Current Trends and Controversies in Internet Peering and Transit: Implications for the Future Evolution of the Internet
25 Pages Posted: 1 Apr 2014 Last revised: 4 Apr 2016
Date Written: August 20, 2014
The hierarchy of Internet peering and transit interconnection agreements between Internet Service Providers (ISPs) defines the core economic structure of the Internet. Recent interconnection agreements (e.g., between Netflix and AT&T, Comcast or Verizon) have generated considerable comment and concern, much of which is misleading as to the root causes for new peering agreements and even the future of the Internet itself. Given this critical setting, this paper examines how and why Internet peering and transit is changing, and discusses the implications of these changes on the future evolution of the Internet. What makes this research novel is the analysis of new Internet traffic data to identify future trends relevant to Internet interconnection. These data provide insight into the congestion level of different interconnects in a few places on the Internet. We next develop a framework to describe past evolution in Internet Interconnection in order to better understand the changing characteristics in Internet traffic, and other new developments impacting the economics of Internet interconnection. This framework demonstrates how most network providers have been progressively expanding their networks over a larger proportion of the end-to-end connection (i.e., increasing their network investment), providing an explanation of the changes in Internet interconnection, and resulting controversies, to keep pace with this network evolution. The strategic implications of our analysis: 1) a more complete understanding of the full network investment undertaken by network providers may help avoid, or at least better explain, the future controversies, 2) rapidly changing nature of Internet content will be constant source of change in interconnection, and 3) the changing role of Tier 1 providers will be further impacted by increasing peering among Tier 2 and Tier 3 providers through the implementation of remote peering based upon open standards for Internet Exchange Providers. Taken as a whole, the increasingly overlapping roles of network providers call into question the utility of the traditional "Tiered" framework as a useful description of the current Internet peering ecosystem, and suggests the need for a new, updated framework to predict and describe future peering relationships.
Keywords: Internet interconnection, peering
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