How to make money on the internet exchange
Russ White May 29, Most providers — transit, edge, and content — are pretty obvious to the various users of the Internet.
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But who actually connects all these different providers together? Private peering can, however, have some downsides. Running the links and facilities can be expensive.
The sunk costs can often make it difficult to justify changing providers based on cost savings or service improvement. National borders and geographic conditions can dictate peering points that are outside the optimal in terms of optimizing traffic flow.
Which is great, except that we're all running autonomous systems, which means that we can set up peering links, and are you really friends with another network engineer if you're not running a cross connect between your two networks? This wasn't too bad for the first few networks joining our little cabal of networks, but due to that pesky quadratic growth issue, the number of new cross connects needed when the fifth or sixth person joined started getting ridiculous. It's like, four or five! This is, of course, an issue that real networks have to deal with as well, so when we had an eighth friend sign a service agreement with Hurricane Electric this week, the idea was half jokingly floated that we should just start our own Internet Exchange Point to cut down on the number of cross connects we need for each new member.
An IXP is essentially a data center for peering routers. There is physical space to install peering routers, power, cooling, a fabric either Ethernet or IP based to which all the peering routers connect, and a normally a route server that provides a mechanism for all the routers located in the IXP to share BGP routing tables.
Internet infrastructure has to be shared in order to keep data moving freely. With peering, networks take advantage of the benefits of exchanging traffic freely among members for mutual benefit. With Transit, one network user pays compensation to another network for the use of their infrastructure. Usually, the smaller of the two pays fees to the larger, who maintains the infrastructure. If the two users are exchanging an equal amount of traffic, fees may be waived.
Most IXPs operate as a sort-of local cooperative; a lot of providers get together and build an IXP rather than building individual peering points between each pair of providers. IXPs sell their services based on a port — the larger the port onto the fabric you purchase, the more you pay the IXP to collocate your equipment there.
Instead, once connected you still need to negotiate the type and level of peering you want to receive from the other networks connected to the IXP.
Changing from one upstream to another is a matter of adjusting policies, rather than building out a new circuit to the new provider, and abandoning the infrastructure put in place for the previous connection. Instead, your BGP speaker can peer with just the route server or two route servers, in some cases.
The route server uses a set of fancy filters and mechanisms to enforce the sending of routes only between networks that have a peering relationship. The complexity of building the peering relationships, filters, and policies are pushed into the IXP fabric, rather than being managed by each connecting provider. IXPs, then, can provider cheaper peering costs, a marketplace of peering, simpler configuration and management for the providers, lower latency, better bandwidth, and a number of other advantages to providers and customers.
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