Level 3, XO Communications Enter Long-Term Settlement-Free Internet Traffic Exchange Agreement
Level 3 Communications, Inc. (NYSE: LVLT) and XO Communications today announced they have entered into a long-term settlement-free Internet traffic exchange agreement, also commonly referred to as a peering agreement, that is based on the bit-mile balance approach.
The peering agreement ensures that customers on each of the two Internet service providers' networks can continue to exchange data with customers on the other service provider's network efficiently and cost-effectively. It is based on the bit-mile peering approach which measures both the volume of traffic exchanged and the distance over which that traffic is carried by each network. In order to keep the relationship equitable and settlement-free, both networks carry approximately the same bit-miles of data, a model that promotes efficient, high-quality service for customers, while ensuring a balanced cost burden across each network.
As the Internet continues to grow and evolve, this approach resolves the imbalances that can occur in traffic patterns and that would otherwise result in increased network costs to one provider or the other involved in a peering relationship. When asymmetry occurs, the Internet traffic carriers agree to adjust traffic