Dramatic drops in the price of international capacity as a result of market deregulation in the Asia Pacific is resulting in a shift in the dynamics of Internet traffic, according to a presentation at the APRICOT conference in Taipei this week.
“Local peering provides cost efficiencies compared to IP transit. It allows participants to exchange internet traffic at a lower rate while improving latency” says Raphael Ho, director of network engineering and operations for Equinix.
The cost of international capacity between the US and Asia has dropped dramatically in the past ten years. In 1996, US$10,000 would buy a 64kbps IPLC between Asia and the US. The same money buys a STM-1 (155Mbps) circuit in 2006.
Currently, large network operators have restricted peering policies as they have economical access to the majority of the market.
“Peering takes place now when both the ISP and content providers see mutual benefits in the agreement,” Ho says, “For example, tier-2 ISPs who requires content to draw eyeballs would negotiate a peering agreement with content providers with the desired content. This was not possible before deregulation.”
When the Internet started, peering was a way between ISPs in non regulated markets to exchange traffic with each other.
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