[128579] in North American Network Operators' Group
Re: Cost of transit and options in APAC
daemon@ATHENA.MIT.EDU (Patrick W. Gilmore)
Thu Aug 12 16:37:32 2010
From: "Patrick W. Gilmore" <patrick@ianai.net>
In-Reply-To: <20100812020138.GB11895@hezmatt.org>
Date: Thu, 12 Aug 2010 14:29:02 -0400
To: NANOG list <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
On Aug 11, 2010, at 10:01 PM, Matthew Palmer wrote:
> On Wed, Aug 11, 2010 at 12:53:18PM -0700, Joel Jaeggli wrote:
>> On 8/11/10 12:29 PM, Franck Martin wrote:
>>> Nice to see this change....
>>>=20
>>> APAC has been obliged to pay the cost to peer with the US (long
>>> distance links are expensive). Now that US wants to peer with Asia,
>>> pricing may become more balanced...
>>=20
>> I think the question is more like why am I being quoted $100 A =
megabit
>> in India for transit in India? Not why am I being charged for for the
>> transport cost across the pacific.
>=20
> Because the percentage of traffic that actually stays in India, as =
compared
> to that which transits the Pacific, is miniscule. If you're asking =
for
> enough bandwidth / throwing enough money around, I'm sure you could =
get an
> Indian-only deal, but you'd need to make it worth the while for the =
provider
> to setup the config, given that either way they'll be getting your =
money,
> and you won't be using a lot of transpacific traffic. Note also that =
it's
> unlikely that the provider will be getting a differentiated rate from =
their
> upstreams for internal traffic, and you may have to settle for =
peering-only
> access (if your chosen provider is connected to any peering points).
You do not need to throw a lot of money around. Lots of places in Asia =
give you separate in-country and "international" rates, and charge you =
accordingly. People have been talking about distance-sensitive pricing =
for IP traffic for years, without realizing people have been doing it in =
Asia for years.
Back to topic of why prices are high in some places (and it is not just =
Asia), it is trivial to prove objectively that monopoly power keeps =
prices ridiculously high. Before anyone jumps on me, there are many =
reasons for high prices. Monopoly power is only one, but clearly and =
obviously the biggest one.
When I say "objectively", I mean it. Look at any country which has gone =
through any type of transition from "gov't owned monopoly telco" to =
"competition-based market". South Africa instantly springs to mind. =
Prices are still high, but have dropped, what, 75% in just a year or two =
once the monopoly power was broken? And this is after a decade or more =
of little to no decrease.
Of course, this does not mean .za will have $1/Mbps transit like the US =
any time soon. As I said, there are other factors - geography, scale, =
local economy, even import policies, etc. But getting prices to go from =
US$2000/Mbps to, say, $100/Mbps is more important than the $100 -> $1 =
drop. (Hrmm, I wonder who will say "the first is only 20 times, the =
second is 100 times!" to prove me wrong? :) Plus there are a myriad of =
factors keeping that last step from happening, not just one. So wich do =
you think is more important, the monopoly power or the dozens of other =
factors?
That said, this is not really on-topic for NANOG. So if you would like =
to argue the point, please e-mail privately, or let's take it to another =
list.
End of day, the important thing is to break the monopoly. After that, =
prices will almost always drop, then you can work on other stuff.
--=20
TTFN,
patrick
