On Dec 3, 2009, at 1:00 AM, Patrick W. Gilmore wrote:
> On Dec 2, 2009, at 4:48 PM, Jonas Frey wrote:
>
>> the DE-CIX pricing is now 500 Euro/month...since 1st october...see end
>> of that page.
>> Both DE-CIX and AMS-IX have decreased their pricing this year..almost at
>> the same time. I guess this is a move to stop company leaving public
>> exchanges...i have seen this trend, too.
>
> That is not why LINX lowers its prices. (I cannot say why AMS-IX lowers its
> prices.)
>
> LINX is a member-based organization. The member _own_ the exchange. They
> are paying themselves, and they only pay themselves as much as it costs to
> run the exchange. With more members, more scale, and advances in equipment,
> unit (i.e. port) costs go down.
>
> In a cost-recovery model, that means prices drop.
For exactly the same reason AMS-IX lowered its prices.
- Henk
>
> LINX dropped prices mid-year 2009, and are dropping prices again in January
> 2009. AMS-IX dropped prices once in that time. DE-CIX actually raised its
> prices for many members, so they could lower their prices for others.
> Interesting strategy
>
> --
> TTFN,
> patrick
>
>
>> On Wed, 2009-12-02 at 22:20, Leo Bicknell wrote:
>>> In a message written on Wed, Dec 02, 2009 at 12:46:46PM -0800, Lasher, Donn
>>> wrote:
I realized that paid transit is down at almost obscene levels, but is
that enough of a reason to increase hop-count, latencies, etc?
Why disconnect from public mostly-free peering?
>>>
>>> Let's look at some economics. I'm going to pick on some folks here,
>>> solely because they have prices online and because they are, I feel,
>>> representative prices.
>>>
>>> http://www.cogentco.com/us/
>>>
>>> "Home of the $4 Megabit!" So we have transit prices at $4 per megabit.
>>>
>>> http://www.de-cix.net/content/services/public-peering.html
>>>
>>> A 1GE link to the exchange is 1000 euro per month, which is $1505 USD at
>>> the moment, let's call it $1500 for round numbers.
>>>
>>> Now, your 1GE exchange port really shouldn't be run past 60% or so, if
>>> you want to provide good service. So it's really $1500 for 600Mbits,
>>> or $2.50 per Megabit.
>>>
>>> If you're an ISP you look at this and go, humm, I take in $4 from my
>>> customer, and hand $2.50 of it right back out to an exchange operator
>>> if I use public peering, making the exchange 62% of my costs right up
>>> front. On the other hand, if I choose wisely where I private peer I
>>> can do it at places with a one-time fee for the cable, so there is
>>> $0 in MRC. I have to buy a router port, sure, but it's also $0 MRC,
>>> just a capital asset that can get written off over many years.
>>>
>>> This is the math with the $4 megabit advertised price. The halls at
>>> Nanog are awash in $2 a megabit rumors if you have large enough commits
>>> (say, a few 10GE's). Taking in $2 and paying the exchange operator
>>> $2.50 of itwell, that's not so good. :)
>>>
>>> Transit prices have fallen enough that MRC's for switch ports, and
>>> even MRC's for fiber runs (are any of you still in a colo that wants
>>> $500 a month for a fiber run, I didn't think so) are eating up huge
>>> chunks of the inbound revenue, and thus just don't make sense.
>>>
>>> Now, before someone points it out, yes, DECIX's rate per megabit is
>>> lower on a 10GE and a second port, so if you can move 2 ports of 10GE of
>>> traffic you can make it a lot cheaper. Also, Cogents $4 a megabit is
>>> probably predicated on you being in the right location and having the
>>> right commit, if you need a DS-3 in West Nowhere you'll pay a higher
>>> rate, and that helps offset some of the costs. I've oversimplified, and
>>> it's a very complex problem for most providers; however I know many are
>>> looking at the fees for peering ports go from being in the noise to a
>>> huge part of their cost structure and that doesn't work.
>>
>>
>>
>
>
