Peering and Network Cost

Sun Apr 19 12:49:20 UTC 2015

There is a revenue floor where it doesn't matter how much or how little service is provided, simply having a customer period requires a certain amount of revenue. 

Route servers, IXP Manager, AS112, route collectors, DNS, etc. all cost money. 

Maintenance costs money. The organization itself costs money. Upgrades cost money. Racks cost money. Power costs money. 

I'm sure I've left some things out. 

----- 
Mike Hammett 
Intelligent Computing Solutions 
http://www.ics-il.com 

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

From: "Baldur Norddahl" <baldur.norddahl at gmail.com> 
To: nanog at nanog.org 
Sent: Sunday, April 19, 2015 4:23:53 AM 
Subject: Re: Peering and Network Cost 

So why is IX peering so expensive? 

Again if I look at my local IX (dix.dk) they have about 40 networks 
connected. Each network pays minimum 5800 USD a year. That gives them a 
budget of 240000+ USD a year. 

But the only service is running an old layer 2 switch. 

Why do these guys deserve to be paid that much for so little? 

Recently we had a competitor show up in the form of Netnod. However the 
pricing is almost exactly the same, although Netnod tries to deliver 
slightly more service. 

Seems to me that this an unsound market. The 40 dix particants should 
donate 1000 USD once and get a new layer 2 switch. Why does that not happen? 

Does not look like it is a local phenomenon either. IX'es all over are way 
more expensive than they should be. 

Regards 

Baldur 