Should You Be Peering?

Google 貼牌冰箱(Google Refrigerator)

Google 貼牌冰箱(Google Refrigerator) (Photo credit: Aray Chen)

No, this is not an invitation for you to become peeping toms, dear readers. By peering I am talking about the process of trading Internet traffic directly with other networks to avoid paying to transport all of your Internet traffic to the major Internet POPs.

Peering didn’t always make a lot of sense, but there has been a major consolidation of web traffic to a few major players that has changed the game. In 2004 there were no major players on the web and internet traffic was distributed among tens of thousands of websites. By 2007 about 15,000 networks accounted for about half of all of the traffic on the Internet. But by 2009 Google took off and it was estimated that they accounted for about 6% of the web that year.

And Google has continued to grow. There were a number of industry experts that estimated at the beginning of this year that Google carried 25% to 30% of all of the traffic on the web. But on August 16 Google went down for about 5 minutes and we got a look at the real picture. A company called GoSquared Engineering tracks traffic on the web worldwide and when Google went down they saw an instant 40% drop in overall web traffic as evidenced by this graph: Google’s downtime caused a 40% drop in global traffic

And so, when Google went dead for a few minutes, they seem to have been carrying about 40% of the web traffic at the time. Of course, the percentage carried by Google varies by country and by time of day. For example, in the US a company called Sandvine that sells Internet tracking systems, estimates that NetFlix uses about 1/3 of the US Internet bandwidth between 9 P.M. and midnight in each time zone.

Regardless of the exact percentages, it is clear that a few networks have grabbed enormous amounts of web traffic. And this leads me to ask my clients if they should be peering? Should they be trying to hand traffic directly to Google, NetFlix or others to save money?

Most carriers have two major cost components to deliver their Internet traffic – transport and Internet port charges. Transport is just that, a fee that if often mileage based that pays for getting across somebody else’s fiber network to get to the Internet. The port charges are the fees that are charged at the Internet POP to deliver traffic into and out of the Internet. For smaller ISPs these two costs might be blended together in the price you pay to connect to the Internet. So the answer to the question is, anything that can produce a net lowering of one or both  of these charges is worth considering.

Following is a short list of ways that I see clients take advantage of peering arrangements to save money:

  • Peer to Yourself. This is almost too simple to mention, but not everybody does this. You should not be paying to send traffic to the Internet that goes between two of your own customers. This is sometimes a fairly significant amount of traffic, particularly if you are carrying a lot of gaming or have large businesses with multiple branches in your community.
  • Peer With Neighbors. It also makes sense sometime to peer with neighbors. These would be your competitors or somebody else who operates a large network in your community like a university. Again, there is often a lot of traffic generated locally because of local commerce. And the amount of traffic between students and a university can be significant.
  • Peering with the Big Data Users. And finally is the question of whether you should try to peer with Google, Netflix or other large users you can identify. There are several ways to peer with these types of companies:
    • Find a POP they are at. You might be able to find a Google POP or a data center somewhere that is closer than your Internet POP. You have to do the math to see if buying transport to Google or somebody else costs less than sending it on the usual path.
    • Peer at the Internet POP. The other way to peer is to go ahead and carry the traffic to the Internet POP, but once there, split your traffic and take traffic to somebody like Google directly to them rather than pay to send it through the Internet port. If Google is really 40% of your traffic, then this would reduce your port charges by as much as 40% and that would be offset by whatever charges there are to split and route the traffic to Google at the POP.

I don’t think you have to be a giant ISP any more to take advantage of peering. Certainly make sure you are peeling off traffic between your own customers and investigate local peering if you have a significant amount of local traffic. It just takes some investigation to see if you can do the more formal peering with companies like Google. It’s going to be mostly a matter of math if peering will save you money, but I know of a number of carriers who are making peering work to their advantage. So do the math.

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