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Comment by ktsmith | Hacker News Reader

Verizon probably doesn't need to pay Level 3 for the bandwidth. Typically peering points like this are settlement free. In other words it's a voluntary exchange of traffic and each side of the line keeps 100% of the revenue from its customers using the interchange.

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And Verizon claims that peering points are intended to be roughly equal in directional usage. Which this is not. Are there examples of peering agreements where companies don't care that usage isn't balanced and still don't require some sort of net settlement?

Peering links between backbones (like Level 3 and Verizon Business) are supposed to have equal ratios. Peering between content providers and end-user ISPs don't care about ratios.

Right. If they really cared about ratios they wouldn't offer unbalanced service such as 50/15. They have built their network around users predominately consuming content and then complain when there is too much consumption from specific providers that happen to compete with services they also offer.

Right. And the latter has to pay for it.

The latter what? I think content peering should be free because there's no fair way to set a price for it.

Why not? There's plenty of price data for high volume bandwidth applications, and even if there weren't, the parties could negotiate for it.

An end-user ISP like Comcast has a monopoly on access to their customers, so if they're allowed to charge for peering there is no competition to limit how much they charge. This tends to result in the ISP allocating 99% of the surplus created by peering to themselves.

That's very true. The only limit would be losing customer (HA!) because they didn't connect to the right content providers. There's some interesting network effects here that smell like positive externalities, which would explain the underinvestment. But also suggest that there isn't a good solution.

I'd say that wmf addressed it already. Peering points with one side being primarily consumer services are always going to be unequal due to the nature of the end user and the ways in which consumer ISPs provide bandwidth to their customers. Lots of download, and very little upload speed as an example. As such it's nearly impossible for many peering points primarily used by consumer services to use an equal amount of traffic on both directions. Both sides of the agreement know this and it's still usually in both of their best interests to peer settlement free.

I'd say a lot of the peerings at DECIX and AMS-IX.

Good to know. And these all remain settlement-free?

iirc it is part of the peering culture there, but I am not sure exactly, never having worked in that field

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