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The selection process for the market's third operator was a spectacle to behold
(part 1 of a two-part series)
Local IP peering is the free exchange of internet traffic between two or more networks. Since its aim is to provide the most direct link between operators, both parties benefit from a reduction of bandwidth and from lower cost to send and receive data.
I’ve written extensively about peering in a series on Telecom Asia, which starts here.
IP peering is very close to my heart. As a policy researcher, I knew very little about ASNs, BGP, and routing. Learning about peering became my first step to understanding not only the technical processes behind how the internet works, but how the internet works because of the people behind it.
Through peering, I realized that the internet, more than anything, is founded on and thrives in the free exchange of information, in cooperation and collaboration, and, most importantly, in mutual trust among peers.
The word “peer” means “one that is of equal standing with another.” As a verb, its archaic meaning is to “make or become equal with.” This definition cannot be more apt than how it is used in providing internet service.
In the definition of internet peering, what strikes me the most is the emphasis on building a relationship of approximately equal value to each party. Although peering is essentially a business decision, it is ultimately about reciprocity in providing access to what each other has, regardless of one’s market size and commercial standing or influence.
In short, IP peering is like the perfect relationship that all of us want in life: both parties mutually benefit and feel that they are getting, more or less, equal value for what they are willing to give the other.
In 2012, an article by Dennis Weller and Bill Woodcock and published by OECD reported that 99.5% of peering agreements around the globe were done on a handshake, with no written contract. The exchange of data usually happens with no money changing hands or mainly settlement-free.
Peering also emphasizes the universality of the internet’s constituents. Peers can be internet backbone, access, and content distribution networks. But they can also be academic institutions, non-government organizations, health institutions, government offices, large corporations, or SMEs.
To the customers, like myself, peering is invisible. Internet service subscribers don’t care if their ISP is peered or not; they just want fast internet at a price that they can afford.
But there are two good reasons why this lack of awareness need to change.
The first reason is that peering can help reduce the cost of providing internet service. While the price of internet transit continues to drop every year, the volume of traffic grows at a much higher percentage. This will lead to higher transit fees for upstream traffic. With internet peering, the absolute cost of internet transit can be decreased, which would, hopefully, translate to lower cost for the end-users.
The second reason is somewhat more difficult to tell, mainly because there hasn’t been much local data and study done on the matter.
Does peering improve an ISP’s performance? Does it contribute to increasing bandwidth for those peered? Does peering translate to better quality of internet service delivered to the end-user? I will explore the answer to these questions in my next post.