Peering and Network Cost

Tore Anderson tore at
Thu Apr 16 05:25:45 UTC 2015

* Baldur Norddahl <baldur.norddahl at>

> Transit cost is down but IX cost remains the same. Therefore IX is longer
> cost effective for a small ISP.
> As an (non US) example, here in Copenhagen, Denmark we have two internet
> exchanges DIX and Netnod. We also have many major transit providers,
> including Hurricane Electric and Cogent.
> Netnod price for a 1 Gbps port is 40000 SEK = 4500 USD / year
> DIX is 40000 DKK = 5700 USD / year
> is offering 1 Gbps flatrate for 450 USD / month list price = 5400
> USD /year.
> Cogent can match that.
> So why would a small ISP pay 4500 USD for a service with no guarantee of
> how much traffic they will be able to peer away?

We're in a similar situation here; transit prices has come down so much
in recent years (while IX fees are indeed stagnant) that I am certain
that if I were to cut all peering and buy everything from a regional
tier-2 instead, I'd be lowering my total MRC somewhat, without really
reducing connectivity quality to my (former) peers.

For us, the primary reason that keeps us peering is DDoS prevention. Our
traffic is mostly regional, so if a customer of mine gets hit with a
volumetric DDoS attack that would saturate my IP transit lines and cause
collateral damage, that's no big deal as we can just RTBH the customers
prefix towards our transit providers. The customer is only mildly
inconvenienced by this as, say, 90% of his traffic goes to our peers.
Without peering the attack would succeed because my RTBH would
completely offline my customer.


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