[LINK] Usage Based Billing

[Michael Skeggs mike@bystander.net]

On 1 April 2011 09:06, Richard Chirgwin <rchirgwin at ozemail.com.au> wrote:

> On 1/04/11 8:29 AM, Kim Holburn wrote:
> > On 2011/Apr/01, at 7:02 AM, Richard Chirgwin wrote:
>
> >>
> >> Not technical reasons, perhaps, but definitely economic reasons.
> > I keep hearing that but why does Australia have to pay for US bytes when
> no other country does?  We might have to pay more for the underwater fibre
> but that surely is a fixed cost and other countries on the pacific would
> have to pay that to.
> All ISPs have to make some kind of transit arrangement, wherever they
> are. The issue, as I understand it, is scale: if you're big enough to
> force peering with a large backbone provider, you pay for the difference
> between traffic up and down. We're not big enough, so we have to buy
> transit at a disadvantageous rate.
>
> RC
>

To connect to US networks you need to purchase transit bandwidth, or
establish peering agreements with each ISP you wish to exchange traffic
with. If you are, for example KPN, (big Dutch Telco), you can probably get
Verizon, AT&T, Comcast, RoadRunner etc to peer with you, and it is probably
worth your time and their time to set up a settlement agreement to do so.
But to access content hosted on e.g. Clearwire (ISP pulled at random from
this list http://www.isp-planet.com/research/rankings/usa.html) it isn't
worth your trouble to set up a direct peering agreement, as they are pretty
small (400k customers). Part of your agreement with the big guys might allow
you to pull transit traffic from their peers (of whom Clearwire might be
one) but ideally the big guys would like to sell you transit bandwidth for
using their network to connect to these other third parties ("transiting"
their network).
There are public peering points, similar to the Australian IX's, but they
carry less traffic than private peering arrangements.
The wikipedia article looks OK. http://en.wikipedia.org/wiki/Peering
So it isn't a case of everyone else on the planet getting free bytes and we
have to pay.

Regards,
Michael Skeggs