RE: Leaving public peering?

From: Shon Elliott (no email)
Date: Wed Dec 02 2009 - 17:40:30 EST

  • Next message: Wade Peacock: "Consumer Grade - IPV6 Enabled Router Firewalls."

    Just to chime in on this subject. We're at Equinix in San Jose. For
    access to the peering at their facility, they charge a $1000 MRC Fee,
    plus another $250 MRC for a cross-connect for GE port. I believe they
    also charge a $1000 NRC fee as well. Private peering would be an option
    if they didn't charge for every cross-connect a monthly fee. That fee is
    pretty high to small people like us, which really prevents us from
    entering the peering stages we'd love to have at this point. If we had
    private peering, we'd have to pay the fee regardless. $250/mo is quite a
    lot. Especially if you're talking at dollars per meg.

    It doesn't make sense.


    -----Original Message-----
    From: Leo Bicknell [mailto:]
    Sent: Wednesday, December 02, 2009 1:20 PM
    Subject: Re: Leaving public peering?

    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.

    "Home of the $4 Megabit!" So we have transit prices at $4 per megabit.

    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 it....well, 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.

           Leo Bicknell -  - CCIE 3440
            PGP keys at

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