In the past, when traffic exchanged between the Comcast network and Level 3 was roughly equal, it made sense to peer the networks on a "settlement-free" basis. Now that traffic flows are about to become quite unbalanced, that won't work.
With the massive new Netflix CDN deal where Netflix is currently the largest source of traffic in North America, Level 3 will likely start sending five times more traffic to Comcast than it receives.
When that happens, a "settlement-free" peering arrangement often becomes a "for-fee" transit agreement, where the network imposing an unequal traffic load pays the other network.
That's the situation here, where a business relationship that worked well when traffic exchange was equal becomes untenable as traffic flows become highly unequal. Settlement-free peering works for the former, not the latter. So Comcast wants a transit style agreement where it gets paid for carrying the excess traffic.
Level 3 would prefer not to pay, and it is not alone in that desire. Unequal traffic flows do not lend themselves to settlement-free peering agreements.
3 comments:
Your article is pretty high on the google list now, so perhaps you can give examples of the other "peering" agreements that this is similar to. Is Comcast expecting payments from Google because of Youtube, for example?
I had previously assumed it was an ISP's job to send their customers the internet traffic that they request, regardless of volumes...
There are a couple of issues here. There are all the retail issues that revolve around how a consumer customer buys Internet access service from a service provider. That's where the "net neutrality" argument comes into play.
There are separate, business-to-business issues that end users never see, revolving around the business relationships carriers and ISPs use to compensate each other for exchanging traffic.
The Comcast dispute with Level 3 is of that type: it is a not uncommon dispute between ISPs about their commercial agreements to exchange traffic.
All ISPs have to interconnect with all others, directly or indirectly. Small ISPs tend to use exchanges; large ISPs can connect directly.
The point here is that there are two business arrangements any ISP might use: peering or transit.
The real difference in a business sense is simply how any two IP networks decide to connect.
Two or more networks might "peer" if they are large and send each other equal amounts of traffic. The business arrangement is simply that the two networks agree not to charge each other for exchanging traffic, and to connect without paying each other, so long as traffic is in balance (I send you as much as you send me).
But small ISPs typically will connect indirectly through an exchange. That indirect method involves the second commercial model, "transit," where a smaller ISP will pay the exchange for the right to interconnect with other ISPs. That's "transit," where one ISP pays another entity to carry its traffic.
The point is that this sort of dispute, over rates or terms of interconnection, is not unusual. Parties usually work out the deals without end users knowing anything, but sometimes the disputes cause actual service disruptions. It is rare, because both parties lose goodwill when it happens, but is not unknown.
But commercial differences happen as often as in any other supplier relationship. What is different here is that the old "peering" agreement between Comcast and Level 3 was based on a totally different traffic profile.
From now on, Level 3 will be sending a lot more traffic to Comcast than Comcast will be sending to Level 3. That means the older "peering" arrangement has to be revised, as such contracts always are when imbalances exist.
All you need to know is that the dispute actually has nothing to do with an end user's service. It is all about the business arrangements between carriers, in this case ISPs.
Voice providers also have to interconnect, and have somewhat similar agreements to compensate each other for the use of each others' networks.
Basically, the model is that if AT&T and France Telecom do not pay each other for exchanging equal amounts of traffic, but do pay if one network is sending more traffic than it is receiving.
The issue here is not really the "type" of traffic but the volume of traffic being exchanged, and the business arrangements each party believes is proper for doing so. Comcast rightly assumes it no longer will be exchanging equal amounts of traffic with Level 3. That means the "settlement-free peering" agreement the two networks used to have will not work anymore.
Thanks for the detailed reply. It's been harder than it should be to find that explanation when people are reporting on the possible consumer impact of this issue. I hate to say it, but this sounds like Comcast isn't being evil here...
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