Peering and Network Cost

Fri Apr 17 15:53:49 UTC 2015

Peering and peering on an exchange are two different things.  Peering at an exchange has several benefits other than the simple cost of transit.  If you are in a large data center which charges fees for cross connects a single cross connect to an exchange can save you money.

Peering can also be a sales tool.  If you buy from a VOIP provider and are peered with them your latency and such will go down.  You also have more control over the QOS over that peer.  This can be spun into marketing.  

Not to toot our own horn but we put together a list of benefits for our IX customers:
http://www.midwest-ix.com/blog/?p=15

Also, a good article at:
http://blog.webserver.com.my/index.php/the-benefits-of-hosting-at-internet-exchange-point/

Justin

Justin Wilson j2sw at mtin.net
http://www.mtin.net  Managed Services – xISP Solutions – Data Centers
http://www.thebrotherswisp.com Podcast about xISP topics
http://www.midwest-ix.com Peering – Transit – Internet Exchange 

> On Apr 16, 2015, at 11:10 AM, Edward Dore <edward.dore at freethought-internet.co.uk> wrote:
> 
> On 16 Apr 2015, at 08:00, Tore Anderson <tore at fud.no> wrote:
> 
>> * Mark Tinka <mark.tinka at seacom.mu>
>> 
>>> On 16/Apr/15 07:25, Tore Anderson wrote:
>>>> We're in a similar situation here; transit prices has come down so
>>>> much in recent years (while IX fees are indeed stagnant) that I am
>>>> certain that if I were to cut all peering and buy everything from a
>>>> regional tier-2 instead, I'd be lowering my total MRC somewhat,
>>>> without really reducing connectivity quality to my (former) peers.
>>> 
>>> I wouldn't say exchange point prices are stagnant, per se. They may
>>> remain the same, but what goes up is the port bandwidth. It's not
>>> directly linear, but you get my point.
>>> 
>>> Again, the burden is on the peering members to extract the most out of
>>> their peering links by having as much peering as possible.
>> 
>> You appear to be assuming that an IP transit port is more expensive
>> then an IXP port with the same speed. That doesn't seem to always be
>> the case anymore, at least not in all parts of the world, and I expect
>> this trend to continue - transit prices seems to go down almost on a
>> monthly basis, while the price lists of the two closest IXPs to where
>> I'm sitting are dated 2011 and 2013, respectively.
>> 
>> Even if the transit port itself remains slightly more expensive than
>> the IXP port like in the example Baldur showed, the no-peering
>> alternative might still be cheaper overall because even if you're
>> peering most of your traffic you'll still need to pay a nonzero amount
>> for a (smaller or less utilised) transit port anyway.
>> 
>> Tore
> 
> Pricing at LINX here in the UK has definitely dropped over the past few years.
> 
> Back in 2011, the membership fee was £1500/year and it's now £1200/year.
> 
> 1G ports were £391/month on the first London LAN and £335/month on the second London LAN. They're now free on both LANs for the first port and then £270/month and £180/month respectively for additional ports.
> You can also get a free 1G port on each of the Manchester UK, Cardiff UK, Edinburgh UK and North Virginia/Washington DC USA LANs as part of the same membership fee (none of these additional LANs existed in 2011).
> 
> 10G ports were £1463/month on the first London LAN and £1250/month on the second London LAN. They're now £1030/month and £785/month respectively.
> 
> So that's what, a 20% reduction in membership fees and a 30% or higher (depending on the service) reduction in port fees in 4 years?
> 
> I don't have any quantifiable data on what has happened to IP transit costs over the same period, but for a point comparison I'd say that off the top of my head you can get a 1G CDR on a 10G port from a tier-1 provider in London for approximately the same cost as a 10G port at LINX these days, maybe slightly cheaper.
> 
> Edward Dore 
> Freethought Internet 