October 1997 edition
Contact: Alan
Earls, Editor
Software Publications, Inc.
108 Water St., Watertown MA 02172
617/926-1900 http://www.bosoft.com
To Peer or not to Peer
PSINet offers free peering to all: local ISPs
are divided on the significance of the move
By Charles E. Vermette
The recent decision of Herndon, VA based PSINet to offer "local, regional, and national ISPs streamlined connectivity and direct access" to its planned OC-48 backbone is being greeting with mixed reviews by area ISPs.
William L. Schrader, PSINet chairman, CEO and President, announced the plan during the recent ISPcon conference and exposition in San Francisco. Harold Hubschman, Chairman of the Massachusetts Internet Service Providers Coalition, praised the plan as "a clever and gutsy move by PSI. They're playing up their technical strengths and their positioning themselves well to increase their market share of the connectivity business in the future." Aaron Sawchuk, founder of Cohasset based Dream Communications (http://www.dreamcom.net), attended ISPcon and also praises the move as "fantastic-and in the spirit which made the Internet what it is today." Sawchuk further describes it as "a great move financially for PSI. Since they previously refused to sell connections to ISPs, they are not going to lose any revenue, but they are going to create a backbone which provides real added value to PSI customers. "
"By peering with any ISP, they will have the best connectivity to every one of their peers, and their customers in turn will have rapid responses from any servers which reside on networks which PSI peers with. If more backbone providers would embrace this attitude, I think you could see a serious improvement in speed and performance across the Internet."
Sawchuck sees PSINet policy as being "far superior to that of UUnet, " who recently announced a policy of peering only with ISPs "that can route traffic on a bilateral and equitable basis." UUNet's policy is to peer only with ISPs that "operate a national network with a dedicated, diversely routed DS-3 (or faster) backbone, and which will connect to UUNet at DS-3 or greater speeds in at least four geographically diverse locations." Sawchuk condemns UUNet's policy as "an attempt to substantially raise the cost-of-market entry for a regional or national backbone provider. For every provider they keep out of the marketplace, they gain sales by eliminating competition." UUNet's monthly fees for smaller ISPs and Web Server Farms start at $2,000 for T1 connections and $6,000 for fractional T3 connections.
Lowell Gray, President and Founder of Lynn-based Shore.Net (http://www.shore.net), downplays PSI's announcement as a marketing ploy. "In reality, very few little guys can afford to get to public peering points to exchange traffic with PSINet. And those who can, are already overstressed and overloaded-and probably don't want the extra burden."
As a marketing strategy, Gray sees the move as a reasonable one "given PSINet's eroding position relative to UUNet. They're using UUNet's recent policy change against them. By casting themselves as a friend of the little guy, they may attract more of the smaller ISPs. "
Gray considers UUNet's original policy announcement to be far more significant in the long run. "It portends the likely future of the backbone: an oligarchy of fewer and fewer members of the club, all interconnecting privately to the exclusion of the lower-echelons who are shut out and forced to buy at retail. "
UUNet sights "radical changes in the economics of the Internet" as the reason for its peering policy. The company claims that when all ISPs were the same size, and used each other's infrastructures to an equal extent, peering made sense. Today, they claim, this is no longer the case and contend that peering requests from small regional ISPs and "web server farms" are "requests for UUNet to provide national and international data transport, as well as connectivity and support services, to companies which do not have the ability to provide similar services in return. Essentially, companies requesting peering in these situations are seeking to use UUNet's network for free, after UUNet has spent hundreds of millions of dollars to create its infrastructure." Sawchuk retorts that "the server farms and ISPs are exactly where they should be peering. If they want to continue to bill themselves as a high-end ISP, they are going to have to understand why peering makes sense. If they peer with major web server farms, it will keep the number of "hops" (machines which a packet has to pass through) to a minimum, giving their customers faster and more reliable connections."
When asked to contrast UUNet's approach with PSINet's, Chuck Davin, Chief Technology Officer of PSINet, offers this observation: "UUNet's change in peering philosophy coincided with their acquisition by WorldCom (a global business telecommunications company and the nation's fourth largest long distance carrier.) At one time, UUNet and PSINet joined together to form the Commercial Internet Exchange-an organization for open peering. We still believe that growing the Internet benefits us more than trying to control or impede it." Davin is quick to point out that altruism is not PSINet's motive. As a veteran of the Telephone Industry, he understands the UUNet/WorldCom approach. "The Telephone Industry thinks in terms of running the most efficient network, and they're taking that mindset with them as they branch onto the Internet. We feel that the smaller ISPs are in a better position to focus on customer service, and will welcome the chance to turn to us for network support. When the smaller ISPs concentrate on customer service, and let us concentrate on network services, we both grow and prosper. " Hubschman's view is similar to Davin's: "Over the next few years, the larger players will focus on providing connectivity, with smaller ISPs offloading the business of maintaining network connections."
The Boston ISP community waits to see which strategy will prevail. Sawchuk is adamant in saying that "it's obvious that PSINet understands the benefits of peering, while UUNet does not." Gray's assessment is just the opposite: "PSINet would do what UUNet is doing in a heartbeat if they could get away with it. "