Peering - Benefits?

Patrick W. Gilmore patrick at
Fri Oct 31 05:13:03 UTC 2008

On Oct 31, 2008, at 1:05 AM, vijay gill wrote:
> On Thu, Oct 30, 2008 at 9:41 PM, Patrick W. Gilmore  
> <patrick at> wrote:
>> On Oct 30, 2008, at 10:19 PM, vijay gill wrote:
>>> This is probably going to be a somewhat unpopular opinion, mostly
>>> because people cannot figure out their COGS. If you can get transit
>>> for cheaper than your COGS, you are better off buying transit  
>>> There are some small arguments to be made for latency and
>>> 'cheap/free' peering if you are already buying transit at an  
>>> exchange
>>> and your port/xconn fee is cheaper than your capital/opex for the
>>> amount of traffic you peer off.
>> One of us is confused.
> precisely.

Well, I could also be confused, which would make two of us.  But I  
will agree with you here and say precisely one.

>> Transit is _part_ of COGS, at least for most of the group reading  
>> this list.
>> Finding transit "cheaper than your COGS" just means cheaper than  
>> you get it
>> now.  And that in no way way means you should dump peering.  What  
>> if peering
>> is cheaper than transit?
> Cost of transport, opex and capital to build out to a peering point,
> ports for interconnect, vs the expected money saved by peering away
> sufficient traffic is the analysis that will inform your strategy.
> This is why I said if you are already at a place where you are buying
> transit, it probably worth it to peer with the folks locally.

None of that is in question.  However, you also said: "If you can get  
transit for cheaper than your COGS, you are better off buying transit  
and not peering."  So either you were confused, or .. well, let's be  
generous and say you were confused. :-)

I'm glad you have cleared your confusion.


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