Re: (possible Flame bait) Backbone Building vs Transit purchasing

[Leo Bicknell <bicknell () ufp org>]

In a message written on Fri, Mar 21, 2003 at 04:58:44PM -0500, Deepak Jain wrote:
> *IS* there a common sense number or an equation (better) anyone has worked
> out to figure whether building a backbone (national/international) to
> peering points (i.e. extending an existing, operational service network) to
> improve/add peering vs continuing to buy transit?

This is very much a moving target as various items (circuits, ports,
ip bandwidth) get priced at rates well above over below cost
depending on who has how many of them.  That said, in the long
term, for anyone of size (which I'll define a a few gigs of traffic)
I don't think there is a significant economic difference between
the two options.  This is assuming each option is executed well,
with good planning and financial sense.  One will be cheaper than
the other from time to time, but there will be no clear winner.

This means it comes back to a more basic business decision, do you
want to be an ISP?  Even if the costs are the same for either option
a company may be better off just buying bandwidth because building
a network is not at the core.  On the other side, you might be
trying to sell to people who require you to have a network to be
taken seriously.  At the end of the day my assumption that both
options are executed well is the most often violated, and a prime
cause is that it was not in a companies core interest.

-- 
       Leo Bicknell - bicknell () ufp org - CCIE 3440
        PGP keys at http://www.ufp.org/~bicknell/
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