Peering and Network Cost

Fri Apr 17 11:51:09 UTC 2015

Transit should cost more than peering and should never cost little more than the cost of a cross connect or a switch, given the load of additional responsibilities. I counter that if peering is cheaper than transit, you need to talk to your IX about it's cost models. 

----- 
Mike Hammett 
Intelligent Computing Solutions 
http://www.ics-il.com 

----- Original Message -----

From: "Max Tulyev" <maxtul at netassist.ua> 
To: nanog at nanog.org 
Sent: Friday, April 17, 2015 5:33:04 AM 
Subject: Re: Peering and Network Cost 

If you have so much difference in price of IX connectivity (in general, 
including cabling, DWDM to one of major IX, colo, etc) - this only mean 
you should have a long talk with your current IP transit sales. Or just 
change it to another one. 

On 04/15/15 21:45, Mike Hammett wrote: 
> (Reply to thread, not necessarily myself.) 
> 
> If you can pull a third of your traffic off at the cost of a cross connect and another third at the cost of an IX port, now you can spend a buck or two a meg on what's left. Yes, I understand the cost of a cross connect or IX port is the $/megabit you're actually using and not $/megabit of capacity. 
> 
> 
> 
> 
> ----- 
> Mike Hammett 
> Intelligent Computing Solutions 
> http://www.ics-il.com 
> 
> 
> 
> ----- Original Message ----- 
> 
> From: "Mike Hammett" <nanog at ics-il.net> 
> To: "Max Tulyev" <maxtul at netassist.ua> 
> Cc: nanog at nanog.org 
> Sent: Wednesday, April 15, 2015 1:33:35 PM 
> Subject: Re: Peering and Network Cost 
> 
> Very true. I left it as I did given that I expect a similar profile from others in North America... on NANOG. 
> 
> Basically, wherever your region's streaming video or application updates come from. ;-) 
> 
> 
> 
> 
> ----- 
> Mike Hammett 
> Intelligent Computing Solutions 
> http://www.ics-il.com 
> 
> 
> 
> ----- Original Message ----- 
> 
> From: "Max Tulyev" <maxtul at netassist.ua> 
> To: nanog at nanog.org 
> Sent: Wednesday, April 15, 2015 1:27:45 PM 
> Subject: Re: Peering and Network Cost 
> 
> Not actually Facebook net, but Akamai CDN. Not a Google (peer), but GCC 
> node ;) 
> 
> It is varying from location to location. For example here in Ukraine we 
> (still) have 1st place for traffic amount from Vkontakte (mostly music 
> streams), second from EX.ua (movie store), but almost none NetFlix, Hulu 
> or Amazon. And you can't get both of them in a good quality neither at 
> IXes, nor at Tier1. 
> 
> I think in another locations, for example in India, traffic profile will 
> be different from both of us, and have some local specific as well. 
> 
> On 04/15/15 20:58, Mike Hammett wrote: 
>> It also depends on traffic makeup. Huge amounts of eyeball traffic go to (well, come from) NetFlix (a third) and Google, FaceBook, Hulu, Amazon, etc. (another third). It's comparable price to peer off those few huge sources of traffic and buy better transit than you would have than to just buy cheap transit. 
>> 
>> A lot of people tend to forget there are thousands of independent ISPs out there, usually in areas where there aren't a breadth of providers in the first place. Most could get buy with a single GigE (or even less). 
>> 
>> 
>> 
>> 
>> ----- 
>> Mike Hammett 
>> Intelligent Computing Solutions 
>> http://www.ics-il.com 
>> 
>> 
>> 
>> ----- Original Message ----- 
>> 
>> From: "Max Tulyev" <maxtul at netassist.ua> 
>> To: nanog at nanog.org 
>> Sent: Wednesday, April 15, 2015 12:50:41 PM 
>> Subject: Re: Peering and Network Cost 
>> 
>> Hi Roderick, 
>> 
>> transit cost is lowering close to peering cost, so it is doubghtful 
>> economy on small channels. If you don't live in 
>> Amsterdam/Frankfurt/London - add the DWDM cost from you to one of major 
>> IX. That's the magic. 
>> 
>> In large scale peering is still efficient. It is efficient on local 
>> traffic which is often huge. 
>> 
>> On 04/15/15 17:28, Rod Beck wrote: 
>>> Hi, 
>>> 
>>> 
>>> As you all know, transit costs in the wholesale market today a few percent of what it did in 2000. I assume that most of that decline is due to a modified version of Moore's Law (I don't believe optics costs decline 50% every 18 months) and the advent of maverick players like Cogent that broker cozy oligopoly pricing. 
>>> 
>>> 
>>> But I also wondering whether the advent of widespread peering (promiscuous?) among the Tier 2 players (buy transit and peer) has played a role. In 2000 peering was still an exclusive club and in contrast today Tier 2 players often have hundreds of peers. Peering should reduce costs and also demand in the wholesale IP market. Supply increases and demand falls. 
>>> 
>>> 
>>> I thank you in advance for any insights. 
>>> 
>>> 
>>> Regards, 
>>> 
>>> 
>>> - R. 
>>> 
>>> 
>>> Roderick Beck 
>>> Sales Director/Europe and the Americas 
>>> Hibernia Networks 
>>> 
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