Level 3 depeers Cogent

InfoWorld:

A financial dispute between two major Internet backbones has led to dropped traffic between their networks, a high-stakes game of chicken that's angering customers affected by the network disruptions.

Early Wednesday morning Level 3 Communications Inc. terminated its "peering" agreement with Cogent Communications Inc., a step Level 3 says it took after months of fruitless negotiations.

This has had no effect on customers of any tier-1 providers other than Level 3. It only affects customers (and customers of customers, ad infinitum) who purchase service only from Level 3 or Cogent, without purchasing transit service from someone who has reachability to the other.

Tier-1 providers are those that connect to each other (to all other tier-1's) with settlement-free interconnections (SFI); these include MCI, AT&T, Sprint, Qwest, Verio, and Global Crossing. Part of the agreement is usually that the amount of traffic passed in each direction is on a par--the reason for entering into such an arrangement without exchanging money is that the connectivity is considered of equal value to both parties. To quote a paper by Geoff Huston,

The bottom line is that a true peer relationship is based on the supposition that either party can terminate the interconnection relationship and that the other party does not consider such an action a competitively hostile act. If one party has a high reliance on the interconnection arrangement and the other does not, then the most stable business outcome is that this reliance is expressed in terms of a service contract with the other party, and a provider/client relationship is established. If a balance of mutual requirement exists between both parties, then a stable basis for a peer interconnection relationship also exists. Such a statement has no intrinsic metrics that allow the requirements to be quantified. Peering in such an environment is best expressed as the balance of perceptions, in which each party perceives an acceptable approximation of equal benefit in the interconnection relationship in their own terms.

Cogent, unlike Level 3, is not a tier-1 provider; they purchase transit from Verio in order to get to Sprint and AOL, among other places. Cogent has applied filters to announcements of their routes to their transit providers for all of its peers, so that traffic to those peers can only go over the links where they don't pay for traffic (the peering links) rather than the ones where they do have to pay (the transit links).

Level 3 has apparently decided that it is not getting as much as it's giving from the peer relationship with Cogent, and so has ended it, with 75 days notice. This is a situation which Cogent could rectify by entering into a customer relationship with Level 3 or by removing their filters on Level 3 to use a transit provider such as Verio to reach Level 3.

This is a scenario that either party has the power to resolve--Level 3 by allowing peering from Cogent (which they have already clearly indicated is not a high priority for them); Cogent by purchasing service from Level 3 or reaching Level 3 by purchasing IP transit from someone else.

Cogent has been caught in this situation at least three times previously--it was depeered by OpenTransit (France Telecom) on April 14, 2005. Cogent gave in on April 17 by removing its filters that prevented traffic to OpenTransit from going across transit links. Teleglobe apparently attempted a similar move, but after paying Savvis for transit to resolve the issue, decided the peering was worthwhile. Back in 2002, AOL ended its peering with Cogent. So of these three peering battles, Cogent lost two and won one.

It's possible that Cogent generates more outbound than inbound traffic on its peering connection with Level 3; that kind of imbalance can be caused by, say, Cogent having more websites than individual customers on its network. Websites receive very small requests for pages, and send back very large amounts of data (web pages, images, streaming audio and video). Individual customers typically send out small requests (for web pages or files to download) and receive back large amounts of data. Peer-to-peer traffic can have high volume in either direction, but tends to cancel out since it's usually between individual customers. (UPDATE: Cogent denies that this is the case, saying that their inbound and outbound traffic with Level 3 was balanced.)

Cogent has been aggressive in price reductions on IP transit costs, allowing them to take customers from providers that they peer with; this is also being attributed as a reason for Level 3 to want to depeer with them.

It remains to be seen who will blink first this time. We may see calls for government regulation to address this issue, but those who have lost connectivity should complain to their upstream providers; those complaints will pass up to either Level 3 or Cogent. (And, if you are one of those affected, that means your provider is not purchasing sufficient connectivity to be able to withstand an issue like this.)

UPDATE (July 25, 2008): It was Level 3 that blinked first (back in 2005; I neglected to update this post), and as of June 2008, Cogent is no longer buying transit from anyone, joining the ranks of tier-1 providers.