Re: Peering and Network Cost

[Max Tulyev <maxtul () netassist ua>]

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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