PSINet, Exodus Terminate Peering Agreement

Last week Exodus Communications Inc.
notified its customers that PSINet Inc. would be
disconnecting its DS3 lines in place between the two networks on March 31.

The confidential communication stated that at the time of the
disconnection, all access to PSINet’s networks would be lost. The memo
further stated that the decision to disconnect was unilaterally made by
and against the request of Exodus (EXDS).

Exodus informed its customers that it was working on alternative agreements
to maintain connectivity and that it hoped to have a solution in place that
would minimize service disruptions.

Ellen Hancock, Exodus chief executive officer, said that the purely private
peering agreement with PSINet has successfully been rerouted through Sprint Corp. (FON).

“Thirty-minutes after the lines went down, Exodus traffic was transferred
through Sprint,” Hancock said.

Hancock added that Exodus was disappointed with PSINet’s refusal to
transfer traffic at public exchange points when Exodus ordered two
additional DS3 lines from the global super carrier.

“We had two lines with PSINet and they refused to bring up two additional
lines for us because they did not consider us a Tier One supplier,” Hancock

“Peering was no longer free with PSINet and they refused to exchange
traffic at public access points. It’s very unusual for someone to refuse to
exchange traffic a public points,” Hancock added.

Doug Baj, PSINet spokesperson said it was unfortunate that its was forced
to decommission the direct link between PSINet and Exodus. However, Baj
said that Exodus decided to terminate the discussions, not PSINet.

“PSINet has negotiated for several months with Exodus on ways to continue
providing service to our customers,” Baj said. “However, Exodus has chosen
to discontinue the negotiations. PSINet remains ready to reestablish
connectivity if a mutually beneficial arrangement can be worked out between
our companies. The issue is in Exodus’ hands.”

Hancock said that Exodus serves up Internet content for nearly 30 percent
of the companies that comprise the World Wide Web.

“Exodus provides access to 25 to 30 percent of the content on the
Internet,” Hancock said. “Fifty of the top sites in the U.S. are housed at
Exodus. By terminating peering with Exodus, PSINet shut down its customs
quick access to Exodus’ customer content.”

PSINet’s Baj said that PSINet would not decommission links to other content
providers and that the issue is purely a business matter between PSINet and

“In terms of what customers can expect, since alternative transit routing
will take effect immediately, we expect this will alleviate inconveniences
that some customers have reported. We don’t expect this to have a negative
impact on the customers successfully connecting to Exodus,” Baj said.

Adam Wegner, Exodus senior vice president and general counsel, said PSINet
did not have the capacity to provide Exodus with the additional lines.

Before PSINet cut access with Exodus, we were reaching maximum capacity,”
Wegner said. “Sprint is providing capacity to PSINet, but PSINet is not
providing adequate capacity to Sprint in return.”

The Internet is essentially a number of peering arrangements that link many
different individual networks together. Network owners and access providers
work out peering agreements describing the terms and conditions to which
both parties are subject.

The issue between PSINet and Exodus is part of its private peering

gement whereby they agreed to bypass part of the public backbone
network through which most of the Internet traffic passes.

Peering is the arrangement for traffic exchange among Internet service
providers. Larger ISPs with their own backbone networks agree to allow
traffic from other large ISPs in exchange for traffic traversing over their
backbones. Upstream providers also exchange traffic with smaller ISPs so
that they can reach regional end points. In essence, peering agreements are
the sinews of the Internet that makes many different networks work together.

Peering requires the exchange and updating of router information between
both parties, typically using the Border Gateway Protocol (BGP). Peering
parties interconnect at network access points (NAPs) and at regional
switching points.

A private peering arrangement guarantees superior connectivity because a
connection takes fewer hops across the Internet backbone. Fewer hops
translates to less packet loss so businesses are assured of packet delivery
to nearly any destination.

PSINet offers transit and peering services to the carrier class and ISP
market segments. PSINet transit service provides carriers and ISPs with
global Internet connectivity for a fee while it offers free private peering
for ISPs to promote greater interconnectivity throughout the Internet.

The PSINet, Exodus peering tiff is an issue that begs to revisit the
“Peering Wars of 98” when Exodus and former BBN Planet, currently GTE Internetworking, Inc., squabbled over
peering agreements at the public exchanges.

Exodus’ Hancock said that both the Internet and Exodus have moved on since

“The industry has made tremendous moves forward since those days,” Hancock
said. “Some new procedures concerning peering with content providers were
put in place and the Internet is much more sophisticated.”

“The PSINet incident is unusual but I don’t see the Internet degrading,”
Hancock added. “Exodus has 200 peering agreements worldwide and 55 private
peering arrangements. PSINet is a minor part of our Internet traffic
representing about 1.5 percent of our total traffic. We consider anything
less than two percent to be in the ‘other’ category of carrier services.”

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