Re: cogent+ Level(3) are ok now

[John Curran <jcurran () istaff org>]

At 12:56 AM -0400 10/29/05, Daniel Golding wrote:
> I have no specific information, but I'm guessing there is a per-mbps charge
> that kicks in at certain ratio levels. ...
>
> I'm having a bit of trouble figuring out Level(3)'s goal in all this. A bit
> of incremental revenue? For all of this trouble? I could understand feeling
> that Cogent's ratios are a violation of their peering requirements and
> depeering them on principle, but if that's the case, why back down for a
> little cash?

I do not have any information on this particular arrangement, but can
speak to one possibility...

Even with cold-potato routing, there is an expense in handling increased
levels of traffic that is destined for your network.  This increase in traffic
often has no new revenue associated with it, because it is fanning out to
thousands of flat-rate consumer/small-business connections (e.g. DSL)
where billing is generally by peak capacity not usage.  It's also true that
some of the most popular Internet destinations will receive transit at
bargain rates because of their relative size and buying power.

A settlement fee that kicks in only on egregious ratios allows one to more
freely interconnect without bearing the full cost burden should the traffic
become wildly asymmetric.

/John