionDefinition: Internet Peering is the businessrelationship whereby two companiesreciprocally provi...
nternet Peering notation Of-0                           3 key notions about peering
3 Key points about Internet Peering1) Internet Peering is not a transitive relationship2) Internet Peering is not a perfec...
Top Five Motivations for PeeringReduce Transit CostsBetter End-User ExperienceControl Over RoutingMake more $$ - Usage Bas...
The Business Case for Peering                                     Colocation $1000Ano                                     ...
Mbps      Peerin Cost                       ng          100   $110.00 per Mbps                 $55.00 per Mbps          20...
$/Mbps   Peering vs Transit                                   Assumptions                             Far                 ...
Some context:The Internet Peering Ecosystem  Internet viewed as a Global Internet           Peering Ecosystem
Def: Global Internet Peering Ecosystem consists of a set     of interconnected internet regions (countries).       Global ...
Ecosystem Member: Tier 1 ISP                      Def: A Tier 1 ISP is an ISP                         that has access to t...
Ecosystem Member: Tier 2 ISP           Def: A Tier 2 ISP is an ISP     that has to purchase Transit to access        some ...
Content Providers    Def: A Content Provider focuses on     content development and does not          sell access to the I...
Internet Peering EcosystemTraffic and $ flow up     Active Peering Groups        Peering Forums                           ...
2) Definition of Peering:                             Quiz                            4      Tier 1 ISP X1) Definition of ...
Apply Defs: Peering Dynamics & Motivations                                                                         No, lik...
The Peering Simulation Game   Lets exercise these definitions
The PlayersInternet Service Provider A- Peering CoordinatorInternet Service Provider B- Peering CoordinatorInternet Servic...
3 HelpersTransit Provider XTransit Provider YExchange Point Operator
ran it Provider                      The Peer ng Gam                                        B         X                   ...
3 Rules1. Goal: Maximize bank holdings. Make money by   acquiring customers and reduce transit costs by   peering2. Play: ...
D rolls 1,                             Late entrant heading to IXE         YC           Receives revenue on 2 squares (2*$...
Scoreboard after Round 1ISP A: $9,000ISP B: $0ISPC: $3,000ISPD: -$13,000
A rolls 3,                                    Attaches to IXW                      Receives revenue on 9 squares (9*$2000)...
ransit Provider            ffffff              A Position                                   B      B        B             ...
Lets play!              WELCOME TO BILLAND4 ISPs that have never played beforeOpen Board$35,000 VC Funding     ^      #^  ...
Play the Peering Simulation Game...                                                                                       ...
Peering 101 and the peering simulation game
Peering 101 and the peering simulation game
Peering 101 and the peering simulation game
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Peering 101 and the peering simulation game

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African Peering and Interconnection Forum 2010

Despite the growing regional infrastructure, most of the cross-border Internet traffic exchange is done in Europe and North America. This is a clear indication that the satellite routing policies are still predominant in a submarine and terrestrial fiber setting.

A visible example is a trace of the path followed by an Internet packet from Nairobi, Kenya to Kigali, Rwanda. The packet from Nairobi will go to Europe then back to Kigali. The anomaly is that Rwanda is a landlocked country, and has its international fiber connectivity terrestrially connected through the Kenyan coastal city of Mombasa.

The scenario is replicated across the entire region and serves a barrier to growth, innovation and operational efficiency. Of most concern is, cross-border and regional communications are entirely dependent on global connectivity. Africa Peering and Interconnection Forum is a two day forum that aims to address the key Interconnection opportunities and challenges that exist in the region

AfPIF Session 1: Peering vs Transit Economics

An update of the infrastructure status covering IXPs, terrestrial to submarine cables in the region will be provided. Panellists will discuss the economic concepts of peering and transit from an operator’s perspective in order to be to introduce the participants to main interconnection concepts and how it impacts on their operational efficiency.

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Peering 101 and the peering simulation game

  1. 1. Peering 101 and the Peering Simulation Game William B. Norton Executive Director, DrPeering Excerpts from The Internet Peering Plavbook: Connecting to the Core of the InternetAfPIF 2Accra, GhanaAugust 8, 2001
  2. 2. The New Book Playbook lOyrs in the making $500K Travel 500Kfreq flyer miles Every continent Every Internet Ops Forum What is your working definition Of Internet Peering? Of Internet Transit? What are the motivations to peer or not? What are the peering processes? Who do you peer with? Connecting to the Core of the Internet Who are the players? What are the Peering Tactics? WHEN DOES PEERING MAKE SENSE? TRhtt EiTiiasiTiSiTDg Etstosplteiim feor After White Paper walkthroughs Resources to share back to the community CD@ydl (D§)inni|p(SJD^inii From the Author of the Internet Peering White Papers William B. Norton
  3. 3. The Global lnt*m*t Pwfing Eco+ywunr. ScmefSP P*<rr? Miybock T.Ki.10F volution erf Initio*. FWnoq otMt%H Tr.ir.wi vwot. Mf^dbaV. Kow^iH^h004**riliilw.ii^l FjKhart^l^Qipi Bluff hSUCS l Y a ^ M«nix4.*irr.
  4. 4. DrPeering.net Peering ResourcesInternet Service Providers and Peering Internet Transit Pricing Historical and ProjectionsA Business Case for Peering Modeling the value of an Internet Exchange PointAbout the White Paper Process NANOG HistoryThe Art of Peering - The Peering Playbook Peering: Motivations to PeerThe Art of Peering - The IX Plavbook A Study of 28 Peering PoliciesChief Technical Liaison Peering Simulation GameEcosystems: 95th Percentile Measurement for Peering: Top 10 Ways to Contact PeeringInternet Transit CoordinatorsAsia Pacific Peering Guidebook Peering: Top 10 Reasons NOT to peerEvolution of the U.S. Peering Public vs Private Peering - the Great DebateEmerging Video Internet Ecosystems The Folly of Peering RatiosEuropean vs US Internet Exchange Points Top 9 IX Selection CriteriaInternet DataCenter Build vs Buy Decision Video Internet - The Next Wave of MassiveInternet Service Providers and Peering Disruption to the U.S. Peering Ecosystem All freely available
  5. 5. Peering 101Connecting to the Edge of the Internet (aka Internet Transit)Connecting to the Core of the Internet (aka Internet Peering) The Economic Benefits of Peering IXP Operators - Lets talk off-line - lots of material to share Defs: Internet is a..
  6. 6. Connecting to the Edge of the Internet• Definition: Internet Transit is the business relationship whereby an Internet Service Provider provides (usually sells) access to the global Internet.• Definition: An Internet Service Provider (ISP), also called a "Transit Provider/ is an entity that provides (usually sells) access to the Internet. Transit Service Model
  7. 7. nternet Transit Service Mode Routing Advertisements Graphical notation
  8. 8. Equivalent Notation for Transit $ Metering-95 t h percentile
  9. 9. Internet Transit Billing Calculation (95th Percentile Measurement)Metered Internet Transit Service l Upstream (Transit) Provider 5-minute samples to •. • s . End Of Month Sort highest 95th Percentile Sample (Mbps) * Internet Transit Price ($/Mbps) lowest = Monthly Cost of Internet Transit Trends: Transit Price Drops
  10. 10. Source: DrPeering.netS/Mbps Internet Transit Prices (1998-2015)$1,400$1,200 $12O0/MDpS51.000 $800 $600 $400 $200 S1207Mbps S12/Mbps $3,25^1^ S0.94^lbos $0 i i 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 That is Internet Transit: Simple
  11. 11. Connecting to the Core of the nternet Internet Peering
  12. 12. Why Peering?"Internet Transit is so inexpensive, why do weneed anything else?" Monthly Transit Fees Transit Transit Volume Price Growth Drops year 1 year 2 year 3 year 4 time Where is that traffic going?
  13. 13. Global Internet destination) Internet Transit ServiceCosts of PeeringDirer*2)Cc*ocation3) Equipment4) Peering Fees Internet Transit Service CXhor doslintffons Direct interconnect=peering
  14. 14. nternet Peering DefinitionDefinition: Internet Peering is the businessrelationship whereby two companiesreciprocally provide access to each otherscustomers. Peering Peering I WestNei EastNet MidNet Rouling Table Routing Table Routino Table o o o • # o o (after peering) (after peering) (after peering)
  15. 15. nternet Peering notation Of-0 3 key notions about peering
  16. 16. 3 Key points about Internet Peering1) Internet Peering is not a transitive relationship2) Internet Peering is not a perfect substitute for nternet Transit3) Internet Peering is typically settlement-free Peering Peering 1 . . WestNel E a si Net Routing Table MidNet Routing Table Routing Table o (after peering) (after peering) (alter peering) Why Peer? 5 Motivations..
  17. 17. Top Five Motivations for PeeringReduce Transit CostsBetter End-User ExperienceControl Over RoutingMake more $$ - Usage Based BillingMarketing Benefits of Peering Comes down to business: Lets talk $$$ motivation
  18. 18. The Business Case for Peering Colocation $1000Ano Peering Port $2000/mo 10G Transport $6000/mo 10G Equipment S2000/mo Peer Peer -»Source: 2010 DE-CIX Member Meeting discussions That is Internet Transit: Simple
  19. 19. Mbps Peerin Cost ng 100 $110.00 per Mbps $55.00 per Mbps 200 300 $36.67 per Mbps Cost of Peering 400 $27.50 per Mbps 500 $22.00 per Mbps Assumptions Far 600 $18.33 per Mbps Transport into IX: $6,000 per month 700 $15.71 per Mbps Colocation Fees: $1,000 per month 800 $13.75 per Mbps Peering Fees: $2,000 per month Equipment Costs: $2,000 per month I 900 $12.22J per Mbps Total Cost of Peering: $11,000 per month 1000 $11.00 per Mbps 1100 $10.00 per Mbps 1200 $9.17 per Mbps 1300 $8.46 per Mbps 1400 $7.86 per Mbps "If you can peer 1000Mbps for free, but it costs 1500 $7.33 per Mbps You $11,000 per month to build into the 1600 $6.88 per Mbps Internet Exchange Point, the cost of peering is $ll,000/1000Mbs=$10/Mbps." 1700 $6.47 per Mbps 1800 $6.11 per Mbps 1900 $5.79 per Mbps 2000 $5.50 per Mbps 2100 $5.24 per Mbps
  20. 20. $/Mbps Peering vs Transit Assumptions Far Transport into IX: $6,000 per month Colocation Fees: $1,000 per month Peering Fees: $2,000 per month Equipment Costs: $2,000 per month Total Cost of Peering: $11,000 per month Peering Break-Even Point Unit Peering Cost = Price ol Transit Effective Peering Bandwidth Transit Price Effective Peering Range
  21. 21. Some context:The Internet Peering Ecosystem Internet viewed as a Global Internet Peering Ecosystem
  22. 22. Def: Global Internet Peering Ecosystem consists of a set of interconnected internet regions (countries). Global Internet Peering Ecosystem Characteristics of these Ecosystem Organisms?
  23. 23. Ecosystem Member: Tier 1 ISP Def: A Tier 1 ISP is an ISP that has access to the ENTIRE Internet Region Routing Table solely via Free Peering Relationships (Doesnt buy transit from anyone to reach any destination in the Internet Region.) Motivation: Is NOT motivated to Peer in region to reduce transit fees, Is NOT motivated to peer with anybody else. Behavior: "Restrictive" Peering *def: Policy
  24. 24. Ecosystem Member: Tier 2 ISP Def: A Tier 2 ISP is an ISP that has to purchase Transit to access some part of the Internet Region. Motivation: Is motivated to Peer in region to reduce transit fees. Behavior: "Open" Peering or "Selective" Peering Policy Active in Peering Forums
  25. 25. Content Providers Def: A Content Provider focuses on content development and does not sell access to the Internet. Motivation: SLAs w/well known ISP Behavior: "No Peering" Policy
  26. 26. Internet Peering EcosystemTraffic and $ flow up Active Peering Groups Peering Forums Content Providers IX Meetings Test: Apply defs.
  27. 27. 2) Definition of Peering: Quiz 4 Tier 1 ISP X1) Definition of Transit: Content Provider C3) Definition of an "Open" Peering Policy:4) Definition of a "Selective" Peering Policy: _5) Definition of a "Restrictive" Peering Policy:
  28. 28. Apply Defs: Peering Dynamics & Motivations No, like $, & I Like customer B Synch Point: You have all the definitions needed to predict behavior in the Peering Ecosystem.
  29. 29. The Peering Simulation Game Lets exercise these definitions
  30. 30. The PlayersInternet Service Provider A- Peering CoordinatorInternet Service Provider B- Peering CoordinatorInternet Service Provider C- Peering CoordinatorInternet Service Provider D- Peering Coordinator
  31. 31. 3 HelpersTransit Provider XTransit Provider YExchange Point Operator
  32. 32. ran it Provider The Peer ng Gam B X X DTransit Provider Y:
  33. 33. 3 Rules1. Goal: Maximize bank holdings. Make money by acquiring customers and reduce transit costs by peering2. Play: Roll the dice and expand your network by selecting that many adjacent "squares" of customers^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ M for each customer square you own^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ f f l f o r each square of traffic that other ISPs own3. If at Exchange Point, two ISPs can negotiate peering: - $2000 recurring cost and loss of 2 turns, ISPs negotiates who covers the costs of peering - Peering ISPs do not have to pay transit for each others squares starting the next turn Q U ^ round.
  34. 34. D rolls 1, Late entrant heading to IXE YC Receives revenue on 2 squares (2*$2000) Pays Transit on others squares (17*$1000) $4,000 - $17,000 = -$13,000 D DTransit PrxbviderY:
  35. 35. Scoreboard after Round 1ISP A: $9,000ISP B: $0ISPC: $3,000ISPD: -$13,000
  36. 36. A rolls 3, Attaches to IXW Receives revenue on 9 squares (9*$2000) Pays Transit on others squares (13*$1000) $18,000 - $13,000 = $5,000 Wants to peer with C - split costs? YES: -$1,000 + both lose a turn Neither has to pay transit to each other!Transit PrxDviderY:
  37. 37. ransit Provider ffffff A Position B B B B 9 Revenue squares 1 lost turn Peering w/C reduced cost $8000/turn B rolls 6, Attaches to IXE*IXN Receives revenue on 10 squares (10*$2000 Pays Transit on others squares (21*$1000) $20,000 - $21,000 = -$1,000 Wants to peer with A - split costs? NO: You pissed me off, Yes: if $0 & B lose both turns Both walk awayTransit PrxDviderY:
  38. 38. Lets play! WELCOME TO BILLAND4 ISPs that have never played beforeOpen Board$35,000 VC Funding ^ #^ i ¥ = $iooo — , .$25,000 VC Funding . >1UUUWe want to hear your fhougnt process ana peering negotiationsWinner- prize WINNER: At 5:25?PM we will stop and assume that every roll was a "3" from that point on out to 12 rounds..
  39. 39. Play the Peering Simulation Game... IM 1 J Worksheet i & • • » to* n o r IACW(<*I • : :O N l V V W I V i l 1 If • m»#-4#T»»^ 1 • • Worksheet

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