Paid Peering

Peering and interconnections are a mystery to most Internet users, who simply trust that the packets magically move from the web server to their desktop. A recent dispute over peering terms has left many Cogent customers experiencing network problems, and has drawn attention to the economics of peering, which we wrote about last May.

The dispute between Cogent and AOL has been widely discussed for several weeks on Internet mailing lists, including the North American Network Operators Group and several of Internet.com's ISP lists. Many Internet professionals noticed congestion issues once AOL discontinued its free peering arrangement with Cogent in mid-December.

Yesterday the dispute went public in a story in the Washington Post, with finger-pointing all around. Cogent says AOL is out of line in asking it to pay for peering. AOL says it never had a direct peering agreement with Cogent - its agreement was with PSINet, whose assets were subsequently bought out of bankruptcy by Cogent.

Peering is a critical cost containment tool for ISPs, but it also creates delicate business relationships in which traffic monitoring provides each party with an ongoing cost/benefit analysis. If it's not a win-win for both parties, the peering relationship is endangered.

AOL clearly believed its unpaid peering arrangement with Cogent was out of balance, with several reports suggesting the Cogent-to-AOL traffic was three times the volume of the AOL-to-Cogent traffic. Will it make sense for Cogent to pay for peering, as AOL wants? The outcome of this dispute bears watching, as it likely won't be the last time a peering disagreement clogs the pipes for customers.