On Interconnection Models and Strategies

1 There are two basic types of interconnection agreements between providers in the Internet: peering and transit. A decision every Internet network service provider (INSP) has to make is which other peering/transit INSPs to connect with. The potential peering/transit partners differ (obviously) in the advertised routes and they may differ quite drastically in the amount and type of costs (line costs, exchange point related costs, settlement costs, administrative costs) as well as in reliability and quality of service aspects. In this work, we discuss and solve problems in this context: The first problem is finding the optimal set of peering and transit partners for one INSP at one point in time given the routing information and the cost functions of the potential peering/transit partners; different types of costs and different cost functions are considered. Reliability issues are considered (for example enforcing enough spare capacity to absorb the complete failure of one provider) as well as quality of service constraints (e.g. enforcing a certain average AS-hop count). This problem is formally described and solved with an optimal algorithm and compared with heuristics. Tariffs and traffic are in a permanent change, thus an INSP always has to rethink whether his current choice of peering/transit partners is still optimal for it or if it may be worthwile the administrative effort of changing some of its peering/transit agreements. The last part of this paper deals with this problem and adapts the algorithm from the first part for this setting.