[ppml] geo addressing

Michael.Dillon at btradianz.com Michael.Dillon at btradianz.com
Thu Nov 10 09:59:36 EST 2005

> Assuming the settlement rate is comparable to or higher than the current 

> transit rate (something nobody has addressed so far), everyone has a 
> financial incentive to build as much inbound capacity and attract as 
> inbound traffic as possible.

I think that I did address this.
Settlement in an Internet context is not much different
from transit or paid peering. Therefore, the companies
invloved will negotiate rates and terms just as they do
with transit, paid peering, and SFI peering. It's not up
to us to solve this problem. We are not the FCC of the
Internet. We just give out IPv6 addresses to companies 
to *ENABLE* them to internetwork. 

By creating this geotopological addressing scheme 
we enable companies by allowing them to reduce the 
footprint that a region makes in the DFZ or global 
routing table if you prefer. And it also enables companies 
by giving them a handy traffic tag that tells them how 
far the traffic travelled to reach the peering point. 
I expect that this will help companies distinguish between
hot-potato traffic and cold-potato traffic and therefore
allow them to come up with a reasonable charging scheme
for their settlements. 

However, unlike the traditional telco settlements,
this does not require accounting for every network
session. It still deals with traffic in the aggregate
by lumping together all traffic that comes from a 
particular city into the same address range. This
will allow a much more efficient accounting system 
than the telco model which, in the latter half of
the 1990's, still constituted 75% or more of your
telephone bill.

As for traffic that is not using geo-topological
addresses, it can continue in the way it always has,
with the usual depeering games and secret paid peering
deals to avoid the appearance of being a second 
class "transit" customer.

> The way I've seen it described, there's nothing preventing any ISP from 
> selling transit to any other or to end sites; the only thing is that to 
> the IX-based addresses in a given area, they'd need to peer at the IX 
> join the settlement scheme).

It's all about opting in. Companies will join the scheme
if it makes sense. The scheme will evolve to meet the
needs of network operators and customers. The long tail
of small multihomers that will spring up over the next
10 years will mostly be served by geotopologically aggregates
and the growth of routing tables world-wide will be dampened.
Even if an old-time tier one doesn't want to switch 
to geo-topological addresses, there is still a business
case to be made for serving small to mid-size customers
using this scheme.

> (b) you would get settlement check 
> for traffic coming in on your transit pipes headed for other IX members, 
> (c) you'd send settlement checks for traffic coming in on other IX 
> transit pipes headed for your customers.

I would hope that this would be done without huge
numbers of checks. In fact, the IX could be in a
position to mediate the financial exchanges as well
as providing interconnect services.

--Michael Dillon

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