ISP Planet War at the Core

"The core of the Internet is stitched together by agreements that allow traffic to pass from one company's network to another's. A recent dispute between AOL and Cogent Communications showed that these agreements are shockingly fragile."

"It is a complex process that AOL allegedly hopes to complete no sooner than end of 2003. Cogent appears not to be on AOL's list of desirable peering partners. Reports claimed AOL sought to charge Cogent $75,000 per month in order to keep the peering relationship intact, an amount that Cogent's chief executive David Schaeffer described as "approximately correct.""

News.Com.Au Oz screwed on peering: Alston

"FEDERAL Communications Minister Senator Richard Alston said Australia is getting "screwed" by internet carriers' peering arrangements and that he would be directing competition and consumer watchdog the ACCC to do something about it."

" "The current arrangements for international and domestic internet traffic charging between networks, in particular the system generally known as peering whereby charges are levied on the basis of the relative amount of traffic exchanged between networks, is a significant issue for Australian broadband providers," the report said."

redux [05.25.01]
Bob Frankston Content vs. Connectivity

"The consumers' connections to the Internet are controlled by companies who are in the business of delivering content and services funded by advertising. Consumers who wander the Internet represent lost revenue. Customers who use IP telephony no longer make phone calls. Customers who experiment with creating new services are called abusers.

As long as these companies control connectivity, we do not have a marketplace for the connectivity services vital to the growth of the Internet and necessary for innovation and the benefits we have come to expect.

We must allow for a marketplace by preventing players with interests opposed to connectivity from controlling connectivity. It is a dramatic case of conflict of interest and antitrust violation. We cannot afford to tolerate such behavior. It is allowed and abetted by accepting the self-serving fallacies of the existing players. We must challenge their claims and create the opportunities so necessary for our continued prosperity."

redux [06.06.01]
News.Com Net blackout marks Web's Achilles heel

"The blockage that stopped traffic flowing between two of the top 10 networks in the United States for more than four days stemmed from a relationship called "peering," in which two networks agree to swap traffic back and forth without charge. In this case, Cable & Wireless has stopped peering with PSINet, saying the struggling company no longer had enough traffic to make the relationship worthwhile."

"Because of the complicated set of histories and relationships that make up the Internet, this had far-reaching ramifications. Cutting off this link prevented either network from seeing the other, though both could use different routes to get anywhere else on the Net."

The Standard Who Owns the Internet?

"That no one owns the Internet is taken as a truism. But the infrastructure on which the global network runs is owned by a handful of powerful corporations that can, and often do, use their control over the Internet backbone to their advantage in business negotiations. The influence these companies exert, some industry insiders fear, is strangling smaller companies and reducing customer choice."

""I can give you an example that shows that the Internet is owned by someone," says Jilani Zeribi, a senior analyst at market researcher Current Analysis in Sterling, Va. "Look at old peering arrangements, which were basically, 'I'll connect to your network, you carry my data and I'll carry yours.' The carriers started to realize that smaller ISPs were free-riding on their network, so they started charging for peering arrangements. Just the fact that someone wields that kind of power shows that someone owns the Internet.""

Gilbert & Tobin Internet Connectivity: Open Competition In The Face Of Commercial Expansion

"As a consequence, the rules for Internet interconnection are still in the process of being worked out - and in this uncertain environment, Internet interconnection is an inherently risky business. The new technology presents its own interconnection complexities, with multiple layers of virtual networks built one over the other - so that an operator at any layer of the infrastructure will have its costs determined by the prices charged by the virtual network below it, while its prices, in turn, will determine the cost structure of the layer above. Furthermore, while commercial principles would suggest that money should flow towards those operators which produce value, this does not always happen in practice (a hangover of the historical expectation that Internet access should be free for all). The uncertainties of the environment are aggravated by the fact that there is currently no consensus on the issue of how to attribute "value" to the various elements of Internet interconnection."

Citeseer On the Economics of Internet Peering (1999)

"We discuss economic rationales behind peering decisions in the Internet. In the first part of the paper we analyze the decision about a bilateral peering agreement between two commercial Internet service providers (ISPs) who are in Cournot competition. In the second part we discuss multilateral peering between commercial ISPs and an academic research network (ARN). The latter is organized as club of academics who share the cost of their network. It is discussed whether peering threatens the existence of the ARN and under what circumstances a commercial ISP would want to use strategic pricing to win all ARN-members as customers."