Martin J. Levy from Cloudflare did a presentation about remote peering possibly being a bad thing. In this presentation, he brings up several valid points.
Some thoughts of my own.
Yes, remote peering is happening. One thing touched upon is the layer3 vs layer2 traffic. We at MidWest-IX only allow remote peering at a layer2 level unless it is groups like routeviews.org or other non-customer traffic situations.
Many providers are overselling their backbone and transit links. This oversubscription means access to content networks in places that do not have an exchange or places that do have the content locally can suffer through no fault of the ISP or the content provider. We have situations with content folks like Netflix who do not join for-profit IXes at the moment, keeping the content further away from customers. These customers are reaching Netflix through the same transit connections many other providers are. The can result in congested ports and poor quality for the customer. The ISP is left trying to find creative ways to offload that traffic. An Internet Exchange is ideal for these companies because cross-connect charges within data centers are on the rise.
When we first turned up MidWest-IX, now known as FD-IX, in Indianapolis we used a layer2 connection to Chicago to bring some of the most needed peers down to our members. This connection allowed us to kick-start our IX. We had one member, who after peering with their top talkers, actually saw an increase in bandwidth. The data gained told the member that their upstream providers were having a bottleneck issue. They had suspected this for a while, but this confirmed it. Either the upstream provider had a congested link, or their peering ports were getting full.
As content makes it way closer remote peering becomes less and less of an issue. There are many rural broadband companies just now getting layer2 transport back to carrier hotels. These links may stretch a hundred miles or more to reach the data center. The rural broadband provider will probably never get a carrier hotel close to them. As they grow, they might be able to afford to host caching boxes. The additional cost and pipe size to fill the caches is also a determining factor. The tradeoff of hosting and filling multiple cache boxes outweighs the latency of a layer2 circuit back to a carrier hotel.
I think remote peering is necessary to by-pass full links which give the ISP more control over their bandwidth. In today’s race to cut corners to improve the bottom line having more control over your own network is a good thing. By doing a layer2 remote peer you might actually cut down on your latency, even if your upstream ISP is peered or has cache boxes.