Current street prices for US Internet Transit

Mon Aug 16 17:16:36 UTC 2004

Thanks to all who replied with data, and yes, the pricing was all 95th 
percentile.

Wow - the U.S. has an amazingly unhealthy and cut throat transit market in 
2004.

About 20 folks responded, most saying the Peering Coordinator quotes 
(below) sounded about right.

> > ISP Transit Commits and Prices
> 
>---------------------------------------------------------------------------------------------------------------------
> > if you commit to    1M per month you will pay about $125/Mbps
> > if you commit to   10M per month you will pay about $ 60/Mbps
> > if you commit to  100M per month you will pay about $45/Mbps
> > if you commit to 1000M per month you will pay about $30/Mbps

A couple people said these prices were TOO HIGH, particularly for the gig 
commit, although several multi-gig commits came in tiered; for example, 
$45/Mbps for 1G commit, $35 for 2G, etc. on down to $21 for 8G 
commit.  (One Tier 2 ISP said that they sold 1G commit as low as $18/Mbps, 
presumably simply reselling Tier 1 BW so the difference may be negligible.)

Three said that these transit prices were TOO LOW, in one case they paid 
about double these numbers. It was interesting that these three were a 
content company, a cable company and a DSL company, folks who traditionally 
don't sell transit. Maybe they are in a retail market for transit, while 
everyone else buys in the wholesale market.

Since so many said these prices are about right, I'll use them for the 
Peering versus Transit analysis. A couple people pointed to the 10M commit 
being closer to $80/Mbps, so that may be an adjustment.

Given the adjustment, I thought you might be interested in how the U.S. 
transit prices compare against a handful of other Peering Ecosystems:

         The Cost of Internet Transit in

Commit  AU      SG      JP      HK      USA
1 Mbps  $720    $625    $490    $185    $125
10 Mbps $410    $350    $150    $100    $80
100 Mbps        $325    $210    $110    $80     $45
1000 Mbps       $305    $115    $50     $50     $30

Round numbers anyway FWIW. Hope this helps. I feel bad for those selling 
transit these days - at these prices, margins must be mighty thin, and I 
suspect we will see some more turbulence in the industry.

Bill