RE: Peering and Network Cost

["Siegel, David" <David.Siegel () Level3 com>]

Most cost models select a capacity figure that represents typical high-watermark utilization before the next cash 
outlay is triggered.  By using your actual utilization, you might be penalizing your cost if you have low utilization 
and that low utilization is expected to be a temporary situation given the state of your business.   That way your cost 
doesn't increase (for example) as a function of losing a large customer or other traffic shifting event.  The only 
reason I would see some intentionally pick a lower figure is if the dynamic of their specific business suggests that 
low-utilization interconnect ports are typical for them.


-----Original Message-----
From: NANOG [mailto:nanog-bounces () nanog org] On Behalf Of Mike Hammett
Sent: Wednesday, April 15, 2015 12:45 PM
To: nanog () nanog org
Subject: Re: Peering and Network Cost

(Reply to thread, not necessarily myself.) 

If you can pull a third of your traffic off at the cost of a cross connect and another third at the cost of an IX port, 
now you can spend a buck or two a meg on what's left. Yes, I understand the cost of a cross connect or IX port is the 
$/megabit you're actually using and not $/megabit of capacity. 




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



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

From: "Mike Hammett" <nanog () ics-il net>
To: "Max Tulyev" <maxtul () netassist ua>
Cc: nanog () nanog org
Sent: Wednesday, April 15, 2015 1:33:35 PM
Subject: Re: Peering and Network Cost 

Very true. I left it as I did given that I expect a similar profile from others in North America... on NANOG. 

Basically, wherever your region's streaming video or application updates come from. ;-) 




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



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

From: "Max Tulyev" <maxtul () netassist ua>
To: nanog () nanog org
Sent: Wednesday, April 15, 2015 1:27:45 PM
Subject: Re: Peering and Network Cost 

Not actually Facebook net, but Akamai CDN. Not a Google (peer), but GCC node ;) 

It is varying from location to location. For example here in Ukraine we
(still) have 1st place for traffic amount from Vkontakte (mostly music streams), second from EX.ua (movie store), but 
almost none NetFlix, Hulu or Amazon. And you can't get both of them in a good quality neither at IXes, nor at Tier1. 

I think in another locations, for example in India, traffic profile will be different from both of us, and have some 
local specific as well. 

On 04/15/15 20:58, Mike Hammett wrote: 
> It also depends on traffic makeup. Huge amounts of eyeball traffic go to (well, come from) NetFlix (a third) and 
> Google, FaceBook, Hulu, Amazon, etc. (another third). It's comparable price to peer off those few huge sources of 
> traffic and buy better transit than you would have than to just buy cheap transit. 
>
> A lot of people tend to forget there are thousands of independent ISPs out there, usually in areas where there aren't 
> a breadth of providers in the first place. Most could get buy with a single GigE (or even less). 
>
>
>
>
> -----
> Mike Hammett
> Intelligent Computing Solutions
> http://www.ics-il.com
>
>
>
> ----- Original Message -----
>
> From: "Max Tulyev" <maxtul () netassist ua>
> To: nanog () nanog org
> Sent: Wednesday, April 15, 2015 12:50:41 PM
> Subject: Re: Peering and Network Cost
>
> Hi Roderick,
>
> transit cost is lowering close to peering cost, so it is doubghtful 
> economy on small channels. If you don't live in 
> Amsterdam/Frankfurt/London - add the DWDM cost from you to one of 
> major IX. That's the magic.
>
> In large scale peering is still efficient. It is efficient on local 
> traffic which is often huge.
>
> On 04/15/15 17:28, Rod Beck wrote: 
> > Hi,
> >
> >
> > As you all know, transit costs in the wholesale market today a few percent of what it did in 2000. I assume that 
> > most of that decline is due to a modified version of Moore's Law (I don't believe optics costs decline 50% every 18 
> > months) and the advent of maverick players like Cogent that broker cozy oligopoly pricing. 
> >
> >
> > But I also wondering whether the advent of widespread peering (promiscuous?) among the Tier 2 players (buy transit 
> > and peer) has played a role. In 2000 peering was still an exclusive club and in contrast today Tier 2 players often 
> > have hundreds of peers. Peering should reduce costs and also demand in the wholesale IP market. Supply increases and 
> > demand falls. 
> >
> >
> > I thank you in advance for any insights. 
> >
> >
> > Regards,
> >
> >
> > - R. 
> >
> >
> > Roderick Beck
> > Sales Director/Europe and the Americas Hibernia Networks
> >
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