Current street prices for US Internet Transit

Mon Aug 16 18:05:42 UTC 2004

On Aug 16, 2004, at 1:16 PM, William B. Norton wrote:

> 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.

Mind if I ask why you think it is "unhealthy"?

I suppose an argument could be made that this is "below cost", but 
since you are not a provider and do not sell transit, I would hope the 
people doing so know their costs and margins better than you do.

Unfortunately, I doubt any transit provider offering these prices will 
tell us if they are below cost.  (Someone care to prove me wrong? :-)  
But since this is not 1999, I'm guessing at least SOME of them are 
profitable, and therefore the costs are not necessarily unhealthy.  So 
perhaps you should be more careful of your characterization?

> 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.)

Having been a "Tier 2" (several, actually :), I can tell you that it is 
not "simply reselling Tier 1 BW" - which you should know, providing a 
service to allow Tier 2s to do more than resell transit from a bigger 
network....

> 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.

Those are apples & oranges.  You cannot compare bandwidth in countries 
without the same fiber infrastructure as the US ( and with government 
owned PTTs controlling almost all access to the US market.  Not to 
mention other differences which just don't translate.

I notice that you do not list a single EU country.  Prices there are 
much closer to the US.

Anyway, I suspect "more turbulence in the industry" for the next few 
millennia, no matter where prices are. :-)

-- 
TTFN,
patrick