Now let's have a look at charging. Exchange points need to be run at minimal cost to its member participants. Common examples we see today are the data center hosting an exchange point for free or IX members paying a flat annual fee on a cost recovery basis and sometimes for the larger exchange points receive differential pricing per port really depending on the cost of the line card and to provide the bandwidth required exchange points do not charge for traffic crossing the switch fabric the whole point of an exchange point is that they are appearing in a blur encouraging as much traffic as possible between members so let's look at each of the charging models the first one is where the data center hosts the exchange point for free the data center covers all costs relating to the i-x they even provide the switch and the supporting infrastructure they provide the operator cover because they benefit from the business that IX members and the customers bring to the DC and they benefit from the prestige of hosting the exchange point and its ancillary services this is the ideal scenario where the i-x does not charge members for anything at all perhaps the closest exchange point to this ideal scenario is the Seattle internet exchange another charging scenario is where the i-x members pay a flat fee where each member pays a small amount towards the i-x membership how this works is that the fee covers the cost of the switch and the Ethernet ports on it the cost of the operators support the data center cost so this will be power air-conditioning and rent for the colocation space cost of the i-x member association there may be some administrative requirements and a small contingency for new equipment and upgrades the total annual cost is shared equally amongst members the more members potentially lower costs for each member and the other charging model is the differential pricing purport with exchange point member pays according to the port speed they require note this is port speed not traffic so we see this happening most often in the biggest internet exchange parts where one line card may handle for 100 gig Ethernet ports or one line card may handle 24 10 gig Ethernet ports or one line card may handle 96 1 gig Ethernet ports for sake of example the pricing of a 96 port 1 gig e card is probably tenth of the price of a 24 port 10 gig Ethernet so the relative port cost is then passed on to the participants plus are sharing the cost of the switch chassis as well plus all the cost mentions in the flat fee model earlier IX members will pay according to the cost of provisioning their port speed an example of this might be the net nod exchange points in Sweden just some notes about charging before we finish this section smaller or new exchange points generally should be free or flat fee for members a one rack unit switch supporting 100 Meg 1 gig and 10 gig on all ports is sufficient many vendors have many types of switches that meet their specification and the members are responsible for providing suitable optics today this is considered the standard of how we start new internet exchange points larger or longer established exchange points have moved away from the one are you switch model to the chassis based switches where line cards have different costs. Members will quite often pay contribution to the cost of the line card, hence the port charge and often it includes the cost of the optics as well.

© Produced by Philip Smith and the Network Startup Resource Center, through the University of Oregon.

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