Current street prices for US Internet Transit

Tue Aug 17 17:55:06 UTC 2004

First - As for whether the US Transit market is healthy or unhealthy... I 
am not privy to the ISP calculations that demonstrate financial viability 
at these prices, so I can only go on the sentiments expressed by folks that 
have done the analysis for their companies and have shared their views with 
me or my colleagues.

Having said that...It certainly appears that the majors can't make money in 
this transit market, and they would probably say that the bottom feeders 
are greasing the skids to financial ruin for this industry.

At 08:50 PM 8/16/2004 -0700, Michel Py wrote:
>The really interesting question IMHO is this: does said content company
>also peers, or just buys transit? I read in Bill Norton's papers that a
>content company is a good candidate to peer with large tier-2s.

Well, it is the *large* network-savvy Content Guys that I see peering quite 
a bit of their traffic. For these guys the motivation seems to be the 
performance benefits (it is all about pages coming up fast, end user 
behavior stuff), but the financial savings isn't far behind. FOr these guys 
the savings are still in the millions per annum. And these are the guys 
that do enough volume to negotiate transit prices in the teens.

> >         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
>
>Someone mentioned that this was comparing apples to oranges. Indeed it
>is, <stuff deleted>

I would disagree that these are apples and oranges comparisons - these are 
real prices (normalized to USD) for transit that someone in the country 
would pay to access the big 'I' Internet. The Peering Coordinators I spoke 
with that have expanded into these markets did point out that each Peering 
Ecosystem differs - I think I documented about 10 differences in the Asia 
Pacific Peering Guidebook - but, ultimately, they will need to buy transit 
in that market. So these numbers are useful for budgeting for network 
expansion into Asia.

I would also share that the local loop prices in these other markets vary 
widely ; an OC-3 local loop in Singapore may be twice the cost of a 
distance insensitive OC-3 local loop in Hong Kong. To that end, the 
business cases for peering will be quite different.

Bill