Peering and Network Cost

Mike Hammett nanog at
Wed Apr 15 17:58:02 UTC 2015

It also depends on traffic makeup. Huge amounts of eyeball traffic go to (well, come from) NetFlix (a third) and Google, FaceBook, Hulu, Amazon, etc. (another third). It's comparable price to peer off those few huge sources of traffic and buy better transit than you would have than to just buy cheap transit. 

A lot of people tend to forget there are thousands of independent ISPs out there, usually in areas where there aren't a breadth of providers in the first place. Most could get buy with a single GigE (or even less). 

Mike Hammett 
Intelligent Computing Solutions 

----- Original Message -----

From: "Max Tulyev" <maxtul at> 
To: nanog at 
Sent: Wednesday, April 15, 2015 12:50:41 PM 
Subject: Re: Peering and Network Cost 

Hi Roderick, 

transit cost is lowering close to peering cost, so it is doubghtful 
economy on small channels. If you don't live in 
Amsterdam/Frankfurt/London - add the DWDM cost from you to one of major 
IX. That's the magic. 

In large scale peering is still efficient. It is efficient on local 
traffic which is often huge. 

On 04/15/15 17:28, Rod Beck wrote: 
> Hi, 
> As you all know, transit costs in the wholesale market today a few percent of what it did in 2000. I assume that most of that decline is due to a modified version of Moore's Law (I don't believe optics costs decline 50% every 18 months) and the advent of maverick players like Cogent that broker cozy oligopoly pricing. 
> But I also wondering whether the advent of widespread peering (promiscuous?) among the Tier 2 players (buy transit and peer) has played a role. In 2000 peering was still an exclusive club and in contrast today Tier 2 players often have hundreds of peers. Peering should reduce costs and also demand in the wholesale IP market. Supply increases and demand falls. 
> I thank you in advance for any insights. 
> Regards, 
> - R. 
> Roderick Beck 
> Sales Director/Europe and the Americas 
> Hibernia Networks 
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