Google, or anyone else they're engaging in data transfer with has also paid some network operator for bandwidth.
Google has no-charge peering agreements with the companies which are complaining. Google's traffic is so vast that a major carrier which doesn't peer with Google would endanger other high-volume peering agreements or (less likely) pay more in transit charges to reach Google.
Tier 1 carriers play this game amongst themselves all the time except Google is different since it's main business isn't being a telecom carrier. In this instance Google is well known and making money out of the web and old incumbents think it's their money. None of the old incumbent telcos want to reach the stage of Cogent (think Ryanair for internet transit) where they are just dumb pipes.
I always find it extremely humorous when some bean-counter working at a telco looks at a peering agreement like this and says "Holy crap! We're delivering their packets for free! We should be charging them money!" The reality is that having a peering agreement with Google saves that telco a ton of money. If they didn't have the direct peer with Google, one of their other Tier 1 peers would have to provide it to them, which would surely change the terms of their peering agreement (cost them $$$). What's more, if you can get traffic from a peer for free that is destined for an endpoint on your network, you ALWAYS want to take it. After all, you'll have to deliver the traffic anyway; better to get it for free than to pay someone else to transit it for you.
This is what happens when accountants try to understand how BGP works.
That’s interesting! Can’t they bring that up the next time they discuss their peering agreement with Google? Would they really stand no chance of negotiating a better deal – even if enough of them work together?
And why are they making this particular argument they are making now and don’t demand something which might sound more reasonable like regulating the market of peering agreements or something?
And why are they making this particular argument they are making now and don’t demand something which might sound more reasonable like regulating the market of peering agreements or something?
They are making this argument because Google is an easy target. Tier 1's have complained about low cost pricing from Cogent for a while now but complaining about a company few have heard of doesn't make headlines.
They don't demand peering regulation because I think they want to avoid the complex system of termination fees and special rules for smaller carriers etc. that regulation of the phone system brought. Peering works well; Google delivers traffic on a carrier-scale and other carriers will just have to accept it.
Google has no-charge peering agreements with the companies which are complaining. Google's traffic is so vast that a major carrier which doesn't peer with Google would endanger other high-volume peering agreements or (less likely) pay more in transit charges to reach Google.
Tier 1 carriers play this game amongst themselves all the time except Google is different since it's main business isn't being a telecom carrier. In this instance Google is well known and making money out of the web and old incumbents think it's their money. None of the old incumbent telcos want to reach the stage of Cogent (think Ryanair for internet transit) where they are just dumb pipes.