Transit Tactic 5 - Playing the Market

Excerpts from The Internet Peering Playbook: Connecting to the Core of the Internet

In this tactic, the ISP plays one transit provider off the other to get the lowest price, but takes the process to an unethical extreme.

For example, verbal agreements and handshake deals start the process of playing each ISP against each other. Parallel rounds of negotiations are in play (see Figure 3-5) all the way to the signing of the contracts. The price points, even protected under a nondisclosure agreement (NDA), are used (or bluffed) during this process to negotiate better terms with the other ISPs. In some cases, even after signing, the price negotiations continue as alternative offers from the parallel negotiations chime in.

Figure 3-5. Tactic 5 - Playing the market participants against each other.

In this tactic, the buyer leverages the open market with parallel negotiations, information asymmetry, and bluffing to achieve the lowest possible transit price points.