Re: a question about the economics of peering

["David R. Dick" <drd () sii-nh com>]

> Today, I was approached by *unnamed-ethernet-extension-company*. They
> extend ethernets between several US and UK peering exchanges.
>
> While speaking with them today, thier engineer and I got into a little bit
> of a disagreement as to why people peer with each other at public exchange
> points. My belief is that generally speaking, networks meet at public
> exchange points (such as MAE-*, LINX, AMSIX, AADS, etc) is to exchange
> traffic with each other more economically (read: save money).
>
> His belief is that people will pay a premium to get to an exchange point,
> because it's worth paying a premium to have 'less hops' between two
> networks.

The problem with this idea is that public exchange points need
to be *avoided* when they get too congested.  People may start
out trying to minimize number of hops, but I think they eventually
try to minimize total latency.

> Essentially, he said that paying more for peering that for transit is
> typical, and to be expected, and most people accept this.
>
> Whats the common opinion on this?