[Air-l] peering post

Bram Dov Abramson bda at bazu.org
Sun Mar 11 19:37:44 PDT 2007


Nancy Paterson <Nancy.Paterson at senecac.on.ca>, 11.03.07:
> Bram, you missed ENRON (the largest failure in corp history) its not 
> clear to what extent their engaging in bandwidth trading contributed 
> to their demise but it really is not relevant - ENRON was a 
> significant corp failure. They created the first bandwidth trade.

No, I don't think it's accurate to say that Enron participated in "a 
commodity market in packet-based bandwidth".  From what I recall Enron 
traded only dark and lit fibre (specifically, SONET).  There was some 
talk of Internet bandwidth, but I don't believe Enron ever went 
forward with that.  If you widen your ambit beyond "packet-based 
bandwidth", by which I assume you intend "Internet bandwidth" -- ATM 
and frame relay networks are packet-based, but not really relevant 
here -- then you could take in the sorts of things Enron was doing.

Because Enron hoped that growth in demand for Internet bandwidth would 
help create an environment in which the sort of underlying bandwidth 
it was producing, selling, and buying could be commoditised, I think 
this would remain true to your topic -- as long as the two network 
layers in question were not conflated.  They are different in a number 
of important ways, particularly geographically: "raw" bandwidth 
involves city pairs (point to point); Internet transit is usually 
one-ended.

> transit IS peering - just for fee

That seems an unusual use of these terms to me -- generally they are 
counterposed such that "peering" is a settlement-free form of transit 
where, as the trade-off, traffic destined only to the peer is 
delivered.  In other words: pay me for me to deliver all traffic to 
the rest of the Internet, and vice versa (transit); free-peer with me 
to deliver all the traffic you've got that goes to my end-users, and 
vice versa (peering).

Some providers make "paid peering" available, a sort of halfway step 
-- ie: pay me less than transit to deliver all traffic to my 
end-users, etc.  See, for instance, AOL, who apparently does this 
(which, given the nature of paid-peering and of AOL, respectively, 
makes sense): <http://www.atdn.net/paid_peering.shtml>.

>> Don't get me wrong, though!  This is one of a number of important areas to
>> look at.  I question whether it is the most significant or even an
>> extremely significant cost driver, relative to others, in the
>> international context in which you want to operate -- I suspect that other
>> cost drivers, most of them related to state-sponsored chokeholds, tend to
>> be both more determinative, and highly connected, to this issue.  But
>> there is lots to be said and lots being said on this topic, with a number
>> of interesting approaches in recent years to try and bring transparency to
>> this domain.
>
> Thanks for the book references
> I'm not looking at anti-trust but at transparency in peering agreements
> - and how this may be able to happen

Yes.  I don't know that it is useful to cloister these from one 
another quite so absolutely, though.  Typically transparency in 
bilateral commercial relations is either entered into at the behest of 
the parties themselves, or mandated by some third party with varying 
levels of suasion -- "in the shadow of", be it the shadow of a 
community of network operators, best practice guidelines promulgated 
by some formal association, shared memberships in a network facility 
such as a multiparty Internet exchange or, of course, state 
requirements.

Of the latter category, early and very significant third-party 
attempts to provide trasparency came in the very situational context 
of antitrust actions, particularly in the MCI WorldCom and Sprint 
transactions.  They helped set the stage for subsequent attempts, 
particularly that which has moved forward in Australia.  That's why 
I'd think one would to include that history of antitrust enforcement 
as part of the story.  I have some references to these in a chapter of 
Greg Elmer's _Critical Perspectives on the Internet_ 
(http://shorl.com/frifrebrudrebrine) if it is of help.

cheers
Bram



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