Global Traffic Exchange among Internet Service Providers (ISPs)



Similar documents
Introduction to Routing

Topic 1: Internet Architecture & Addressing

CS 40, Lecture 3: Internet economics. Ramesh Johari

GLOBAL INTERNET GEOGRAPHY

Timely Trends of Ethernet Technology. Announcing AboveNet s Expanded Metro Ethernet Services

Global IP Network Overview

DATA CENTER INTERCONNECTION SERVICES +

Introduction to The Internet. ISP/IXP Workshops

Introduction to The Internet

Pricing the Internet. Geoff Huston

Commercial considerations in IP interconnection agreements

Internet services pricing under usagebased cost allocation: Congestion dependence

IP interconnection issues

Best Effort gets Better with MPLS. Superior network flexibility and resiliency at a lower cost with support for voice, video and future applications

How To Connect To Telx Dia (Dia) For Free

The Role IXPs and Peering Play in the Evolution of the Internet

BGP. 1. Internet Routing

Peering in Hong Kong. Che-Hoo CHENG CUHK/HKIX

TELEGEOGRAPHY REPORT EXECUTIVE SUMMARY. Executive Summary

Chapter 9. Internet. Copyright 2011 John Wiley & Sons, Inc 10-1

RTMA Working Group Agenda. Overview Speakers Discussion

Interconnections on the Internet: Exchange Points

Overview of recent changes in the IP interconnection ecosystem

The Evolution of Inter Carrier Settlements

Hong Kong Internet Exchange (HKIX)

Executive Summary. Internet Traffic and Capacity

Versalar Switch Router Market Opportunity and Product Overview

Workshop on Infrastructure Security and Operational Challenges of Service Provider Networks

Competition and Cooperation Among Internet Service Providers

Secure IP Forwarding in the Security Industry - White Paper

On Characterizing BGP Routing Table Growth Tian Bu, Lixin Gao, and Don Towsley University of Massachusetts, Amherst, MA 01003

TeleGeography Workshop: International Market Trends

Spring Conference. Growing Business Services Revenue in a Downturn Economy Panel Session. COMPTEL Spring, March 2009, Dallas, TX

CARRIER MPLS VPN September 2014

Confessions of a Telecommunications Provider. Five things you MUST know about Global Voice over IP (VoIP) Providers

@Home Cable Deployment Experiences or

Internet Operations and the RIRs

Blue 102. IP Service Architecture Futures. Geoff Huston May 2000

City of Seattle. Paul Schell, Mayor. Department of Information Technology Marty Chakoian, Director and Chief Technology Officer

Case Study: Global MPLSbased. Network

Pacnet Premium Dedicated Internet Access Dedicated Internet Access for Web-Centric Enterprises

Simple Multihoming. ISP Workshops. Last updated 30 th March 2015

Measuring IPv6 Deployment. Geoff Huston APNIC December 2009

IPv6 The Big Picture. Rob Evans, Janet

There are essentially two ways to create a Peering Policy: 1) select the clauses that best meet your needs.

Dove siamo? Architecture of Dynamic Routing

IPv6 and 4-byte ASN Update

Preparing Your IP network for High Definition Video Conferencing

Network Level Multihoming and BGP Challenges

WHY CHOOSE COX BUSINESS FOR YOUR COMPANY S NETWORK SERVICE NEEDS?

List of Figures Analysis Executive Summary 1. International Call Volumes and Growth Rates, Compounded Annual Traffic Growth Rate by

GLOBAL BANDWIDTH RESEARCH SERVICE EXECUTIVE SUMMARY. Executive Summary

Interconnection and Traffic Exchange on the Internet

Regional Interconnection Strategy for Africa. Regional Peering and Interconnection Economics

VoIP Virtual Private Networks: Bringing the Benefits of Convergence to the Enterprise

Company presentation January 2013

Analysis of Internet Topologies: A Historical View

NTT - A global IPv6 deployment case study

What's inside the cloud?!

Executive Summary. Metro Capacity

Understanding Large Internet Service Provider Backbone Networks

AboveNet Virtual Data Center

REVIEW AND ANALYSIS OF INTERNET TRAFFIC AND ITS IMPLICATIONS ON THE ROOT NAME SERVER ARCHITECTURE

The Value of Peering. ISP/IXP Workshops

Sprint Global MPLS VPN IP Whitepaper

Trends in Global Capacity Availability and Trading. Bruce Girdlestone VP Network Trading Band-X

We keep internet traffic flowing Frank Ip VP of Marketing and Business Development

KEYWORDS Cisco, Telx, Neutral Tandem, Ethernet Exchange, bandwidth

ADSL or Asymmetric Digital Subscriber Line. Backbone. Bandwidth. Bit. Bits Per Second or bps

FACT SHEET INTERNATIONAL SERVICES GLOBAL INTERNET ACCESS (GIA)

TeleGeography Workshop: International Market Trends

Internet Routing Protocols Lecture 04 BGP Continued

TELEGEOGRAPHY REPORT EXECUTIVE SUMMARY. Executive Summary

WHITEPAPER. VPLS for Any-to-Any Ethernet Connectivity: When Simplicity & Control Matter

Evaluating The Competitive Effects Of Mergers Of Internet Backbone Providers

BITAG Publishes Report: Differentiated Treatment of Internet Traffic

Ethernet: What is Working and What s Not? Monday, April 16, Ethernet

Two Papers on Internet Connectivity and Quality. Abstract

Internet Service Providers: Peering and Charging

INTERNET ORGANIZATION OVERVIEW OF THE INTERNET'S ORGANIZATION AND MAIN STANDARD BODIES. Internet Organization. Peter R. Egli INDIGOO.COM. indigoo.

Protocols. Packets. What's in an IP packet

Computer Networking Networks

What is AfriNIC, IPv4 exhaustion & IPv6 transition

How It Works: 101: Naming, Addressing, Routing ALAIN DURAND ICANN

US Business Services 2015

International Dialing and Roaming: Preventing Fraud and Revenue Leakage

The Evolution of Ethernet

IPv6 Address Planning

Confessions of a Telecommunications Provider. Five things you MUST know about Global Voice over IP (VoIP) Providers

Network Neutrality Revisited: Challenges and responses in the EU and in the US

VoIP Overview Wayne Fonteix - AT&T Presented to: NARUC Committee on Telecommunications NARUC Committee on Finance and Technology February 25, 2003

Simple Multihoming. ISP/IXP Workshops

Analysis of Internet Topologies

The Internet. On October 24, 1995, the FNC unanimously passed a resolution defining the term Internet.

1.264 Lecture 34. Telecom: Connecting wired LAN, WAN. Next class: Green chapter 17. Exercise due before class

COMCAST ENTERPRISE SERVICES PRODUCT- SPECIFIC ATTACHMENT ETHERNET DEDICATED INTERNET SERVICES

Sprint s Partner Interexchange Network (PIN) A New Approach to Scalable Voice Peering

IP TRANSIT SERVICE SCHEDULE - Australia - (Including VOCUS INTERNET EXPRESS)

WAN Traffic Management with PowerLink Pro100

Transcription:

Global Traffic Exchange among Internet Service Providers (ISPs) OECD - Internet Traffic Exchange Berlin, June 7, 2001 J. Scott Marcus, Chief Technology Officer (CTO)

Economics of Internet Interconnection Background Internet interconnection in North America International Internet interconnection Economic modeling of Internet backbone peering The off-net pricing principle Implications for international interconnection Scaling challenges to the peering system Cross-provider differentiated services, measurements and SLAs

Internet Interconnection in North America Historical roots Peering and transit Shared and direct peering Shortest exit Hierarchical structure

Privatization of the Internet (NSF 93-52) ISP ISP ISP Backbone ISP ISP ISP NAP Backbone ISP Chicago NAP NAP New York ISP San Francisco Los Angeles Backbone ISP Washington DC NAP ISP Atlanta Dallas Backbone ISP Copyright (c) 1999 by Addison Wesley Longman, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the publisher.

Peering and Transit Peering is usually a bilateral business and technical arrangement, where two providers agree to accept traffic from one another, and from one another s customers (and thus from their customers customers). Peering does not include the obligation to carry traffic to third parties. Transit is usually a bilateral business and technical arrangement, where one provider (the transit provider) agrees to carry traffic to third parties on behalf of another provider or an end user (the customer). In most cases, the transit provider carries traffic to and from its other customers, and to and from every destination on the Internet, as part of the transit arrangement. Peering thus offers a provider access only to a single provider s customers; transit, by contrast, usually provides access at a defined price to the entire Internet. Historically, peering has often been done on a bill-and-keep basis, without cash payments, where both parties perceive roughly equal exchange of value; however, there is often an element of barter.

Shared and Direct Peering A few shared global traffic exchange points. Smaller domestic shared traffic exchange points for regional concentration and exchange of traffic. Direct traffic exchange carries most Internet backbone traffic. Even though shared traffic exchange points are losing market share, their traffic is likely to continue to grow in absolute terms. Carrier hotels and fiber interconnects - an emerging trend that seeks to provide the best of both worlds. Whether shared or direct, the prevailing pattern is shortest exit routing - the sending provider hands off traffic at the point most convenient to the sender.

Shared and Direct Peering Backbone ISP Router Direct Interconnection Router Router Backbone ISP Router Router Direct Interconnection Router Router Backbone ISP Router Shared Traffic Exchange Point

Shortest Exit ( Hot Potato ) Routing Backbone ISP Shared Traffic Exchange Point San Francisco Los Angeles Chicago New York Washington DC Shared Traffic Exchange Point Web Site Dallas Backbone ISP Atlanta Copyright (c) 1999 by Addison Wesley Longman, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the publisher.

Backbone and Secondary Peering Backbone peering interconnects providers that have no need for a transit relationship. It provides the only interconnection between those providers. Secondary peering interconnects providers who would otherwise exchange traffic through some transit connection. Secondary peering is an economic optimization, reducing traffic over the transit connection.

Fundamental Economics of a Local or Regional ISP Larger ISP or Backbone Transit Connection Regional or Local ISP Concentration to a larger ISP or backbone provider with global connectivity by means of a concentrated, high bandwidth connection Many remote locations connect to a regional or local ISP with individual, low bandwidth connections

Secondary Peering Larger ISP or Backbone Larger ISP or Backbone Transit Connection Transit Connection Regional or Local ISP Regional or Local ISP The secondary peering connection will tend to exist if the cost of the connection to each ISP is less than the money each saves due to reduced transit traffic.

A Hierarchical View of the Internet Backbone Backbone Backbone Backbone Backbone Backbone Backbone Default Free Zone Backbone ISPs ISPs Customers Copyright (c) 1999 by Addison Wesley Longman, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the publisher.

A Hierarchical View of the Internet Upstream IBP Peering Connection IBP ISP ISP Downstream ISP cf. Lixin Gao

Negotiations for North American Backbone Internet Interconnection Typical US backbone interconnection guidelines Bi-coastal US presence, with multiple potential points of interconnection Significant transcontinental bandwidth Consistent routes at all locations Competent staff, professional 7 x 24 operation Rough balance of ingress/egress traffic Sufficient scale to justify transaction costs Where criteria are not met, a backbone may: decline to exchange traffic, OR expect cash or non-cash compensation in return Backbone providers negotiate traffic exchange terms and conditions on a case by case basis.

Emerging Global Trends The traditional hub and spokes system Traffic exchange trends in Europe Global deployment International diffusion of users and content

Traditional Hub and Spokes System Regional #2 Regional #1 Regional #3 NSP #1 ISP #1 ISP #3 Asian ISP ISP #2 NAP San Francisco Los Angeles NSP #2 NSP #3 Chicago NAP NAP New York Washington DC NAP ISP #4 Non-U.S. ISP pays vbns Dallas Atlanta Non-U.S. ISP pays European ISPs Copyright (c) 1999 by Addison Wesley Longman, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the publisher.

Former Hub and Spokes in Europe French ISP U.S. Backbone German ISP

Internet Traffic Exchange in Europe Today French ISP U.S. Backbone Interconnection Point German ISP

Factors Driving European Evolution Decline in street price of circuits within Europe due to deregulation. Declining cost of transoceanic capacity. Increased number and density of customers and content (and caching). Improved number and distribution of shared peering points. Deregulation of European telecoms, and recognition of the need to minimize regulatory barriers to Internet growth. New transit services terminated in Europe and elsewhere.

Global Internet Backbone Deployment Overseas Point of Presence (POP) European ISP pays Regional #2 Regional #1 Regional #3 NSP #1 ISP #1 ISP #3 Asian ISP ISP #2 NAP San Francisco Los Angeles NSP #2 NSP #3 Chicago NAP NAP New York Washington DC NAP ISP #4 Atlanta Backbone pays vbns Dallas Backbone pays Copyright (c) 1999 by Addison Wesley Longman, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the publisher.

International Diffusion 250 Number of Users Online Worldwide Millions of Users 200 150 100 50 0 1995 1996 1997 1998 1999E United States Rest of World Source: IDC, Merrill-Lynch (Kende, FCC)

Motivations for International Pressure for Cost Sharing (ICAIS) Mistaken perception that U.S.-based backbones discriminate against overseas providers in our interconnection policies. Dissatisfaction with allocation of transoceanic circuit costs, which often are fully carried by the non-u.s.-based provider.

An Excerpt from Genuity s Guidelines 1. Presence at three or more Shared Interconnection Points listed above (two of which must be MAE-East ATM and MAE-West ATM), for Domestic ISPs; presence at two or more Shared Interconnection Points listed above for International ISPs. 2. For domestic ISPs, United States coast-to-coast nationwide backbone of at least 155Mbps. 3. Consistent route announcements at all exchange locations. 4. Experienced, professional Network Operations Center staffed 24x7. 5. Loose Source Record Route (LSRR) capability at core border routers on network. 6. For domestic ISPs, roughly balanced traffic. 7. A minimum Internet traffic exchange of 1 Mbps with Autonomous System 1. 8. Willingness to enter into a formal Internet Interconnection Agreement. http:///infrastructure/interconnection.htm

Economic Modeling of Internet Backbone Peering Analytical framework The off-net pricing principle Implications for international interconnection

Analytical Framework Define: c o as cost of origination c t as cost of termination a as an access charge levied on the sender Due to shortest exit, c t > c o Then cost for the originating network is c o + a cost for the terminating network is c t - a Network i Network j

Impact of Access Charges In a bill-and-keep system, access charges are zero. With equal access charges and symmetric traffic, net access charges are still zero. Providers will, however, view their marginal costs quite differently. (Laffont/Rey/Tirole)

The Off-Net Pricing Principle Under a broad range of conditions, marginal price should equal marginal cost. Providers will tend to charge the same for on-net traffic as for off-net traffic, i.e. there are no strong incentives for price discrimination.

Implications for International Interconnection Where a group of customers have distinguishable costs that are higher than those of other customers, the model predicts that marginal prices will be higher to exactly offset the higher costs. In the absence of market power, there is in fact no way for the ISP to absorb the cost difference without reflecting it in the price. This prediction is consistent with typical practices of USbased ISPs, both within the US and overseas.

Scaling Issues AS Number growth IPv4 address growth Routing table growth

Tony Bates s Data AS Growth 9000 8000 7000 6000 Active ASes 5000 4000 3000 2000 1000 0 Food

80000 70000 60000 50000 40000 30000 20000 10000 0 Exponential Growth of Autonomous System (AS) numbers R2 = 0.9957 ASNs to Oct2000 ASNs since Oct2000 Expon. (ASNs to Oct2000) Source: Scott Marcus, Genuity 10/01/1996 10/01/1997 10/01/1998 10/01/1999 10/01/2000 10/01/2001 10/01/2002 10/01/2003 10/01/2004 10/01/2005 AS Numbers (ASNs)

Exponential vs Quadratic (Bates Data) 25000 y = 6E-14e 0.0011x 20000 R 2 = 0.9957 15000 10000 ASNs to Oct2000 ASNs since Oct2000 Expon. (ASNs to Oct2000) Poly. (ASNs to Oct2000) y = 0.002x 2-138.37x + 2E+06 R 2 = 0.9962 5000 0 10/01/1996 01/01/1997 04/01/1997 07/01/1997 10/01/1997 01/01/1998 04/01/1998 07/01/1998 10/01/1998 01/01/1999 04/01/1999 07/01/1999 10/01/1999 01/01/2000 04/01/2000 07/01/2000 10/01/2000 01/01/2001 04/01/2001 07/01/2001 10/01/2001 01/01/2002 04/01/2002 07/01/2002 10/01/2002 01/01/2003 Active ASes (Clean)

Chicken Little was Wrong! This is far simpler to remedy than IPv4 address exhaustion, because the solution need not impact end systems (hosts); the solution need not impact DNS; and the solution need not impact routers unless they speak BGP-4. Any solution is complicated by the need for backward compatibility and phased migration. Time until exhaustion is nonetheless sufficient to architect, design, implement and deploy solutions. Cisco and Juniper are reportedly well into implementation.

The RIRs Recognize the Need for Forecasting Continuing need to further refine projections. Need for forward-looking proactive forecasting on a regular basis not only for AS numbers, but also for route table entries and IPv4/IPv6 addresses. Forecasting needs to incorporate allocation data from all three RIRs (APNIC, ARIN, RIPE NCC). Forecasting needs to be institutionalized by the RIRs themselves, with data readily available to independent researchers.

The Team Assembled by ARIN Frank Solensky Gotham Networks kc claffy CAIDA Scott Marcus Genuity Active contributions and support by APNIC and RIPE NCC

IPv4 Address Allocations Cumulative IPv4 Addresses Allocated 2.5 2. IPv4 Addresses (billions ) 1.5 1. RIPE ARIN APNIC.5. 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Source: Solensky/Marcus/Claffy

Route Table Growth Source: Geoff Huston

Applications Have Distinct Needs E-mail is tolerant of delay, but every bit of data must ultimately be delivered correctly. For real time WWW traffic, delay must be low, but moderate variability of delay is permissible. Real time Voice over IP (VoIP) and video are tolerant of modest loss, but intolerant of large and variable delay.

Cross-Provider Differentiated Services Internet services today are best-efforts. Commoditized service, with marginal price equal to marginal cost. Differentiated services are of limited value today. Best-efforts are good efforts, so little incremental advantage for differentiated services. Customers have no demonstrated propensity to pay a premium for better CoS for data services. Better CoS for real time voice and video still interesting. CoS today is limited to a single provider s network.

Cross-Provider Measurements and SLAs Potentially valuable for best-efforts traffic; essential for Differentiated Services. Provider responsibility ends today at the peering interconnection point. No consistent measurement framework. No business arrangements to incent SLA adherence between peer networks. Information sharing of proprietary data is a difficult but not intractable problem.

Summary The distinction between peering and transit is vital to an understanding of the underlying business models that drive global Internet connectivity. The business models that have evolved around peering, in North America and globally, are complex but rational. Peering business relationships have adapted quickly in response to economic or regulatory stimuli, and will continue to evolve.

References Cremer, Rey and Tirole, Connectivity in the Commercial Internet, presented at Competition and Innovation in the Personal Computer Industry, San Diego, April, 1999. Marcus, Designing Wide Area Networks and Internetworks: A Practical Guide, Addison Wesley Longman, 1999. Chapter 14, which describes peering and transit, is available at http:///about/executives/marcus_bio.htm Huston, Interconnection, Peering and Settlements, http://www.isoc.org/inet99/proceedings/1e/1e_1.htm Laffont and Tirole, Competition in Telecommunications, MIT Press, 2000. General analysis of the economics of telecommunications pricing. Kende, The Digital Handshake: Connecting Internet Backbones, FCC, 2000. Gao, On Inferring Autonomous System Relationships in the Internet, IEEE GlobeCom 2000, San Francisco, November, 2000. Milgrom, Mitchell, and Srinagesh, Competitive Effects of Internet Peering Policies, presented at the American Economics Association, January, 2001. Laffont, Marcus, Rey and Tirole, Internet Interconnection, American Economics Review, May, 2001.