DCE-210 · Lesson 7 of 12 · 37 min
Carriers, peering and interconnection
A data center is only useful if it is connected. Customers need to reach the applications inside, data centers need to reach each other, and companies need fast private links to cloud providers. All of this travels over fiber owned by telecommunications carriers and over the agreements networks make with each other. For some facilities, the connections are the main product: a carrier-neutral colocation building in a major city can be worth more for the hundreds of networks that meet inside it than for its power and cooling.
This chapter explains how the internet is stitched together from independent networks, how those networks exchange traffic, how a data center is physically connected to carriers, what services carriers sell and how they are priced, and how engineers make connectivity resilient. It uses American examples: the carriers, exchange points and regulators a designer works with in the United States.
A network of networks
The internet is not one network. It is more than 70,000 independent networks, each called an autonomous system (AS), that have agreed to exchange traffic. An autonomous system is a network run by one organization with one routing policy: an internet service provider, a cloud provider, a university, a content company or a large enterprise. Each has a unique AS number. The networks tell each other which blocks of IP addresses they can reach using BGP (Border Gateway Protocol), the same protocol Lesson 3 described inside fabrics. When you load a web page, your request may cross three or four autonomous systems, each passing it on according to its own business relationships.
Those relationships come in two basic kinds.
Transit
In a transit relationship, a customer network pays a provider to carry its traffic to and from the entire internet. The provider announces the customer's addresses to everyone it connects with and gives the customer routes to everywhere. Small and medium networks, enterprises and many data center operators buy transit, usually from two or more providers for resilience.
At the top of the hierarchy are a few Tier 1 networks, such as Lumen, AT&T, NTT and Arelion, that can reach every destination on the internet without buying transit from anyone, because they peer with each other. Below them, Tier 2 networks both buy some transit and peer widely.
Peering
In a peering relationship, two networks exchange traffic directly, but only traffic between their own customers. Neither pays the other to reach the rest of the internet. Peering is often settlement-free: neither side pays, because both benefit roughly equally. It can also be paid, when one side benefits more. Peering reduces transit costs, shortens paths and lowers latency, because traffic goes directly from one network to the other instead of through a third party.
Content and cloud companies peer very widely. A large share of all internet traffic now flows directly from a few huge content and cloud networks into access networks, and a data center that hosts both kinds of network becomes a natural place for them to meet.
Where networks meet
Networks interconnect physically in a few ways.
- Internet exchange points (IXPs): an IXP operates a shared switching fabric, often spread over several data centers in a city. Each member network connects one or more ports to it and can then peer with any other member over that single connection. An IXP lets a network peer with hundreds of others without running hundreds of separate cables.
- Private network interconnects (PNIs): when two networks exchange a lot of traffic, they connect directly with dedicated links, usually cross-connects within the same building. PNIs carry the largest flows between big content providers and access networks.
- Carrier hotels: certain buildings in major cities, often older downtown office towers converted decades ago, became the places where long-haul fiber routes converged. Because every network was there, every new network came too. These buildings are extremely dense with interconnection and are very hard to replicate.
In the United States, major exchanges include DE-CIX New York, the Equinix Internet Exchange in Ashburn, Chicago, Silicon Valley and other metros, NYIIX in New York, Any2Exchange in Los Angeles and the Seattle Internet Exchange (SIX). Famous carrier hotels include 60 Hudson Street and 111 Eighth Avenue in New York, One Wilshire in Los Angeles, 350 East Cermak Road in Chicago and the Westin Building Exchange in Seattle. Northern Virginia, especially Ashburn in Loudoun County, grew from early interconnection points into the largest data center market in the world, in part because so many networks already met there.
Inside the building: the meet-me room
Inside a colocation data center, carriers bring their fiber into one or more meet-me rooms (MMRs). Each carrier terminates its fiber on its own patch panels or in its own small racks in the MMR. Each customer's cage or suite also has fiber running back to the MMR. To connect a customer to a carrier, or two customers to each other, the data center operator installs a cross-connect: a fiber patch cord, or a dedicated fiber run, between the two parties' panels.
Cross-connects are a recurring revenue stream for colocation operators, typically billed monthly per connection, and in a busy facility there may be tens of thousands of them. The operator keeps careful records of each one, because a single mislabeled fiber can take a customer offline. MMRs are high-security spaces with their own access control, separate from customer areas, and they need power, cooling and pathways like any other technical room. Large campuses usually have two MMRs on opposite sides of the building, each fed from a different entrance.
Carrier-neutral and carrier-specific facilities
A carrier-neutral data center lets any carrier bring fiber into the building and lets customers buy from any of them. Competition between carriers keeps prices down and gives customers choice and resilience. Most large colocation providers are carrier-neutral, and the number of carriers "on net" in a building is one of the main things customers compare.
A carrier-owned data center is run by a telecommunications company, and customers may be expected to use that carrier's services. Enterprise and hyperscale self-built data centers usually contract with a few carriers to bring diverse fiber to the campus and may also lay their own dark fiber to nearby colocation sites and to their other data centers.
What carriers sell
Data center operators and their customers buy connectivity in several forms, from raw glass to finished internet service:
- Dark fiber: unlit fiber strands, leased (often for 10 to 20 years under an indefeasible right of use, or IRU) between two points. The customer installs its own optical equipment and can run as much capacity as that equipment allows. Hyperscale operators use dark fiber between their data centers in a metro area.
- Wavelengths: a dedicated optical channel on the carrier's DWDM system (Lesson 9), typically 10, 100 or 400 Gb/s, between two locations. The carrier operates the optics; the customer gets a transparent pipe.
- Ethernet private lines and Ethernet virtual circuits: layer 2 connections between sites, sold at a committed bandwidth.
- IP transit (dedicated internet access): a port onto the carrier's network with full internet connectivity, priced by bandwidth.
- MPLS VPNs and SD-WAN: private wide-area networks connecting an enterprise's offices and data centers.
- Cloud on-ramps: private connections into public cloud providers, such as AWS Direct Connect, Microsoft Azure ExpressRoute, Google Cloud Interconnect and Oracle FastConnect. Enterprises use them to reach the cloud with predictable performance instead of over the public internet. Colocation facilities that host on-ramps attract enterprise customers for that reason.
Burstable billing and the 95th percentile
IP transit is often billed on the 95th percentile of usage. The carrier measures the traffic on the port every five minutes for the whole month, sorts the samples, discards the highest 5% and bills at the highest remaining value. In a 30-day month there are \(30 \times 288 = 8640\) five-minute samples; the top 432 (36 hours' worth) are discarded.
The method lets customers burst briefly above their usual traffic without paying for it, while still charging for sustained use. Usually there is also a commit: a minimum amount billed every month whatever the usage. Traffic is measured in each direction and the higher of the two 95th percentiles is normally used.
Worked problem
A transit bill
A customer's 10 Gb/s transit port has a 95th percentile of 6.2 Gb/s outbound and 2.1 Gb/s inbound this month. The commit is 2 Gb/s and the price is $0.25 per Mb/s per month. What is the bill? (Prices here are illustrative.)
Show solution
- Use the higher direction: 6.2 Gb/s outbound.
- It is above the 2 Gb/s commit, so the commit does not apply.
- Convert: 6.2 Gb/s = 6200 Mb/s.
- Bill: \(6200 \times 0.25 = \$1550\) for the month.
Answer: $1550. If usage had been 1.5 Gb/s, the customer would still pay for the 2 Gb/s commit, $500.
Worked problem
Is peering worth it?
The same customer finds that 40% of its traffic goes to networks present at the local exchange point. Joining the exchange costs $1000 per month for the port plus $300 per month for the cross-connect. Is it worth it at 6.2 Gb/s? What if the 95th percentile were 60 Gb/s and a larger exchange port cost $2500 per month?
Show solution
- At 6.2 Gb/s, traffic moved to peering: \(0.40 \times 6200 = 2480\) Mb/s.
- Transit saving: \(2480 \times 0.25 = \$620\) per month.
- Cost of peering: \(1000 + 300 = \$1300\) per month. Not worth it on cost alone.
- At 60 Gb/s, traffic moved: \(0.40 \times 60{,}000 = 24{,}000\) Mb/s, saving \(24{,}000 \times 0.25 = \$6000\) per month.
- Cost: \(2500 + 300 = \$2800\). Saving minus cost: \$3200 per month.
Answer: Not worth it at 6.2 Gb/s on cost alone (it might still be worth it for lower latency), but clearly worth it at 60 Gb/s. Peering pays off as traffic grows, which is why large networks peer so widely.
Connecting the building
Getting fiber into a data center is a construction project in its own right, and it is often on the critical path of the whole development.
Outside plant and entrances
Carriers reach a site through outside plant: fiber cables in underground conduits (ducts), on utility poles, or in trenches along roads and railways. At the property line, cables enter maintenance holes (manholes) or handholes, then run through the owner's conduits into a building entrance room. Good practice is at least two entrance points on different sides of the building, each fed by a separate conduit path from a separate street, so that a single excavator cannot cut every connection. The entrance conduits are usually a bank of several 100 mm (4 in) ducts, with spare ducts for future carriers.
In the United States, interstate telecommunications is regulated by the FCC (Federal Communications Commission), and state public utility commissions regulate some intrastate services. Carriers building on public streets need right-of-way permits or franchise agreements from cities and counties, and federal law gives them access to utility poles on regulated terms. On private land the data center owner grants easements. Major carriers include AT&T, Verizon, Lumen and Zayo, along with cable operators such as Comcast and Charter and many regional fiber providers; a designer typically asks several to quote for diverse routes to the site early in planning.
Bringing new fiber to a greenfield site can take a year or more, especially if it involves permits for road crossings, railways, rivers or highways. It is one of the reasons site selection (DCE-410) looks closely at existing fiber routes.
Route diversity and shared risk
Two connections are only independent if they share nothing that can fail. Experienced designers check for shared risk: places where two "diverse" routes actually run in the same conduit, cross the same bridge, pass through the same carrier building or follow the same railway corridor. Two carriers may even lease fiber in the same cable from a third party. Carriers can provide route maps (often under a non-disclosure agreement) so that the owner can check physical separation.
Worked problem
What a shared section does to availability
A data center has two fiber routes, each with an availability of 99.5% (fiber cuts and repairs take about 44 hours a year on each). (a) What is the availability of the connection if the routes are fully independent? (b) What if both routes cross the same bridge, and that shared section has an availability of 99.95%?
Show solution
- (a) Parallel and independent: the connection fails only if both routes fail. Unavailability = \(0.005 \times 0.005 = 0.000025\), so availability = 99.9975%, about 13 minutes a year.
- (b) The shared section is in series with the parallel pair: \(A = 0.9995 \times 0.999975 = 0.99948\).
- Unavailability = 0.00052 of a year, about 4.6 hours.
Answer: (a) 99.9975%, about 13 minutes of outage a year. (b) About 99.95%, or 4.6 hours a year: the short shared section dominates. Diversity is only as good as its weakest shared point.
The same reasoning (series and parallel availability, from DCE-200) applies to entrance rooms, meet-me rooms, and the routers and power feeding them. A building with two carriers that both terminate in the same meet-me room on the same power feed has a single point of failure in the middle.
Latency and distance
Light in optical fiber travels at about two-thirds of its speed in a vacuum: roughly 204,000 km/s, which is about 4.9 µs per kilometer. Fiber seldom follows a straight line; it follows roads and railways, so the route is often 1.2 to 1.5 times the straight-line distance. Every millisecond matters to some applications: financial trading, online gaming, real-time collaboration and synchronous storage replication.
Worked problem
Round-trip time between two cities
The fiber route between data centers in New York and Ashburn, Virginia, is about 550 km. Estimate the round-trip time from propagation alone.
Show solution
- One way: \(550 \times 4.9 = 2695\) µs = 2.70 ms.
- Round trip: \(2 \times 2.70 = 5.4\) ms.
Answer: About 5.4 ms, before adding delays in routers and optical equipment, which typically add a few tenths of a millisecond. No equipment upgrade can beat this floor; only a shorter route can.
This physical limit shapes how cloud providers lay out their regions. Data centers in one availability zone, or a few zones in one region, are kept within roughly 100 km of each other so that synchronous replication stays within about a millisecond of round-trip time, while being far enough apart that a single local disaster is unlikely to hit all of them.
Long-distance and international traffic also travels on subsea cables that come ashore at cable landing stations. On the US East Coast, Virginia Beach has become an important landing point, with transatlantic cables such as MAREA and Dunant connecting back to the data centers of Northern Virginia.
Interconnection as a design driver
For a colocation operator, connectivity shapes the building: how many meet-me rooms and where, how many entrance conduits, how much space is reserved for carrier racks, and how fiber pathways run from the MMRs to every customer suite. For a hyperscale campus, it shapes the site: diverse fiber routes to the campus, dark fiber to other campuses in the region, and enough duct capacity for decades of growth. For an AI training campus, outside connectivity may be modest compared with the enormous internal fabric, but it still needs diverse routes for data ingestion, management and inference traffic.
In every case, the engineer's job is to make sure that the physical paths, rooms, power and security support the network relationships the business depends on, and that no single conduit, room or power feed can sever them.
Common mistakes
MistakeAssuming two different carriers guarantee two physically diverse routes.
InsteadCarriers often share conduits, bridges or leased fiber. Ask for route maps and check for shared risk.
MistakeBringing both carrier entrances into the same side of the building or the same meet-me room.
InsteadUse separate entrances on different sides, separate conduit paths and, in larger buildings, two meet-me rooms on separate power.
MistakeBilling or budgeting transit on average traffic.
InsteadTransit is usually billed at the 95th percentile of 5-minute samples, which is well above the average.
MistakeExpecting faster equipment to cut long-distance latency.
InsteadPropagation (about 4.9 µs per km of fiber route) sets a floor; only a shorter route reduces it.
MistakeLeaving fiber to the end of a project.
InsteadNew fiber routes and permits can take a year or more; engage carriers during site selection.
Summary and key terms
- The internet is tens of thousands of autonomous systems that exchange routes with BGP.
- Transit is paid access to the whole internet; peering is direct exchange of each other's customer traffic, often settlement-free.
- Networks meet at internet exchange points, through private interconnects and in carrier hotels.
- Inside colocation buildings, carriers terminate in meet-me rooms and customers connect through cross-connects.
- Carriers sell dark fiber, wavelengths, Ethernet services, IP transit, private WANs and cloud on-ramps.
- Transit is often billed at the 95th percentile of 5-minute samples (top 5% discarded), with a monthly commit.
- Resilience requires separate entrances, conduit paths and rooms, with no shared risk; a short shared section can dominate availability.
- Fiber latency is about 4.9 µs per km of route; synchronous replication limits zones to roughly 100 km apart.
- Autonomous system (AS)
- A network under one administration with its own routing policy, identified by an AS number.
- BGP
- Border Gateway Protocol: the routing protocol networks use to exchange reachability information with each other.
- IP transit
- A paid service in which a provider carries a customer's traffic to and from the whole internet.
- Peering
- Two networks exchanging traffic directly between their own customers, often without payment.
- Internet exchange point (IXP)
- A shared switching fabric where many networks connect and peer with each other.
- Private network interconnect (PNI)
- A dedicated link between two networks, usually a cross-connect within one building.
- Cross-connect
- A physical cable, usually fiber, linking two customers' equipment in a data center, typically through the meet-me room.
- Meet-me room (MMR)
- A secure room where carriers and customers terminate cables so they can be cross-connected.
- Carrier-neutral
- A data center that lets any carrier bring fiber in and lets customers buy from any of them.
- Carrier hotel
- A building, usually downtown, where very many networks interconnect.
- Dark fiber
- Unlit fiber strands leased so that the customer provides its own optical equipment.
- Wavelength service
- A dedicated optical channel on a carrier's DWDM system, usually 10 to 400 Gb/s.
- Cloud on-ramp
- A private connection into a cloud provider's network from a data center.
- Burstable (95th percentile) billing
- Billing at the 95th percentile of 5-minute traffic samples over a month.
- Route diversity
- Physically separate fiber paths and building entrances so a single event cannot cut all connections.
- Shared risk
- A point where supposedly separate paths share a conduit, bridge, building or other single cause of failure.
- FCC
- Federal Communications Commission: the federal regulator of interstate and international communications in the United States.
Practice problems
Work each problem on paper first, then reveal the answer to check.
What is the difference between transit and peering?
Show answer
Transit is a paid service giving access to the entire internet. Peering exchanges only the two networks' own customer traffic, often without payment.
How many five-minute samples are discarded in 95th-percentile billing for a 31-day month?
Show answer
31 × 288 = 8928 samples; 5% = 446.4, so 446 samples (about 37 hours).
A port's 95th percentiles are 3.4 Gb/s inbound and 4.8 Gb/s outbound, the commit is 5 Gb/s and the price is $0.30 per Mb/s. What is the monthly bill?
Show answer
The higher direction is 4.8 Gb/s, below the 5 Gb/s commit, so the bill is 5000 × 0.30 = $1500.
Moving 30% of 20 Gb/s of traffic to peering would cost $1800 per month. At $0.20 per Mb/s transit, is it worth it?
Show answer
Saving = 0.3 × 20,000 × 0.20 = $1200 per month, less than $1800. Not worth it on cost alone.
Estimate the propagation round-trip time over a 1200 km fiber route.
Show answer
1200 × 4.9 µs = 5.88 ms one way; about 11.8 ms round trip.
A synchronous replication system needs a round-trip time under 2 ms, and equipment adds 0.3 ms. What is the longest fiber route allowed?
Show answer
Propagation budget 1.7 ms round trip = 0.85 ms one way; 850 µs ÷ 4.9 µs/km = 173 km.
Two independent routes each have 99.8% availability. What is the combined availability, in minutes of outage per year?
Show answer
Unavailability = 0.002² = 4 × 10⁻⁶; 99.9996%, about 2.1 minutes a year.
The routes in the previous question share a 99.99%-available conduit section. What is the new availability?
Show answer
0.9999 × 0.999996 = 0.999896, about 55 minutes a year: the shared section dominates.
Why do colocation operators value having many carriers in a building?
Show answer
Customers can choose and combine carriers, prices are competitive, resilience is better, and networks attract other networks, making the building more valuable for interconnection.
List three things a designer should check to make sure two fiber connections are truly diverse.
Show answer
Separate building entrances on different sides; separate conduit paths and streets with no shared bridges or corridors; different carrier routes and central offices (no shared leased cable); and separate meet-me rooms and power.
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