Are the Settlement-Free Peering Policy Requirements for ISPs and CDNs Based on Network Costs?

In this paper, we construct a network cost model to understand the rationality of common requirements on the number and location of interconnection points. We also wish to understand if it is rational to apply these requirements to interconnection between an internet service provider (ISP) and a content delivery network (CDN). We construct a model of ISP traffic-sensitive network costs. We consider an ISP that offers service across the US. We parameterize the model using statistics about the population and locations of people in the contiguous US. We consider peering at the locations of the largest interconnection points in the US. We model traffic-sensitive network costs in the ISP’s backbone network, middle-mile networks, and access networks. These costs are thus functions of routing policies, distances, and traffic volumes.