Internet Service Providers and Peering

Internet Service Provider (ISP) peering has emerged as one of the most important and effective ways for ISPs to improve the efficiency of operation. Peering is defined as "an interconnection business relationship whereby ISPs provide connectivity to each others' transit customers." ISPs seek peering relationships primarily for two reasons. First, peering decreases the cost and reliance on purchased Internet transit. As the single greatest operating expense, ISPs seek to minimize these telecommunications costs. Second, peering lowers inter-Autonomous System (AS) traffic latency. By avoiding a transit provider hop in between ISPs traffic between peering ISPs has lower latency. So how is peering done? This paper details the ISP peering decision-making process. Interviews with Internet Service Providers 1 have highlighted three distinct decision phases of the peering process : Identification (Traffic Engineering Data Collection and Analysis), Contact & Qualification (Initial Peering Negotiation), and Implementation Discussion (Peering Methodology). The first phases identifies the who and the why, while the last phase focuses on the how. The appendix includes the description of a Peering Simulation Game that has been used in workshops to play out peering negotiations.