ABSTRACT

An ISP (Internet service provider) is a company that provides individuals and other
companies access to the Internet and other related services such as Web site building and
virtual hosting. ISPs employ a range of technologies to enable consumers to connect to
their network. Just as their customers pay them for Internet access, ISPs themselves pay
upstream ISPs for Internet access.

Internet Service Provider (ISP) peering and transit has emerged as one of the most
important and effective ways for ISPs to improve the efficiency of operation.

Peering is defined as “an interconnection business relationship whereby ISPs provide

connectivity to each others’ transit customers.” ISPs seek peering relationships primarily
for two reasons. First, peering decreases the cost and reliance on purchased Internet
transit. As the single greatest operating expense, ISPs seek to minimize these
telecommunications costs. Second, peering lowers inter-Autonomous System (AS) traffic
latency. By avoiding a transit provider hop in between ISPs traffic between peering ISPs
has lower latency.

BGP is a multi-vendor “open” protocol with multiple implementations, all mostly

interoperable. It is the only actively used EGP on the Internet. The main design feature of
BGP was to allow ISPs to richly express their routing policy, both in selecting outbound
paths and in announcing internal routes.
Thus ISP play an important role in providing Internet access to its customers.
 1. INTRODUCTION

An ISP (Internet service provider) is a company that provides individuals and other
companies access to the Internet and other related services such as Web site building and
virtual hosting. An ISP has the equipment and the telecommunication line access required
to have a point-of-presence on the Internet for the geographic area served. The larger
ISPs have their own high-speed leased lines so that they are less dependent on the
telecommunication providers and can provide better service to their customers. Among
the largest national and regional ISPs are AT&T WorldNet, IBM Global Network, MCI,
Netcom, UUNet, and PSINet.

The larger ISPs interconnect with each other through MAE (ISP switching centers run by
MCI WorldCom) or similar centers. The arrangements they make to exchange traffic are
known as peering agreement. There are several very comprehensive lists of ISPs world-
wide available on the Web.

In the past, most ISPs were run by the phone companies. Now, ISPs can be started by just
about any individual or group with sufficient money and expertise. In addition to Internet
access via various technologies such as dial-up and DSL, they may provide a combination
of services including Internet transit, domain name registration and hosting, web hosting,
and colocation.

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 2. ISP CONNECTION OPTIONS

ISPs employ a range of technologies to enable consumers to connect to their network. For
"home users", the most popular options include dial-up, DSL (typically ADSL),
Broadband wireless access, Cable modem, and ISDN (typically BRI). For customers who
have more demanding requirements, such as medium-to-large businesses, or other ISPs,
DSL (often SHDSL or ADSL), Ethernet, Metro Ethernet, Gigabit Ethernet, Frame Relay,
ISDN (BRI or PRI), ATM, satellite Internet access and SONET are more likely. With the
increasing popularity of downloading music and online video and the general demand for
faster page loads, higher bandwidth connections are becoming more popular.

Typical Home User connection:

Dial-up

DSL

Broadband wireless access

Cable modem

ISDN

Typical Business connection:

DSL

SHDSL

Ethernet technologies

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2.1. Dial-up access:

Dial-up access is a form of Internet access via telephone line. The client uses a modem
connected to a computer and a telephone line to dial into an Internet service provider's
(ISP) node to establish a modem-to-modem link, which is then routed to the Internet
Dial-up requires time to establish a telephone connection (several seconds, depending on
the location) and perform handshaking before data transfers can take place. In locales
with telephone connection charges, each connection incurs an incremental cost. If calls
are time-charged, the duration of the connection incurs costs.

Dial-up access is a transient connection, because either the user or the ISP terminates the
connection. Internet service providers will often set a limit on connection durations to
prevent hogging of access, and will disconnect the user — requiring reconnection and the
costs and delays associated with it.

2.2. T-1 carrier or DS1 lines:

A dedicated phone connection supporting data rates of 1.544Mbits per second. A T-1 line
actually consists of 24 individual channels (a transmission path), each of which supports
64Kbits per second. Each 64Kbit/second channel can be configured to carry voice or data
traffic. Most telephone companies allow you to buy just some of these individual
channels, known as fractional T-1 access.

T-1 lines are a popular leased line (a permanent telephone connection between two points
set up by a telecommunications common carrier. Typically, leased lines are used by
businesses to connect geographically distant offices. Unlike normal dial-up connections, a
leased line is always active. The fee for the connection is a fixed monthly rate. The
primary factors affecting the monthly fee are distance between end points and the speed
of the circuit. Because the connection doesn't carry anybody else's communications, the
carrier can assure a given level of quality) option for businesses connecting to the Internet
and for Internet Service Providers (ISPs) connecting to the Internet backbone. The

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Internet backbone itself consists of faster T-3 connections. T-1 lines are sometimes
referred to as DS1 lines.

2.3. T-3 line or DS3 lines:

A dedicated phone connection supporting data rates of about 43 Mbps. A T-3 line
actually consists of 672 individual channels, each of which supports 64 Kbps.
T-3 lines are used mainly by Internet Service Providers (ISPs) connecting to the Internet
backbone and for the backbone itself. T-3 lines are sometimes referred to as DS3 lines.

2.4. xDSL:
Refers collectively to all types of digital subscriber lines, the two main categories being
ADSL and SDSL. Two other types of xDSL technologies are High-data-rate DSL
(HDSL) and Very high DSL (VDSL).

DSL technologies use sophisticated modulation schemes to pack data onto copper wires.
They are sometimes referred to as last-mile technologies because they are used only for
connections from a telephone switching station to a home or office, not between
switching stations.
xDSL is similar to ISDN inasmuch as both operate over existing copper telephone lines
(POTS) and both require the short runs to a central telephone office (usually less than
20,000 feet). However, xDSL offers much higher speeds - up to 32 Mbps for upstream
traffic, and from 32 Kbps to over 1 Mbps for downstream traffic.

ADSL: Short for asymmetric digital subscriber line, a new technology that allows more
data to be sent over existing copper telephone lines (POTS). ADSL supports data rates of
from 1.5 to 9 Mbps when receiving data (known as the downstream rate) and from 16 to
640 Kbps when sending data (known as the upstream rate).ADSL requires a special
ADSL modem. ADSL is growing in popularity as more areas around the world gain
access.

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SDSL: Short for symmetric digital subscriber line, a technology that allows more data to
be sent over existing copper telephone lines (POTS). SDSL supports data rates up to 3
Mbps. SDSL works by sending digital pulses in the high-frequency area of telephone
wires and can not operate simultaneously with voice connections over the same wires.
SDSL requires a special SDSL modem. SDSL is called symmetric because it supports the
same data rates for upstream and downstream traffic. A similar technology that supports
different data rates for upstream and downstream data is called asymmetric digital
subscriber line (ADSL). ADSL is more popular in North America, whereas SDSL is
being developed primarily in Europe.

2.5. Cable modem:

A modem designed to operate over cable TV lines. Because the coaxial cable used by
cable TV provides much greater bandwidth than telephone lines, a cable modem can be
used to achieve extremely fast access to the World Wide Web. This, combined with the
fact that millions of homes are already wired for cable TV, has made the cable modem
something of a holy grail for Internet and cable TV companies.
There are a number of technical difficulties, however. One is that the cable TV
infrastructure is designed to broadcast TV signals in just one direction - from the cable
TV company to people's homes. The Internet, however, is a two-way system where data
also needs to flow from the client to the server. In addition, it is still unknown whether
the cable TV networks can handle the traffic that would ensue if millions of users began
using the system for Internet access.
Despite these problems, cable modems that offer speeds up to 2 Mbps are already
available in many areas.

2.6. VPN:
(Pronounced as separate letters) Short for virtual private network, a network that is
constructed by using public wires to connect nodes. For example, there are a number of
systems that enable you to create networks using the Internet as the medium for
transporting data. These systems use encryption and other security mechanisms to ensure
that only authorized users can access the network and that the data cannot be intercepted.

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2.7. ISDN:
Abbreviation of integrated services digital network, an international communications
standard for sending voice, video, and data over digital telephone lines or normal
telephone wires. ISDN supports data transfer rates of 64 Kbps (64,000 bits per second).

There are two types of ISDN:

• Basic Rate Interface (BRI) -- consists of two 64-Kbps B-channels and one D-
channel for transmitting control information.
• Primary Rate Interface (PRI) -- consists of 23 B-channels and one D-channel
(U.S.) or 30 B-channels and one D-channel (Europe).
The original version of ISDN employs baseband transmission. Another version, called B-
ISDN, uses broadband transmission and is able to support transmission rates of 1.5 Mbps.
B-ISDN requires fiber optic cables and is not widely available.

2.8. Ethernet Technology :

Ethernet :
Ethernet is a family of frame-based computer networking technologies for local area
networks (LANs). The name comes from the physical concept of the ether. It defines a
number of wiring and signaling standards for the physical layer, through means of
network access at the Media Access Control (MAC)/Data Link Layer, and a common
addressing format.

Ethernet is standardized as IEEE 802.3. The combination of the twisted pair versions of
Ethernet for connecting end systems to the network, along with the fiber optic versions
for site backbones, is the most widespread wired LAN technology. It has been in use
from the 1990s to the present, largely replacing competing LAN standards such as token
ring, FDDI, and ARCNET. In recent years, Wi-Fi, the wireless LAN standardized by
IEEE 802.11, is prevalent in home and small office networks and augmenting Ethernet in
larger installations.

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Gigabit Ethernet:

Gigabit Ethernet (GbE or 1 GigE) is a term describing various technologies for

transmitting Ethernet frames at a rate of a gigabit per second, as defined by the IEEE
802.3-2005 standard. Half duplex gigabit links connected through hubs are allowed by
the specification but in the marketplace full duplex with switches is the norm.

Metro Ethernet:

A Metro Ethernet is a computer network based on the Ethernet standard and which covers
a metropolitan area. It is commonly used as a metropolitan access network to connect
subscribers and businesses to a Wide Area Network, such as the Internet. Large
businesses can also use Metro Ethernet to connect branch offices to their Intranets.

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 3. HOW ISPS CONNECT TO THE INTERNET

Just as their customers pay them for Internet access, ISPs themselves pay upstream ISPs
for Internet access. In the simplest case, a single connection is established to an upstream
ISP using one of the technologies described above, and the ISP uses this connection to
send or receive any data to or from parts of the Internet beyond its own network; in turn,
the upstream ISP uses its own upstream connection, or connections to its other customers
(usually other ISPs) to allow the data to travel from source to destination.

In reality, the situation is often more complicated. For example, ISPs with more than one
Point of presence (PoP) may have separate connections to an upstream ISP at multiple
PoPs, or they may be customers of multiple upstream ISPs and have connections to each
one at one or more of their PoPs. ISPs may engage in peering, where multiple ISPs
interconnect with one another at a peering point or Internet exchange point (IX), allowing
the routing of data between their networks, without charging one another for that data -
data that would otherwise have passed through their upstream ISPs, incurring charges
from the upstream ISP. ISPs that require no upstream, and have only customers and/or
peers, are called Tier 1 ISPs, indicating their status as ISPs at the top of the Internet
hierarchy. Routers, switches, Internet routing protocols, and the expertise of network
administrators all have a role to play in ensuring that data follows the best available route
and that ISPs can "see" one another on the Internet.

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 Backbon
e
Backbon
Upstream e

Regional Internet
Service Providers

Providers
Service
Local Internet

Downstream

End Users &

businesses

Figure :The Internet Hierarchy

Peering point or Internet exchange point:

An Internet exchange point (IX or IXP) is a physical infrastructure that allows different
Internet Service Providers (ISPs) to exchange Internet traffic between their networks
(autonomous systems) by means of mutual peering agreements, which allow traffic to be
exchanged without cost. IXPs reduce the portion of an ISP's traffic which must be
delivered via their upstream transit providers, thereby reducing the Average Per-Bit
Delivery Cost of their service. Furthermore, the increased number of paths learned
through the IXP improves routing efficiency and fault-tolerance.

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3.1 ISP to ISP interconnect: Peering

Peering is voluntary interconnection of administratively separate Internet networks for the

purpose of exchanging traffic between the customers of each network. The pure
definition of peering is settlement-free or "sender keeps all," meaning that neither party
pays the other for the exchanged traffic, instead, each derives revenue from its own
customers. Marketing and commercial pressures have led to the word peering routinely
being used when there is some settlement involved, even though that is not the accurate
technical use of the word. The phrase "settlement-free peering" is sometimes used to
reflect this reality and unambiguously describe the pure cost-free peering
situation.Peering requires physical interconnection of the networks, an exchange of
routing information through the Border Gateway Protocol (BGP) routing protocol and is
often accompanied by peering agreements of varying formality, from "handshake" to
thick contracts.

To illustrate peering, consider figure 1 below showing a much simplified Internet: the
Internet with only three ISPs: WestNet, USNet, and EastNet. WestNet has customers
shown as green circles. USNet has customers of its own (beige circles) and EastNet has
its customers shown as yellow circles.

Peering Peering

W estNet USNet EastNet

Routing
Tables
Figure - Peering and Transit relationships

In this example, WestNet has a peering relationship with USNet in which USNet
announces reachability of its beige customers to WestNet, and WestNet announces

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reachability to its green customers to USNet. This is the essence of the peering
relationship; each ISP reciprocally provides access to each others customers. EastNet also
peers with USNet, announcing its yellow customers to USNet while USNet announces its
blue customers to EastNet.

It is important to note that WestNet and EastNet cannot access each other’s customers in
this configuration. (The boxes below the ISPs show their respective routing tables.)
WestNet only knows how to get to blue and green customers, and EastNet knows how to
reach only blue and yellow customers. The fact that they both peer with USNet is
inconsequential; peering is a non-transitive relationship.

Since peering is a reciprocal non-transitive relationship, EastNet and WestNet must peer
with every other ISP or find another way of accessing every other ISP.

3.1.2 Physical interconnections for peering:

The physical interconnections used for peering are categorized into two types:
• Public peering - Interconnection utilizing a multi-party shared switch fabric such
as an Ethernet switch.
• Private peering - Interconnection utilizing a point-to-point interconnection such
as a patch-cable or dark fiber between two parties

Public peering:
Interconnection utilizing a multi-party shared switch fabric such as an Ethernet switch.At
these locations, multiple carriers interconnect with one or more other carriers across a
single physical port. Historically public peering locations were known as network access
points (NAPs), today they are most often called exchange points or Internet exchanges
("IXP" or "IX").public peering allows networks interested in peering to interconnect with
many other networks through a single port.it is often considered to offer "less capacity"
than private peering,but to a larger number of networks.

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Private peering:
Private peering is the direct interconnection between only two networks, across a Layer 1
or 2 media that offers dedicated capacity that is not shared by any other parties. Early in
the history of the Internet, many private peers occurred across 'telco' provisioned SONET
circuits between individual carrier-owned facilities. Today, most private interconnections
occur at carrier hotels or carrier neutral colocation facilities, where a direct crossconnect
can be provisioned between participants within the same building, usually for a much
lower cost than telco circuits.

Most of the traffic on the Internet, especially traffic between the largest networks, occurs
via private peering. However, because of the resources required to provision each private
peer, many networks are unwilling to provide private peering to "small" networks, or to
"new" networks who have not yet proven that they will provide a mutual benefit.

ISP Physical Interconnection Methods

Interconnection Method

Direct-Circuit Exchange-Based
Interconnection Interconnection

For direct-circuit interconnects, key issues center upon interconnection location(s) and
who pays for and manages the interconnection. This becomes a material cost issue as
traffic grows and circuits increase in size and cost.
In either case, ISPs generally have the following goals for establishing peering:
1. Get peering set up as soon as possible,
2. Minimize the cost of the interconnection and transit costs,
3. Maximize the benefits of a systematic approach to peering.
4. Execute the regional operations plan as strategy dictates (may be
architecture/network development group goal), and
5. Fulfill obligations of larger business agreement.

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3.2 ISP to ISP interconnect: Transit

ISP 1 needs to deliver its customers’ traffic to the rest of the internet, and the rest of the
internet needs to know how to get to ISP 1’s customers. So,

• ISP 2 announces all the routes on the internet to ISP 1

• ISP 1 announces just its customer routes to ISP 2

ISP 1 is a customer of ISP 2

Definition: Transit is the business relationship whereby one ISP provides (usually
sells) access to all destinations in its routing table.

Consider a simplistic Internet model below in figure 2. In this picture, EastNet purchases
transit from USNet, and in return gets connectivity to all networks in USNet’s routing
table. As a customer of USNet, USNet announces EastNet routes across all of its peering
and transit interconnections.

Transit Relationship - selling access to entire routing table

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 4. BORDER GATEWAY PROTOCOL
The Border Gateway Protocol (BGP) is the core routing protocol of the Internet. It works
by maintaining a table of IP networks or 'prefixes' which designate network reachability
among autonomous systems (AS). It is described as a path vector protocol. BGP does not
use traditional IGP metrics, but makes routing decisions based on path, network policies
and/or rulesets.

BGP is a multi-vendor “open” protocol with multiple implementations, all mostly

interoperable. It is the only actively used EGP on the Internet. The main design feature of
BGP was to allow ISPs to richly express their routing policy, both in selecting outbound
paths and in announcing internal routes.

Purpose of BGP:

• To allow networks to tell other networks about routes (parts of the IP address
space) that they are “responsible” for.
• Using “route advertisements”, or “promises” - also called “NLRI” or
“network-layer reachability information”.
• Networks are “Autonomous Systems”.
• Identified in BGP by a number, called the ASN (“Autonomous System
Number”)

iBGP:
When BGP speakers in the same AS form a BGP connection for the purpose of
exchanging routing information, they are said to be running IBGP or internalBGP.
IBGP speakers are usually fully-meshed.
eBGP :
eBGP sessions are established when peering with the different AS.

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 5. VIRTUAL ISP

A Virtual ISP (vISP) purchases services from another ISP (sometimes called a wholesale
ISP or similar within this context) that allow the vISP's customers to access the Internet
via one or more Points of Presence (PoPs) that are owned and operated by the wholesale
ISP. There are various models for the delivery of this type of service, for example, the
wholesale ISP could provide network access to end users via its dial-up modem PoPs or
DSLAMs installed in telephone exchanges, and route, switch, and/or tunnel the end user
traffic to the vISP's network, whereupon they may route the traffic toward its destination.
In another model, the vISP does not route any end user traffic, and needs only provide
AAA (Authentication, Authorization and Accounting) functions, as well as any "value-
add" services like email or web hosting. Any given ISP may use their own PoPs to deliver
one service, and use a vISP model to deliver another service, or, use a combination to
deliver a service in different areas. The service provided by a wholesale ISP in a vISP
model is distinct from that of an upstream ISP, even though in some cases, they may both
be one and the same company. The former provides connectivity from the end user's
premises to the Internet or to the end user's ISP, the latter provides connectivity from the
end user's ISP to all or parts of the rest of the Internet.

A vISP can also refer to a completely automated white label service offered to anyone at
no cost or for a minimal set-up fee. The actual ISP providing the service generates
revenue from the calls and may also share a percentage of that revenue with the owner of
the vISP. All technical aspects are dealt with leaving the owner of vISP with the task of
promoting the service. This sort of service is however declining due to the popularity of
unmetered internet access also known as flatrate.

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 6. MULTIHOMING

It is a technique to increase the reliability of the Internet connection for an IP network. As

an adjective, it is typically used to describe a customer, rather than an Internet service
provider (ISP) network.

There are several ways to multihome, separate from the actual protocols used to do so,
amongst which the most important are:

• Single Link, Multiple IP address (Spaces)

The host has multiple IP addresses (e.g. 2001:db8::1 and 2001:db8::2 in IPv6), but you
only have one physical upstream link. When the single link fails, connectivity is down for
all addresses.

• Multiple Interfaces, Single IP address per interface

The host has multiple interfaces and each interface has one, or more, IP addresses. If one
of the links fail that IP address is unreachable, the other will still work. Hosts that have
multiple AAAA or A records enabled can then still be reachable at the penalty of having
the client program time out and retry on the broken address. Existing connections can't be
taken over by the other interface, as TCP does not support this. To remedy this, one could
use SCTP which does allow this situation. However SCTP is not used very much in
practice.

• Multiple Links, Single IP address (Space)

This is what in general is meant with Multihoming. With the use of a routing protocol, in
most cases BGP, the end-site announces this address space to its upstream links. When
one of the links fails, the protocol notices this on both sides and traffic is not sent over the
failing link any more. Usually this method is used to multihome a site and not for single
hosts.

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• Multiple Links, Multiple IP address (Spaces), no routing protocol like BGP
This approach uses a specialized Link Load Balancer (or WAN Load Balancer)
appliance between the firewall and the link routers. No special configuration is required
in the ISP’s routers. It allows to use all links at the same time to increase the total
available bandwidth and detects link saturation and failures in real time to redirect traffic.
Algorithms allow traffic management. Incoming balancing is usually performed with a
real time DNS resolution.

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 7.CONCLUSION

Today many new ISPs are coming up and thus there is a huge competition among
them in providing good services at low cost to its customers. For this they are
continuously upgrading their technology.

The basic peering game does a good job of highlighting the issues ISPs face when
peering. Several comments from ISPs offering enhancements add reality to the game
at the cost of complexity. For example, ISPs capture market share in order to be an
attractive acquisition target. Adding merger rules adds a real complexity, somewhat
tangentially related to peering and transit. Adding rules for ISPs to buy/sell transit to
each other similarly adds complexity but adds a negotiating dynamic that ISPs face
today. Balancing the desire to explain and explore against the desire for the
simulation to match reality has proven to be a challenge.

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 8.REFERENCES

[1] “Maturation in a Free Market: The Changing Dynamics of Peering in the ISP Market“
by Jennifer DePalma

[2] www.wikipedia.org

[3] www.webopedia.com

[4] ISP Survival Guide, Geoff Huston, Wiley Publishers

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