[notdonspaulding]

> it's a 20:1 disparity in traffic in vs traffic out.

Are you talking about on this graph?

http://blog.level3.com/wp-content/uploads/2014/05/route_info...

Because all the numbers I see are showing about a 5:1 or 6:1 imbalance.

> ...transit providers are starting to see their industry be squeezed by the big ISPs.

No.

> ...why do transit providers even exist?

Because it's untenable (and inefficient) for Comcast to build a separate fiber network to every service provider (e.g. to start providing a service on your version of the internet, you'd have to build your own network connection to Comcast, and then again to Verizon, and again to AT&T, and again to every other ISP on the planet).

Take another look at the L3 network map from the blog post:

http://blog.level3.com/wp-content/uploads/2014/05/network_ma...

If you think transit providers are purely middlemen for the sake of middlemen then you're basically saying that every service provider should build out a network of that same size in order to reach every ISP.

> Settlement-free peering assumes that bandwidth usage is roughly symmetric

No. It assumes that the benefit to each network is roughly symmetric. Put another way, if Netflix videos only degrade on Comcast's network, Comcast's goodwill with its own customers will increase as a result of increasing transit/peering capacity. To a normal company, that's a tangible benefit to the agreement enough to make it worthwhile.

Comcast empirically does not care about the goodwill of its customers, which is not surprising given its monopoly of local markets. If customers had alternatives to Comcast and it became known that Netflix worked on one ISP and not the other, customers would switch ISPs en masse.

[exelius]

I was going from memory on the 20:1 thing and I was wrong, but 5:1 is still not even close to symmetric.

I also used a bit of hyperbole in the "why do transit providers even exist" part; transit providers do still need to exist to provide access for the long tail. But Level3 and the like do see their market shrinking as the big fish who currently pay them for transit either directly or indirectly move more bandwidth to direct connections with the big ISPs. It is definitely starting to squeeze them.

As far as the benefit to each network goes, that's hogwash. It's not how the contracts are written because you can't quantify "benefit". You can quantify packets sent/received. Netflix needs to make money just as badly as Comcast does, so the fact that their service is crappy is much more their problem than it is Comcast's. Netflix can always purchase transit through another company that's not Comcast.

[zero_intp]

I can assure you that L3 and Cogent are not seeing the marketplace shrink. 10k quarterly files from each discuss their growths and vulnerabilities.

Historically, eyeball networks have paid for transit from backbone providers. As market consolidation occurred, the cable providers with government granted physical monopolies were able to negotiate for better settlements with their transit providers.

Eventually, the cable companies condensed with the major telephone companies. Some of the new mega companies have backbones and can use their own networks for transit (Verizon, AT&T, ...) others (Comcast) were able to use their size and access to their customers to negotiate largely settlement free exchanges.

However it is important to note that ALL eyeball networks have 1:5 to 1:20 demand ratios. This is the nature of content versus consumption. There is no new news regarding these ratios, and they are not particularly germane unless attempting to engineer the flows.

The real and pertinent issue is that Comcast has not lived up to the 'timely upgrade' clauses in boilerplate (NDA'd) settlement-free peering agreements. Clearly they have an advantage to "defect" from the standard cooperation model. Netflix has chosen to change providers several times, and recently provided data on whom they pay for service.

[nitrogen]

Why should an end-user ISP ever expect a settlement-free peering bandwidth graph to be symmetric? The important question is whether customers are requesting connections that route through through a particular transit provider. Comcast gets to sell "Internet" access, while the transit provider gets to sell bandwidth. Win win, no symmetry needed.

...you can't quantify "benefit"....

Isn't that the entire purpose of an economy?

[wdewind]

> To a normal company, that's a tangible benefit to the agreement enough to make it worthwhile.

Can you qualify this a bit? What's the actual expect cost to Comcast here to fix the issue? General ballpark?

[notdonspaulding]

You're right to call me out here. Although I have a reasonable idea what it would take technically, I don't actually know the financial impact to Comcast for increasing capacity to L3 or Cogent (not even ballpark). However, I'm taking the L3 article at face value when it says:

    But there are also typically shared costs for networks to 
    interconnect. Each party pays to augment its own network 
    to allow for more traffic exchange (the expense to augment 
    capacity is not significant for either party). And since 
    we often choose to interconnect in a third party data 
    center, the networks usually agree to share the cost of 
    the cross connects by paying for them on an alternating 
    basis.

I take that to mean the CapEx is insignificant and the recurring expenses are shared equitably. What's notable about that is that Comcast isn't even sitting down at the table to negotiate equitable terms for upgraded capacity. They're out and out refusing to upgrade without direct payment.

[zero_intp]

Cogent's CEO has already offered to pay outright for the port costs and data-center cross-connects for any upgrades. The point is to prove that the infrastructure cost of the interconnect are not the issue.

[PeterisP]

Upgrading that interconnect mentioned in the original article seems like just plugging in some $10k-$20k standard hardware and connecting a single extra wire. That kind cost doesn't matter really, it seems that they're hurting their interconnects intentionally for political reasons.