(possible Flame bait) Backbone Building vs Transit purchasing

Fri Mar 21 23:27:12 UTC 2003

> > *IS* there a common sense number or an equation (better) anyone has worked
> > out to figure whether building a backbone (national/international) to
> > peering points (i.e. extending an existing, operational service network) to
> > improve/add peering vs continuing to buy transit?
> 
> If you are assuming that this is not about performance then surely this is a 
> very simple thing to work out?
> 
> Cost of transit T = cost of transit/committed Mbs
> Cost of peering P = (cost of: circuits+routers+colo+nap)/Mbs of actual traffic
> 
> If P>T go and push your network out to the peering point it will save you money. 
> 
> Now.. at present your problem is that T is very low, and certainly lower than P 
> unless you are moving quite a lot of traffic.. 1Gb is a lot of traffic, so all 
> you need to do is to figure out the costs in getting to a NAP and how much 
> traffic you can shift.

[skip]

You are forgetting:

salaries
depreciation
leases
IRU
financing expenses
...

etc etc etc

Alex