An overview explaining the reasons fo peering at Internet Exchange Points (IXPs), versus IP Transit, and the known benefits and uses of both approaches to a network blend. The presentation brings to light the decline in pricing of IP Transit and what this means for the financial benefits that peering used to offer and how remote peering (or virtual connectivity at Internet Exchanges) continues to alter this landscape. It also highlights how remote peering has changed the way network operators exchange traffic and made peering more accessible to smaller/medium sized companies and developing markets, by removing the initial barriers in terms of legal, billing and technical; simplifying the whole process of expanding a network. Developing markets are also discussed, such as the Middle East, and the peering paradigm of 'keeping local traffic local' Vs virtually/remotely connecting to Internet Exchanges and the issues with both. It touches on the shift in the industry and how Internet Exchanges and Data Centres are behaving more like networks and vice versa, explaining the new Central European Peering Hub project by LU-CIX - with IX Reach as the first carrier partner - whereby they encourage members to join major Internet Exchanges (DE-CIX, LINX, France-IX and AMS-IX) via their Internet Exchange platform.

1.
LU-CIX General Assembly Day
Remote Peering – A Shift in
Internet Architecture
Ruth Plater, Head of Marketing
25 July 2013, Luxembourg

2. Agenda
ü Who is IX Reach?
ü Peering Vs. Transit
ü Traditional Peering Model
ü Challenges to this Model
ü Remote Peering Model and it’s Impact
ü International Vs. Local
ü The Reaction of Internet Exchange Points
ü Conclusions

3. Who is IX Reach?
ü Global Layer 2 Ethernet and MPLS network
ü 30 Major global cities (and growing)
ü 20 Internet Exchanges in Europe and the US
ü 75+ data centres on-net
ü Network connectivity and colocation solutions providers
ü Global leaders in remote peering

4. Peering Vs. Transit
Peering
ü Settlement-free interconnection between two networks
ü Cost efficient
ü Traffic optimisation and low latency
ü Scalability and redundancy
ü Improved end-user experience – closer to the eyeballs
ü Community and marketing
Transit
ü Connecting smaller ISPs, for a fee, to the larger Internet
ü Historically more expensive
ü No control over routes

5. Traditional Peering Model
Source: Re-Designed from Dr. Peering

6. Challenges to this Model
ü Fixed costs (ports, colocation, routers)
ü Faster decline in Transit costs, with no end in sight

7. Remote Peering Model
Source: Re-Designed from Dr. Peering

8. How does Remote Peering Help?
ü Further cost reductions:
ü No colocation or hardware infrastructure at each IX required
ü No deployment/install fees
ü Bundled transport and connections at the Exchanges
ü Lower operational costs – customers only pay for the CDR they need
ü Reduction in upstream costs and reliance on multiple transit connections
ü Paperwork is vastly reduced for the IXPs
ü Single point of contact for legal, technical and billing for the customer
ü Turning up peering is a lot faster
Peering is therefore more accessible to smaller/medium sized networks and
developing markets.

9. More to Consider: International Vs. Local
ü We used to say “peering keeps traffic local”
ü Remote peering promotes international traffic exchange
ü But it makes less sense over longer distances
ü Content providers want to be closer to the eye-balls
ü As a result more of a business case for local IXPs to be built
ü Network operators in developing markets connecting “locally” with each other in
remote locations
ü Higher adoption of remote peering to cut costs and headaches

10. Reaction of IXPs to this Shift
ü Larger IXPs with critical mass are less at risk than smaller IXs without critical
ü IXPs are behaving more and more like networks:
ü Expanding geographically (both domestically and internationally) - becoming
multi-site IXPs
ü Larger IXs are expanding into new global markets (UAE-IX powered by DE-
CIX)
ü Small IXs are expanding regionally and offering remote peering to bigger IXs
ü Some have their own partial networks and offer connectivity
It is becoming increasingly difficult to differentiate between international and local
peering, and Networks and Internet Exchanges.

11. LU-CIX: Central European Peering Hub

12. LU-CIX: Central European Peering Hub

13. Conclusions
ü Transit costs continue to fall and there’s no end in sight
ü Peering is still valuable for a network and operators normally use (or at least
consider) a blend of peering direct, remote peering AND transit
ü Remote peering reduces the costs of peering further
ü However, this makes less sense over longer distances
ü Remote peering is a great way to get closer to eyeballs
ü The roles of networks and IXPs will change in the future – it’s already happening!
ü Developing markets will play a vital part in this shift

14. A Message from our HQ in London