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Public vs. Private Peering: How Networks Connect

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Public vs. Private Peering

How you connect to other networks is just as important as the equipment you deploy or the routing protocols you configure. For network engineers with a solid grasp of BGP and routing fundamentals, understanding the strategic and business implications of different interconnection methods can help bridge the gap between technical implementation and the business.

How Networks Connect

At its core, network interconnection comes down to two primary models: public peering at Internet Exchange Points (IXPs) and private interconnections, most commonly in the form of Private Network Interconnections (PNIs). While both accomplish the fundamental goal of exchanging traffic between autonomous systems, they differ significantly in implementation, cost structure, and operational characteristics.

Public Peering: The Marketplace Model

Public peering takes place at Internet Exchange Points (IXPs) – physical locations where multiple networks connect to exchange traffic via a shared switching fabric. Think of an IXP as a marketplace where numerous networks come together to trade routes and traffic.

Technical Implementation

From a technical standpoint, public peering typically involves:

  • A single physical connection (or redundant connections) to the IXP switch fabric
  • BGP sessions with multiple peers over the same physical infrastructure
  • Route servers that facilitate many-to-many peering relationships
  • MAC address-based security and traffic filtering
# Example route-server configuration for public peering
neighbor 256.53.201.1 remote-as 65000  # Route server ASN
neighbor 256.53.201.1 description IXP-ROUTESERVER
neighbor 256.53.201.1 prefix-list ANNOUNCE-TO-RS out
neighbor 256.53.201.1 prefix-list ACCEPT-FROM-RS in
neighbor 256.53.201.1 route-map IXP-RS-IN in
neighbor 256.53.201.1 route-map IXP-RS-OUT out

Business Considerations

The business model for public peering typically involves:

  • One-time port setup fees
  • Monthly or annual port fees based on capacity (1GE, 10GE, 100GE)
  • Flat-rate pricing regardless of traffic volume
  • Lower barrier to entry for establishing many peering relationships

Advantages

  1. Cost Efficiency: One physical connection enables peering with dozens or hundreds of networks
  2. Traffic Aggregation: Ideal for exchanging traffic with many smaller networks
  3. Simplified Provisioning: Adding new peers often requires just BGP configuration changes
  4. Community Building: Participation in IXPs facilitates relationship development with other networks

Limitations

  1. Shared Infrastructure: Performance is affected by the behavior of other IXP participants
  2. Limited SLAs: Typically lacks strong performance guarantees
  3. Scaled Operations: Large volumes to a single peer may outgrow the IXP model
  4. Control Granularity: Less control over traffic engineering for specific peers

Private Network Interconnections (PNIs): The Direct Relationship

PNIs represent direct, dedicated connections between two networks, typically within a colocation facility or carrier hotel. These are purpose-built connections intended for significant traffic exchange between specific partners.

Technical Implementation

PNIs typically involve:

  • Dedicated cross-connects between routers or switches
  • Direct fiber or wavelength connections in some cases
  • Point-to-point BGP sessions without intermediary fabric
  • Capacity planning specific to the relationship
# Example PNI configuration
interface TenGigE0/0/0/1
 description PNI-to-AS64500-100G
 mtu 9000
!
router bgp 65000
 neighbor 198.51.100.2
  remote-as 64500
  description Direct-PNI-with-Provider-A
  address-family ipv4 unicast
   maximum-prefix 10000 90 restart 60
   route-policy PROVIDER-A-IN in
   route-policy PROVIDER-A-OUT out
  !
 !

Business Considerations

The business model for PNIs typically involves:

  • Cross-connect fees to the colocation provider
  • Potentially direct fiber or circuit costs for off-premises connections
  • No traffic-based billing between peers (settlement-free)
  • Higher operational overhead in managing individual relationships

Advantages

  1. Dedicated Capacity: No contention with other peers
  2. Performance Control: Better latency and jitter characteristics
  3. Tailored Engineering: Traffic engineering can be customized for each relationship
  4. Scaling Headroom: Easier to scale capacity for high-growth relationships
  5. Enhanced Security: Physical separation from other networks

Limitations

  1. Higher Setup Cost: Each relationship requires dedicated physical connectivity
  2. Operational Scaling: Managing many individual PNIs adds operational complexity
  3. Geographic Constraints: Requires presence in the same physical facilities
  4. Relationship Overhead: More business and technical coordination required

Making Strategic Interconnection Decisions

When deciding between public peering and PNIs, consider these factors:

Traffic Volume Thresholds

Public peering often makes financial sense until traffic with a specific peer reaches a certain threshold. Many networks establish "PNI policies" based on traffic volume:

Traffic Volume Typical Approach

< 1 Gbps Public peering sufficient 1-5 Gbps Case-by-case evaluation

5 Gbps PNI typically justified The exact thresholds vary by organization and market conditions.

Geographic Distribution

Public peering works well for reaching many networks in a specific geography, while PNIs may be necessary for high-volume, geographically diverse relationships:

  • Regional Focus: Public peering often provides excellent coverage
  • Global Networks: May require a mix of public peering and strategic PNIs
  • Diverse Footprints: Consider exchange point presence when evaluating partners

Business Relationship Factors

The nature of your relationship with the other network matters:

  1. Peer vs. Customer/Provider: Different interconnection strategies apply
  2. Strategic Partnerships: Justify greater investment in dedicated connectivity
  3. Competitive Considerations: May influence interconnection decisions
  4. Growth Trajectories: Anticipate future capacity needs

Real-World Hybrid Approaches

Most sophisticated networks employ hybrid approaches to interconnection that evolve with their traffic patterns and business relationships. They typically start with Public Peering, establishing initial relationships at Internet Exchange Points (IXPs) to gain broad connectivity with minimal investment and implementation complexity. As these networks mature, they carefully monitor traffic growth with specific peers, analyzing both volume and strategic importance to identify candidates for more dedicated connections. Once certain thresholds are reached—commonly based on sustained bandwidth utilization, economic considerations, or performance requirements—these networks migrate high-volume relationships to Private Network Interconnects (PNIs) to gain greater control, reliability, and often cost efficiencies at scale. Importantly, even after establishing PNIs, sophisticated operators frequently maintain their IXP connections as backup paths, creating a redundancy layer that provides resilience during maintenance events or outages while maximizing the benefits of both interconnection models.

ASN_A ---> [ IXP ] <--- ASN_B  (Initial public peering)
             |
  ASN_A -------------- ASN_B  (Add PNI as traffic grows)
      \      |       /  
       \     |      /
        [ IXP Backup ]

Operational Considerations

Beyond the business aspects, several operational considerations influence interconnection decisions:

Route Control and Traffic Engineering

PNIs provide more granular control over network traffic management, offering significant advantages for organizations with specific performance requirements. By establishing direct connections, network operators can implement custom BGP communities for specific peers, enabling precise routing policies and traffic engineering that wouldn't be possible in more generalized peering environments. These dedicated interconnections also deliver more predictable path characteristics, as traffic traverses a known, consistent route rather than potentially variable paths through public exchanges. Furthermore, PNIs enable finer control over traffic ratios between networks, allowing operators to carefully balance ingress and egress flows according to business requirements or capacity planning. Perhaps most importantly, the direct nature of PNIs creates an environment where Quality of Service (QoS) mechanisms can be effectively implemented across the interconnection boundary, prioritizing critical traffic and ensuring performance guarantees for latency-sensitive applications—capabilities that are typically difficult or impossible to maintain across public peering infrastructure.

SLA Management

Different interconnection methods offer varying levels of reliability guarantees, each with distinct characteristics that network architects must consider when designing robust infrastructure. Public peering, commonly found at Internet Exchange Points, typically provides best-effort service without formal Service Level Agreements (SLAs), making it suitable for general traffic exchange but potentially unpredictable during high-demand periods or outages. In contrast, Private Network Interconnects (PNIs) can include more formal arrangements between the participating networks, often featuring negotiated contracts with specific performance metrics, guaranteed bandwidth, and defined escalation procedures when issues arise. The redundancy planning differs substantially between these models as well; while public peering might rely on the distributed nature of multiple peers at an exchange for fault tolerance, PNI environments typically require explicit redundancy engineering with multiple diverse circuits, equipment redundancy, and carefully designed failover mechanisms to maintain the higher reliability expectations associated with dedicated interconnections.

Troubleshooting Complexity

The debugging experience varies significantly between different types of network interconnections. When troubleshooting Internet Exchange Point (IXP) issues, network engineers often face the challenge of problems affecting multiple peers simultaneously, creating complex diagnostic scenarios that can impact numerous connected networks at once. In contrast, Private Network Interconnect (PNI) problems tend to be isolated to specific relationships between two networks, making the scope of investigation more contained and targeted. This isolation provides a notable advantage during incident response, as responsibility boundaries are typically clearer with PNIs - both parties understand their respective areas of ownership and accountability, which streamlines the troubleshooting process and often leads to faster resolution times compared to the more complex multi-stakeholder environment of an IXP.

Conclusion: Interconnection as a Strategic Asset

Network interconnection isn't just a technical implementation detail—it's a strategic asset that affects cost structure, performance, and business relationships. Effective network architects understand not just the routing protocols, but the business implications of different interconnection models.

The most successful networks maintain a balance:

  • Public peering provides breadth of connectivity and cost efficiency
  • PNIs deliver performance, control, and capacity for key relationships
  • Hybrid approaches evolve as traffic patterns and business needs change

Remember that regardless of interconnection method, the end goal remains the same: efficient, reliable packet delivery between autonomous systems. The path you choose to get there should reflect both technical requirements and business realities.

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