Interconnection deals are a still a hot topic in the net neutrality debate. In an ideal world, when two networks interconnect, both operators share the responsibility and cost of delivering data from one network to the other. But in reality, the resource load isn't always evenly balanced -- one operator may dump a lot more traffic on to its partner's network than the other -- and that's where complaints about performance and fair treatment of data traffic come into play. (See No Heroes in the Battle for the Net.)
In one effort to level the playing field, Level 3 Communications Inc. (NYSE: LVLT) has come up with a system for basing network interconnection agreements on the concept of "bit mile balance." In a noteworthy deal with Google (Nasdaq: GOOG) earlier this month, Level 3 instituted settlement-free peering with the Internet giant (i.e., no-cost interconnections between the companies' networks). But more importantly, the two partners also backed that agreement up with a promise to try to maintain an equitable balance of traffic. (See Level 3 Seals Bit Mile Peering Deal With Google.)
The companies are measuring equality by taking into account both traffic volume and the distance that traffic has to travel. If one company finds itself carrying more traffic than the other, then the partner company can counter that imbalance by moving the connection point to where traffic is delivered closer to the first company's end users. (See Net Neutrality: Level 3 Sees Peering Progress Soon.)
The fact that Level 3 and Google were able to come to an agreement using the bit mile balance concept is a big deal.
"We think it's really good for consumers. It just means that they're just going to get a better performance," says a Level 3 spokesperson, adding that he thinks "It's meaningful as well because Google is obviously a big and very smart company, and for them to say that this bit mile model makes sense and that it's equitable, we think is a really good validation."
The Federal Communications Commission (FCC) stated as part of its Open Internet Order that it will keep an eye on interconnection agreements to make sure they're "just and reasonable." But if the network operators have no complaints, then there will be no reason for the regulatory agency to get involved. (See Net Neutrality Rules Pass on Interconnection.)
Of course the big question is: How might the concept of bit mile balance impact the delivery of online video services like Netflix to consumers? Unfortunately, the answer is: Not too much.
Level 3 acknowledges that Internet providers like Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) aren't interested in measuring bit miles because they really only care about the traffic that's delivered on to their last-mile networks. Most ISPs don't operate backbone networks, so they're not transferring a lot of content away from their own network infrastructure. That makes it hard to equalize any traffic exchange.
Just the fact that the FCC said it would look into interconnection agreements was enough to push many ISPs and transit providers like Level 3 and Cogent Communications Holdings Inc. (Nasdaq: CCOI) into new deals last spring. (See Interconnect Deals Bear Net Neutrality's Stamp.)
However, whether the FCC has the authority to preside over interconnection disputes has come into question as net neutrality opponents appeal the Open Internet Order in court and seek to restrict the agency's powers in Congress.
For now, the long-term interconnection agreements signed last year should help keep the peace as ISPs continue to contend with the Netflix dilemma (i.e., video flooding onto their last-mile networks). But if those agreements break down, or when it comes time for renewal, the fight is likely to heat up again. And while bit mile measurements look like a great option for deals between transit providers, unless and until ISPs are sending as much traffic upstream as they're receiving downstream, bit mile balance won't neutralize the net neutrality debate.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading