[171819] in North American Network Operators' Group
Re: Observations of an Internet Middleman (Level3) (was: RIP Network
daemon@ATHENA.MIT.EDU (Hugo Slabbert)
Thu May 15 00:29:17 2014
X-Original-To: nanog@nanog.org
Date: Wed, 14 May 2014 21:29:12 -0700
From: Hugo Slabbert <hugo@slabnet.com>
To: nanog@nanog.org
In-Reply-To: <CAEmG1=rySj5yH94k19zgtuZreZezBaMsMSVkm3P7WWfkpypRhg@mail.gmail.com>
Errors-To: nanog-bounces@nanog.org
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>So, at the end of the week, I *had* been paying $10/mb to
>send traffic through transit to reach the whole rest of the
>internet. Now, I'm paying $5+$4+$4+$5+$2, or $30, and
>I don't have a full set of routes, so I've still got to keep
>paying the transit provider as well at $10.
I would like to agree with you as I'm not a fan (by any stretch) of this ty=
pe=20
of paid peering to enter access networks, but your formula's off. It suppo=
ses=20
that the same bit is traversing multiple paid peering links. The formula (=
if=20
we ignore commits for now) should be something more like:
C(T) =3D R(t) * M(t) + R(1) * M(1) ... + R(n) * M(n)
Where:
C(T) =3D total cost
R(t) =3D transit $/mbit rate
M(t) =3D transit mbps
R(1) =3D paid peering agreement #1 $/mbps rate
M(1) =3D paid peering agreement #1 mbps
R(n) =3D paid peering agreement #n $/mbps rate
M(n) =3D paid peering agreement #n mbps
For your $10/mb transit example, suppose we had 1 Gbps of traffic and so ou=
r=20
transit cost would be $10,000/month. We take your mixed bag of paid peerin=
g=20
and say we give each of those 5 paid peers 100 mbps:
C(T) =3D 500 * 10 + 100 * 5 + 100 * 4 + 100 * 4 + 100 * 5 + 100 * 2
C(T) =3D $7,000/month
So, yes, as long as R(n) is lower than R(t), your overall cost should be lo=
wer,=20
since you're moving some number of mbps from your higher priced transit lin=
k to=20
one or more (slightly) cheaper paid peering links.
Now, as I mentioned, this ignores commits, so it's really more like:
C(T) =3D ( c(t) + R(t) * M(t) ) + ( c(n) + R(n) * M(n) )
Where:
c(t) =3D transit commit $
M(t) =3D transit mbps over commit
c(n) =3D paid peering agreement #n commit $...I've not personally had to de=
al=20
with paid peering so I don't know if commit rates are at all common on them=
,=20
but you can sub or add in other fixed costs e.g. transport to reach the pai=
d=20
peering exchange point
M(n) =3D paid peering agreement #n mbps over commit
So, it starts to get murkier. E.g. if you're not over your transit commit a=
nd=20
now you're shifting traffic off of your transit onto paid peering, you may =
want=20
to lower your transit commits.=20
This also does not account for other potential costs were this type of=20
arrangement to become commonplace, e.g. the additional burden on content=20
providers of maintaining direct business relationships with any access netw=
ork=20
that would require paid peering for preferential/decent quality.
Again: I'm not a fan of some of the possible abuses or strong-arm tactics o=
f=20
this type of arrangement between eyeball networks and content providers (e.=
g. =20
running transit or existing peering links hot to push content providers to =
paid=20
peering to reach the eyeball customers), but the math is not quite so dire =
as=20
it was made out to be.
--
Hugo
On Wed 2014-May-14 01:11:30 -0700, Matthew Petach <mpetach@netflight.com>=
=20
wrote:
>On Sat, May 10, 2014 at 8:04 AM, Rick Astley <jnanog@gmail.com> wrote:
>
>> [...]
>> The reality is an increasingly directly peered Internet doesn't sit well=
if
>> you are in the business of being the middle man. Now if you will, why do
>> transit companies themselves charge content companies to deliver bits? H=
ow
>> is it fair to be in the business of charging companies to receive their
>> bits and hand them to a settlement free peer on the hook to deliver them,
>> but not fair for content to just bypass the transit company and enter a
>> paid peering agreement with the company delivering the bits? In this case
>> paid peering is mutually beneficial to both companies involved and is
>> typically cheaper for the content company than it would cost to send that
>> traffic over transit.
>>
>
>What you're missing is that the transit provider is
>selling full routes. The access network is selling
>paid peering, which is a tiny fraction of the routes.
>If I pay transit provider X $10/mb (i know, not realistic,
>but it makes my math work) to reach the entire internet,
>it might seem reasonable to pay access network C $5/mb
>to hand traffic to them, and bypass the transit provider,
>avoiding potentially congested links.
>
>But then access network A decides they want to cut out
>the middleman as well--so they do the same thing, run
>their ports to transit provider X hot; to avoid that, I can
>pay the cheap price of $4/mb to reach them.
>
>Now access networks F and D want to do the same thing;
>their prices for their routes are $4 and $5/mb, respectively.
>
>Finally, little access provider T wants in at $2/mb for their
>routes.
>
>So, at the end of the week, I *had* been paying $10/mb to
>send traffic through transit to reach the whole rest of the
>internet. Now, I'm paying $5+$4+$4+$5+$2, or $30, and
>I don't have a full set of routes, so I've still got to keep
>paying the transit provider as well at $10. Depending on
>port counts, locations, and commit volumes, your "typically
>cheaper for the content company than it would cost to send
>that traffic over transit" has flown completely out the window.
>It could even end up being many times more expensive to
>handle the traffic that way.
>
>In order for the costs to work out, you'd really need
>to apply a formula along the lines of
>C(n) <=3D T(n) * C(t)
>where
>T(n) =3Dfraction of traffic volume destined for access network X
>C(t)=3Dcost of transit (ie, full routes, reachability to the entire intern=
et)
>C(n)=3Dcost of paid peering to access network X
>
>So, if you're an access network and want to charge
>for paid peering, and you represent 1/20th of my
>traffic, there's no reason for me to pay more than
>1/20th of my transit cost for your routes; otherwise,
>it's more cost effective for me as a business to
>continue to pay a transit provider.
>
>I'm constantly amazed at how access networks
>think they can charge 2/3 the price of full transit
>for just their routes when they represent less than
>1/10th of the overall traffic volume. The math just
>doesn't work out. It's nothing about being tier 1, or
>bigger than someone else; it's just math, pure and
>simple.
>
>Matt
>(currently not being paid by anyone for my time
>or thoughts, so take what I'm saying as purely
>my own thoughts on the matter, nothing more)
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