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From: "Patrick W. Gilmore" <patrick@ianai.net> In-Reply-To: <1259790509.31045.144.camel@wks02.probe-networks.de> Date: Wed, 2 Dec 2009 19:00:51 -0500 To: NANOG list <nanog@nanog.org> Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org On Dec 2, 2009, at 4:48 PM, Jonas Frey wrote: > the DE-CIX pricing is now 500 Euro/month...since 1st october...see end > of that page. > Both DE-CIX and AMS-IX have decreased their pricing this year..almost = at > the same time. I guess this is a move to stop company leaving public > exchanges...i have seen this trend, too. That is not why LINX lowers its prices. (I cannot say why AMS-IX lowers = its prices.) LINX is a member-based organization. The member _own_ the exchange. = They are paying themselves, and they only pay themselves as much as it = costs to run the exchange. With more members, more scale, and advances = in equipment, unit (i.e. port) costs go down. In a cost-recovery model, that means prices drop. LINX dropped prices mid-year 2009, and are dropping prices again in = January 2009. AMS-IX dropped prices once in that time. DE-CIX actually = raised its prices for many members, so they could lower their prices for = others. Interesting strategy.... --=20 TTFN, patrick > On Wed, 2009-12-02 at 22:20, Leo Bicknell wrote: >> In a message written on Wed, Dec 02, 2009 at 12:46:46PM -0800, = Lasher, Donn wrote: >>> I realized that paid transit is down at almost obscene levels, but = is >>> that enough of a reason to increase hop-count, latencies, etc? >>>=20 >>> Why disconnect from public mostly-free peering? >>=20 >> Let's look at some economics. I'm going to pick on some folks here, >> solely because they have prices online and because they are, I feel, >> representative prices. >>=20 >> http://www.cogentco.com/us/ >>=20 >> "Home of the $4 Megabit!" So we have transit prices at $4 per = megabit. >>=20 >> http://www.de-cix.net/content/services/public-peering.html >>=20 >> A 1GE link to the exchange is 1000 euro per month, which is $1505 USD = at >> the moment, let's call it $1500 for round numbers. >>=20 >> Now, your 1GE exchange port really shouldn't be run past 60% or so, = if >> you want to provide good service. So it's really $1500 for 600Mbits, >> or $2.50 per Megabit. >>=20 >> If you're an ISP you look at this and go, humm, I take in $4 from my >> customer, and hand $2.50 of it right back out to an exchange operator >> if I use public peering, making the exchange 62% of my costs right up >> front. On the other hand, if I choose wisely where I private peer I >> can do it at places with a one-time fee for the cable, so there is >> $0 in MRC. I have to buy a router port, sure, but it's also $0 MRC, >> just a capital asset that can get written off over many years. >>=20 >> This is the math with the $4 megabit advertised price. The halls at >> Nanog are awash in $2 a megabit rumors if you have large enough = commits >> (say, a few 10GE's). Taking in $2 and paying the exchange operator >> $2.50 of it....well, that's not so good. :) >>=20 >> Transit prices have fallen enough that MRC's for switch ports, and >> even MRC's for fiber runs (are any of you still in a colo that wants >> $500 a month for a fiber run, I didn't think so) are eating up huge >> chunks of the inbound revenue, and thus just don't make sense. >>=20 >> Now, before someone points it out, yes, DECIX's rate per megabit is >> lower on a 10GE and a second port, so if you can move 2 ports of 10GE = of >> traffic you can make it a lot cheaper. Also, Cogents $4 a megabit is >> probably predicated on you being in the right location and having the >> right commit, if you need a DS-3 in West Nowhere you'll pay a higher >> rate, and that helps offset some of the costs. I've oversimplified, = and >> it's a very complex problem for most providers; however I know many = are >> looking at the fees for peering ports go from being in the noise to a >> huge part of their cost structure and that doesn't work. >=20 >=20 >=20
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