Leaving public peering?

Jonas Frey jf at probe-networks.de
Wed Dec 2 15:48:29 CST 2009


Leo,

the DE-CIX pricing is now 500 Euro/month...since 1st october...see end
of that page.
Both DE-CIX and AMS-IX have decreased their pricing this year..almost at
the same time. I guess this is a move to stop company leaving public
exchanges...i have seen this trend, too.

Regards,
Jonas

On Wed, 2009-12-02 at 22:20, Leo Bicknell wrote:
> In a message written on Wed, Dec 02, 2009 at 12:46:46PM -0800, Lasher, Donn wrote:
> > I realized that paid transit is down at almost obscene levels, but is
> > that enough of a reason to increase hop-count, latencies, etc?
> > 
> > Why disconnect from public mostly-free peering?
> 
> Let's look at some economics.  I'm going to pick on some folks here,
> solely because they have prices online and because they are, I feel,
> representative prices.
> 
> http://www.cogentco.com/us/
> 
> "Home of the $4 Megabit!"  So we have transit prices at $4 per megabit.
> 
> http://www.de-cix.net/content/services/public-peering.html
> 
> A 1GE link to the exchange is 1000 euro per month, which is $1505 USD at
> the moment, let's call it $1500 for round numbers.
> 
> Now, your 1GE exchange port really shouldn't be run past 60% or so, if
> you want to provide good service.  So it's really $1500 for 600Mbits,
> or $2.50 per Megabit.
> 
> If you're an ISP you look at this and go, humm, I take in $4 from my
> customer, and hand $2.50 of it right back out to an exchange operator
> if I use public peering, making the exchange 62% of my costs right up
> front.  On the other hand, if I choose wisely where I private peer I
> can do it at places with a one-time fee for the cable, so there is
> $0 in MRC.  I have to buy a router port, sure, but it's also $0 MRC,
> just a capital asset that can get written off over many years.
> 
> This is the math with the $4 megabit advertised price.  The halls at
> Nanog are awash in $2 a megabit rumors if you have large enough commits
> (say, a few 10GE's).  Taking in $2 and paying the exchange operator
> $2.50 of it....well, that's not so good. :)
> 
> Transit prices have fallen enough that MRC's for switch ports, and
> even MRC's for fiber runs (are any of you still in a colo that wants
> $500 a month for a fiber run, I didn't think so) are eating up huge
> chunks of the inbound revenue, and thus just don't make sense.
> 
> Now, before someone points it out, yes, DECIX's rate per megabit is
> lower on a 10GE and a second port, so if you can move 2 ports of 10GE of
> traffic you can make it a lot cheaper.  Also, Cogents $4 a megabit is
> probably predicated on you being in the right location and having the
> right commit, if you need a DS-3 in West Nowhere you'll pay a higher
> rate, and that helps offset some of the costs.  I've oversimplified, and
> it's a very complex problem for most providers; however I know many are
> looking at the fees for peering ports go from being in the noise to a
> huge part of their cost structure and that doesn't work.






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