Abstract: Interconnection Strategies for ISPs
Bill Norton, Equinix
This talk highlights the tradeoffs between the direct
circuit interconnect model and the exchange point interconnection model for
ISPs. The paper discusses the operations and financial models (taking into
account the circuit costs, cost of exchange participation, cost of dark
fiber, etc.) and the implications of these strategies across the number of
interconnection participants and bandwidth utilization between the
participants.
Major points to be presented include the following:
- For ISP interconnection, direct circuit interconnection is
financially attractive for low numbers of connections (O(5)) of
relatively low bandwidth (DS-3/OC-3). This is due to the fact that ISPs
typically pay only half of the cost for the direct circuits between each
other, while they pay the full freight for the big pipe into the exchange.
ISPs may want to use the exchange for a POP, but barring use like that, if
all one wants to do is exchange traffic with these other five folks into
the
foreseeable future, the direct circuit interconnect model makes sense.
- As the bandwidth and number of interconnections grow, the exchange
point interconnection model proves much more scalable for two reasons.
First, as bandwidth grows between participants, ISPs are able to aggregate
interconnection traffic over increasingly large pipes back to their cloud,
yielding potentially significant economies of scale. The direct circuit
interconnection does not provide for this aggregation. Secondly,
operationally, there are fewer backhoes in an exchange, fewer local loop
providers to troubleshoot, etc. The greater the dependence on
interconnection, the more hardened one wants that interconnection
environment.
-
Several of the exchanges also provide for the centralization of content,
allowing additional transit sales revenue that potentially dwarf the cost
savings highlighted above for interconnection. The direct circuit
interconnect model doesn't allow for this additional revenue opportunity.
The analysis finds that facilities-based ISPs win big since (being able
to exploit WDM technologies) they can seamlessly grow the pipe(s) into the
exchange while the direct circuit interconnection model can't take
advantage of this level of aggregation.
These are among several of the dominant reasons for the IXP to be around
well into the future.
Powerpoint presentation
HTML presentation
"Interconnection Strategies" white paper (MS
Word)
RealVideo stream