Nancy Paterson <Nancy.Paterson@senecac.on.ca>, 11.03.07:
Bram, you missed ENRON (the largest failure in corp history) its not clear to what extent their engaging in bandwidth trading contributed to their demise but it really is not relevant - ENRON was a significant corp failure. They created the first bandwidth trade.
No, I don't think it's accurate to say that Enron participated in "a commodity market in packet-based bandwidth". From what I recall Enron traded only dark and lit fibre (specifically, SONET). There was some talk of Internet bandwidth, but I don't believe Enron ever went forward with that. If you widen your ambit beyond "packet-based bandwidth", by which I assume you intend "Internet bandwidth" -- ATM and frame relay networks are packet-based, but not really relevant here -- then you could take in the sorts of things Enron was doing. Because Enron hoped that growth in demand for Internet bandwidth would help create an environment in which the sort of underlying bandwidth it was producing, selling, and buying could be commoditised, I think this would remain true to your topic -- as long as the two network layers in question were not conflated. They are different in a number of important ways, particularly geographically: "raw" bandwidth involves city pairs (point to point); Internet transit is usually one-ended.
transit IS peering - just for fee
That seems an unusual use of these terms to me -- generally they are counterposed such that "peering" is a settlement-free form of transit where, as the trade-off, traffic destined only to the peer is delivered. In other words: pay me for me to deliver all traffic to the rest of the Internet, and vice versa (transit); free-peer with me to deliver all the traffic you've got that goes to my end-users, and vice versa (peering). Some providers make "paid peering" available, a sort of halfway step -- ie: pay me less than transit to deliver all traffic to my end-users, etc. See, for instance, AOL, who apparently does this (which, given the nature of paid-peering and of AOL, respectively, makes sense): <http://www.atdn.net/paid_peering.shtml>.
Don't get me wrong, though! This is one of a number of important areas to look at. I question whether it is the most significant or even an extremely significant cost driver, relative to others, in the international context in which you want to operate -- I suspect that other cost drivers, most of them related to state-sponsored chokeholds, tend to be both more determinative, and highly connected, to this issue. But there is lots to be said and lots being said on this topic, with a number of interesting approaches in recent years to try and bring transparency to this domain.
Thanks for the book references I'm not looking at anti-trust but at transparency in peering agreements - and how this may be able to happen
Yes. I don't know that it is useful to cloister these from one another quite so absolutely, though. Typically transparency in bilateral commercial relations is either entered into at the behest of the parties themselves, or mandated by some third party with varying levels of suasion -- "in the shadow of", be it the shadow of a community of network operators, best practice guidelines promulgated by some formal association, shared memberships in a network facility such as a multiparty Internet exchange or, of course, state requirements. Of the latter category, early and very significant third-party attempts to provide trasparency came in the very situational context of antitrust actions, particularly in the MCI WorldCom and Sprint transactions. They helped set the stage for subsequent attempts, particularly that which has moved forward in Australia. That's why I'd think one would to include that history of antitrust enforcement as part of the story. I have some references to these in a chapter of Greg Elmer's _Critical Perspectives on the Internet_ (http://shorl.com/frifrebrudrebrine) if it is of help. cheers Bram