Current street prices for US Internet Transit
Patrick W Gilmore
patrick at ianai.net
Mon Aug 16 19:05:51 UTC 2004
On Aug 16, 2004, at 2:48 PM, Mikael Abrahamsson wrote:
> On Mon, 16 Aug 2004, Patrick W Gilmore wrote:
>
>> Unfortunately, I doubt any transit provider offering these prices will
>> tell us if they are below cost. (Someone care to prove me wrong? :-)
>
> Cisco 12400 OC192 cards are $225k listprice.
> You want to build a triangle with redundancy, ie 6 12400, 12 OC192
> cards,
> and you want to write this off in three years. You have a good
> discount at
> 50% and you're a good provider who is sincere about redundancy and only
> load your links 50%.
>
> This means you've forked out approx $1.4M in linecards, you can load
> these
> at 50% ie 10gigabit/s of revenue-generating traffic (at best), that
> means
> approx $4 per megabit per month in just linecard costs to haul this
> between your three metro areas. No customer facing interfaces, no
> interconnect to other ISPs etc. I estimate that the router+LC cost for
> any
> GSR/juniper based network is $10/per megabit at least.
>
> Now, you probably need to get yourself a DWDM system or some DWDM
> capacity
> to run this network over, and you probably want to hire some qualified
> people to run it. Selling 10gig of internet at $30/megabit gives you a
> total revenue of $3.6M per year.
>
> I have a hard time to see the business case in this at current prices.
Interesting analysis, but I really can't believe that 10 gigabits of
connectivity costs $30/Mbps. There is not a network in the US or
Europe who will not sell you a 10 gig commit for far less than
$30/Mbps, and I honestly do not believe that every network is selling
below cost.
Perhaps some of your assumptions are wrong. Perhaps people are making
due with OC48s. Perhaps there is less redundancy or more loading.
Perhaps your discount level is too low.
Who knows? Did you build an OC192 network with 6 routers and 3 links
and etc.? I didn't, so maybe I'm wrong. But given the choices of A)
Every single network on at least two continents is selling for less
than half their cost or B) An one page e-mail to NANOG may not reflect
the complex business realities of the telecommunications world - well,
I'll pick B.
But that's me. :)
> Would you pay $10 more per megabit to buy this capacity from someone
> using
> 12000 than from someone using let's say 7600 routers? That's something
> people will have to start to figure out the way we're headed here.
What do you care which routers they use? I've seen networks buy the
most expensive routers and run a crappy network, and I've seen people
run stable networks on the cheap.
I just want my bits to flow quickly and reliably. I don't really care
if you do it on Juniper, Force10, cisco, or tin-cans-and-string.
Why do you care?
--
TTFN,
patrick
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