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Peering Commercials and ContractsPresentation to AfPIF Peering Coordinators Day, Dar Es Salaam 2011

Mike Blanche

Peering Commercials – Its All About The Money!

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Agenda

• Peering Commercials

The Business Case for Peering

Cost/Benefit Analysis of Peering vs Transit

Who

Where

How

• Peering Contracts

Contract or Not?

Peering Agreement Terms

• Conclusions

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The Business Case for Peering

• How to convince the Financial Director of the case for peering?

• Don’t talk to him about BGP routing, improved latency, blah blah blah

• Do a Cost/Benefit Analysis for him!

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Peering Commercials – Cost/Benefit Analysis

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Monetary Cost Comparison

Transport to Peering Point

Fixed for a certain capacity size

Colocation FixedEquipment FixedPort fees on an Internet Exchange

Usually Fixed

Peering Transit

Internet Access Usually charged based on usage, (95th percentile)

Transit is usually metered, peering costs are often “lumpy”

Peering Commercials – Cost/Benefit Analysis

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Source: DrPeering.com

Peering Commercials – Cost/Benefit Analysis

• Non-monetary benefits of peering against transit

More direct path

Predictability of traffic exchange

No third parties involved

Increased resilience and reliability

Better performance for customers

• Non-monetary costs of peering against transit

No SLA

No NOC to call when it breaks

More complicated, requires management, configuration, knowing what you’re doing

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Peering Commercials – Who to peer with?

• Look at traffic volumes and key potential partners

NetFlow analysis

Cache server logs

Ask the other network how much traffic you are exchanging

• Consider your and the potential peer’s Peering Policy

Open

Selective

“Tier 1” 

• No peering with your own customers

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Peering Policies

Operational:

• 24x7 NOC / traffic volume / ratio / peering locations

Technical:

• Route announcements and aggregation / MD5 / MEDs / No abuse

General:

• Non-Disclosure / Termination / Liability Terms

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Peering Policies

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Source: DrPeering.com

(Mostly)

Peering Commercials – Where to peer?

• Find a mutually acceptable point (use peeringdb.com)

• If there’s more than one potential point, consider 

Cost of reaching that point

Cost of hosting at that location (if required)

Reliability

Scalability

Latency reduction benefit

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Peering Commercials – How to peer?

• Public – over an Internet Exchange

Pay for port, can peer with anyone on IX who will peer with you

1 port, can peer with many operators

Best for aggregating connections to lots of operators with small volumes of traffic

• Private

Private fibre/copper connection

Requires 1 dedicated port on each side

Best for connections to an operator with a large volume of traffic

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How to peer when someone doesn’t want to peer with you?

• Buy paid peering

• Send the peer lots of traffic (e.g. host content on your network if they are an eyeball network)

• Make friends

• Buy another operator who already has peering

• Leverage a broader business arrangement

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Peering Contracts

This is the Legal Bit!

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Peering Agreements – Contract or Not?

Why Not?

• Legal Issues

Lawyers feel compelled to meddle and change agreements

Are they paid by the word...?!

• 99.51% of peering agreements are “informal” (Source: PCH)

• Doing contracts does not scale to a large number of peers

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Peering Agreements

Why have an agreement?

• Clarity

• Agreement of best efforts and best practice

• Liability – limiting redress

• Confidentiality

Always have a template peering agreement

• e.g. LINX Model Peering Agreement

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Peering Agreements

Even if you don’t have an agreement, stick to best practice

• Use MD5 authentication

• Have good route aggregation policies

• Do IPv6 as well as IPv4 peering

• Exchange NOC contacts (or put them in PeeringDB)

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Peering AgreementsWhat should be in the agreement?

• Parties involved

• Should cover multiple interconnections, both public and private (do the paperwork once only, then execute many times)

• Agreement on any cost-sharing

• Term and termination of the agreement

• Disclaimers of warranty and liability (lawyers love this)

• Confidentiality

• Assignment of the agreement, approval and regulatory issues

• Governing Law

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Governing Law

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If peering with an US or European entity, you are likely to be asked to use their jurisdiction

Source: PCH Peering Survey 2011

Peering Agreements

Remember, 99.51% of peering coordinators prefer NO contracts!

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Conclusions

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Peering Commercials

• Decide with who, where, and how to peer

• Work out the cost/benefit analysis of doing so

• Peering negotiations are not always easy

Peering Agreements

• In general, don’t have one!

• If you do, make sure it’s clear, covers what’s needed, and simple to execute

• Even if you don’t, make sure you follow best practice