As a result of the evolving Internet, Level 3 continues to evaluate its IP Traffic Exchange Policy to assure that it fairly reflects existing market and network dynamics. Level 3 believes that traffic exchange agreements, which now take many forms, should reflect a core tenet of the Internet when it was founded: namely, that traffic exchange arrangements between network entities should be fair and equitable. Achieving this fair and equitable balance requires periodic review and revision to our IP Traffic Exchange Policy, especially given rapid changes in the Internet and the networks that support it. As a result, Level 3 expects this Policy to evolve from time to time and reserves the right to modify the Policy at any time, in Level 3’s sole discretion.
Types of Traffic Exchange
Level 3 currently offers varying types of traffic exchange to its global Internet network. The most prevalent type of traffic exchange is “high-speed IP transit,” which is a service offered by Level 3 that customarily allows access to all global routes on the Internet. Any entity desiring access to all of the global Internet routes accessible through the Level 3 network could purchase high-speed IP transit services from Level 3.
Other types of traffic exchange arrangements provide mutual access to a subset of routes, and may or may not involve payment between the two parties. Level 3 frequently negotiates a wide variety of traffic exchange agreements, some of which combine elements of traditional high-speed IP transit service with elements typically associated with settlement-free “peering” agreements. Like any commercially-negotiated arrangement, Level 3 believes such arrangements are appropriate when both parties benefit from the relationship. Settlement-free peering agreements allow parties to reach the subset of routes accessible through the Level 3 network to exchange traffic with customers that pay Level 3 for exchange of that Internet traffic, whether through our content delivery services, or high-speed IP transit services, direct Internet access services and other IP connectivity services. All settlement-free peering is memorialized by a written agreement between the parties, including sufficient detail and dispute resolution procedures that will assure continued exchange of Internet traffic on a scalable, resilient and secure manner.
General Principles of Settlement-Free Peering
There are some general overall principles that serve as the foundation for the specific settlement-free peering qualifications set forth in this Policy:
A party would be considered to be a candidate for settlement-free peering with Level 3 in the United States if it meets the following qualifications:
Meeting the general qualifications is not a guarantee that a peering relationship with Level 3 will be established. Level 3 will evaluate a number of business factors and reserves the right not to enter into a peering agreement with an otherwise qualified applicant, and additionally reserves the right to waive any of the qualifications set forth above. All settlement-free peering will be memorialized through execution of a contract, the terms and conditions of which are subject to negotiation.
Settlement-Free Peering Agreement
If Level 3 has determined to pursue settlement-free peering with a party that has requested it, the parties will negotiate the terms of a settlement-free peering agreement. Those terms will require parties to assure that, at all times during the term of the agreement, the “bit miles” for Internet traffic exchanged over the interconnection points and carried by one party will not be materially greater than the bit miles carried over the interconnection point for the other party. “Bit miles” would mean the product of (a) the number of air miles a party’s Internet network carries Internet traffic from the source or destination to the interconnection point where that traffic is handed to the other party (expressed as a traffic-weighted average, and including international miles), and (b) the number of gigabits carried by the party in the applicable Internet traffic. For example, if a party’s network carried 10 gigabits of content 1,500 air miles over the course of a day, the party’s bit miles for that day would be 15,000 gigabit-miles. The settlement-free peering agreement would include provisions requiring a party to remedy material discrepancies in bit mileage by using changes to routing, changes to interconnection locations, or purchase of services from the other party or from third parties.
In order to allow the other party to achieve approximate bit mileage equality, both parties must allow the other party to alter the location of interconnection points in a manner that will permit the other party to remedy material discrepancies in bit mileage (such as placing interconnection points closer to the origin/destination locations on the other party’s network, provided that such ports are utilized at appropriate levels). The interconnection locations would be mutually agreed such that the space and power used by each party would be roughly balanced, so that neither party charges the other for space and power for interconnection locations within their own facilities. Additionally, the interconnection locations must be locations which are on-net to both parties or, if not on-net to one party, either (a) open and accessible to be placed on-net by that party (i.e., the entity controlling access to the location will allow the other party to access the location via fiber or other connectivity without imposing charges for physical access to the facility), or (b) served on-net by at least three competitive providers of communications service.
The agreement would include provisions requiring joint capacity and forecasting reviews on a periodic basis. The agreement would require that each 10 Gbps interconnection point (whether initially-deployed, relocated to correct a bit mileage discrepancy, or augmented based on increased volume) would have to have an agreed minimum utilization. The agreement will also include provisions obligating both parties to augment interconnection point capacity on a timely basis when and as traffic meets specified thresholds. Other standard terms will be included in the settlement-free peering agreement negotiated between the parties.