Re: Cogent/Level 3 depeering

["Patrick W. Gilmore" <patrick () ianai net>]

On Oct 6, 2005, at 2:47 AM, Richard A Steenbergen wrote:

> Inbound traffic doesn't cost them anything? That old adage only  
> applies to
> end user transit purchasers who have doing extra outbound and thus  
> have
> "free inbound" under the "higher of in or out" billing. For folks
> operating an actual network, the bits use the same resources as  
> traffic in
> the opposite direction, and thus "cost" the same. The only reason  
> Cogent
> gives out free or absurdly underpriced inbound transit is ratios.

You are mistaken.

If I sent 100 Gbps outbound and 20 inbound, I can sell 40-60 Gbps of  
additional inbound for FAR, FAR less than 40-60 Gbps of additional  
outbound.

Zero cost?  Probably not.  Trivial cost?  Possibly, depends on network.


> I know folks who are willing to give away all manner of things,  
> inbound
> and outbound, for free or low cost, because they have "excess  
> capacity"
> that they're already paying for and nothing better to do with it. If
> you're desperate and you're willing to sacrifice long term  
> marketing for
> short term cash it can be a cute technique, but to quote Vijay, "it  
> does
> not scale". Besides, if anyone is depeering Cogent now because of  
> their
> disruptive pricing in the market, they're a couple years late.  
> Speculate
> all you like, but I suspect there is more to it than that.

It doesn't have to scale.

I'm perfectly willing to sell $100K worth of services for $1K worth  
of cost, knowing I cannot sell $101K because "it does not scale".

And anyone who isn't is probably not doing good business.

But I do agree with you on the "couple years late" thing.  Putting  
Cogent out of business will _not_ make prices go up.  (And I'm not  
even sure this will put them out of biz.)  In fact, Cogent is not the  
"lowest cost provider" any more - at least not for bit pushers.

--
TTFN,
patrick