[144944] in North American Network Operators' Group
Re: Question on 95th percentile and Over-usage transit pricing
daemon@ATHENA.MIT.EDU (Patrick W. Gilmore)
Wed Sep 21 20:07:29 2011
From: "Patrick W. Gilmore" <patrick@ianai.net>
In-Reply-To: <1316656684.2498.36.camel@Pradeep>
Date: Wed, 21 Sep 2011 20:06:38 -0400
To: NANOG list <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
On Sep 21, 2011, at 9:58 PM, Pradeep Bangera wrote:
> I have a fundamental question regarding 95th percentile pricing. I =
will
> make some prerequisite assumptions to set $/Mbps values before posting
> my actual question.
>=20
> Eg., For 1Gbps commitment, I will pay roughly $3/Mbps. Similarly for
> 10Gbps, 100Gbps I may pay $2/Mbps and $1/Mbps.
>=20
> This appears like a sub-linear economy of scale pricing model followed
> in transit pricing.
>=20
> Now if I commit 1 Gbps over a 10Gbps provisioned link, I will pay =
fixed
> monthly fee of $3000 for the 95th peak not exceeding the committed =
rate
> of 1Gbps.
>=20
> Now if my 95th peak is above the committed rate, say, 2Gbps or 4 Gbps =
or
> 8 Gbps, I believe I have to pay: $3000 + =
[over-usage_bandwidth_charges]
> monthly.
>=20
> Question: Does this over-usage bandwidth charge a linear cost function
> or is it sub-linear like the committed bandwidth pricing? I mean, will
> it cost me the same $/Mbps as over-usage charges for all 2Gbps, 4Gbps
> and 8Gbps 95th percentile peaks? or is it
>=20
> Over-usage_charges(2Gbps) > Over-usage_charges(4Gbps) >
> Over-usage_charges(8Gbps) ?
This answer is going to suck, but it is the truth. In short, the =
answer, like so many things, is:
IT DEPENDS
When you sign a contract, the overage can be more, same, or less =
depending on what you negotiate. Of course, what you can negotiate =
depends on your leverage. If you you have a lot of traffic, or =
desirable traffic (e.g. inbound traffic), then you can negotiate =
favorable terms. If not, well, not.
Typically, 1 Gbps commit is not enough to garner a favorable rate on the =
overage, so expect to pay at least the same as the commit rate on =
overage.
If you have a lot more, you can negotiate tiers. E.g. The first 10G is =
$X/Mbps, but if you hit 20G, you get charged 20000 * $Y (where Y < X, =
obviously). This can lead to interesting situations where 19 Gbps costs =
more than 20 Gbps. But dems da breaks.
--=20
TTFN,
patrick
