Peering and Network Cost

Sun Apr 19 14:00:30 UTC 2015

Getting networks to connect to an ix is Uber expensive in relation to the
overall costs. Specifically before critical mass is reached. Getting the
first X gig of traffic is a hard problem that takes money to fix.
On Apr 19, 2015 7:51 AM, "Mike Hammett" <nanog at ics-il.net> wrote:

> There is a revenue floor where it doesn't matter how much or how little
> service is provided, simply having a customer period requires a certain
> amount of revenue.
>
> Route servers, IXP Manager, AS112, route collectors, DNS, etc. all cost
> money.
>
> Maintenance costs money. The organization itself costs money. Upgrades
> cost money. Racks cost money. Power costs money.
>
> I'm sure I've left some things out.
>
>
>
>
> -----
> Mike Hammett
> Intelligent Computing Solutions
> http://www.ics-il.com
>
>
>
> ----- Original Message -----
>
> From: "Baldur Norddahl" <baldur.norddahl at gmail.com>
> To: nanog at nanog.org
> Sent: Sunday, April 19, 2015 4:23:53 AM
> Subject: Re: Peering and Network Cost
>
> So why is IX peering so expensive?
>
> Again if I look at my local IX (dix.dk) they have about 40 networks
> connected. Each network pays minimum 5800 USD a year. That gives them a
> budget of 240000+ USD a year.
>
> But the only service is running an old layer 2 switch.
>
> Why do these guys deserve to be paid that much for so little?
>
> Recently we had a competitor show up in the form of Netnod. However the
> pricing is almost exactly the same, although Netnod tries to deliver
> slightly more service.
>
> Seems to me that this an unsound market. The 40 dix particants should
> donate 1000 USD once and get a new layer 2 switch. Why does that not
> happen?
>
> Does not look like it is a local phenomenon either. IX'es all over are way
> more expensive than they should be.
>
> Regards
>
> Baldur
>
>