Re: Peering and Network Cost

[Edward Dore <edward.dore () freethought-internet co uk>]

On 16 Apr 2015, at 08:00, Tore Anderson <tore () fud no> wrote:

> * Mark Tinka <mark.tinka () seacom mu>
>
> > On 16/Apr/15 07:25, Tore Anderson wrote:
> > > We're in a similar situation here; transit prices has come down so
> > > much in recent years (while IX fees are indeed stagnant) that I am
> > > certain that if I were to cut all peering and buy everything from a
> > > regional tier-2 instead, I'd be lowering my total MRC somewhat,
> > > without really reducing connectivity quality to my (former) peers.
> >
> > I wouldn't say exchange point prices are stagnant, per se. They may
> > remain the same, but what goes up is the port bandwidth. It's not
> > directly linear, but you get my point.
> >
> > Again, the burden is on the peering members to extract the most out of
> > their peering links by having as much peering as possible.
>
> You appear to be assuming that an IP transit port is more expensive
> then an IXP port with the same speed. That doesn't seem to always be
> the case anymore, at least not in all parts of the world, and I expect
> this trend to continue - transit prices seems to go down almost on a
> monthly basis, while the price lists of the two closest IXPs to where
> I'm sitting are dated 2011 and 2013, respectively.
>
> Even if the transit port itself remains slightly more expensive than
> the IXP port like in the example Baldur showed, the no-peering
> alternative might still be cheaper overall because even if you're
> peering most of your traffic you'll still need to pay a nonzero amount
> for a (smaller or less utilised) transit port anyway.
>
> Tore

Pricing at LINX here in the UK has definitely dropped over the past few years.

Back in 2011, the membership fee was £1500/year and it's now £1200/year.

1G ports were £391/month on the first London LAN and £335/month on the second London LAN. They're now free on both LANs 
for the first port and then £270/month and £180/month respectively for additional ports.
You can also get a free 1G port on each of the Manchester UK, Cardiff UK, Edinburgh UK and North Virginia/Washington DC 
USA LANs as part of the same membership fee (none of these additional LANs existed in 2011).

10G ports were £1463/month on the first London LAN and £1250/month on the second London LAN. They're now £1030/month 
and £785/month respectively.

So that's what, a 20% reduction in membership fees and a 30% or higher (depending on the service) reduction in port 
fees in 4 years?

I don't have any quantifiable data on what has happened to IP transit costs over the same period, but for a point 
comparison I'd say that off the top of my head you can get a 1G CDR on a 10G port from a tier-1 provider in London for 
approximately the same cost as a 10G port at LINX these days, maybe slightly cheaper.

Edward Dore 
Freethought Internet