Re: transit and peering costs projections

[Tom Beecher <beecher () beecher cc>]

> So for now, we'll keep paying for transit to get to the others (since it’s
> about as much as transporting IXP from Dallas), and hoping someone at
> Google finally sees Houston as more than a third rate city hanging off of
> Dallas. Or… someone finally brings a worthwhile IX to Houston that gets us
> more than peering to Kansas City. Yeah, I think the former is more
> likely. 😊

There is often a chicken/egg scenario here with the economics. As an
eyeball network, your costs to build out and connect to Dallas are greater
than your transit cost, so you do that. Totally fair.

However think about it from the content side. Say I want to build into to
Houston. I have to put routers in, and a bunch of cache servers, so I have
capital outlay , plus opex for space, power, IX/backhaul/transit costs.
That's not cheap, so there's a lot of calculations that go into it. Is
there enough total eyeball traffic there to make it worth it? Is saving
8-10ms enough of a performance boost to justify the spend? What are the
long term trends in that market? These answers are of course different for
a company running their own CDN vs the commercial CDNs.

I don't work for Google and obviously don't speak for them, but I would
suspect that they're happy to eat a 8-10ms performance hit to serve from
Dallas , versus the amount of capital outlay to build out there right now.

On Sat, Oct 14, 2023 at 11:47 PM Tim Burke <tim () mid net> wrote:

> I would say that a 1Gbit IP transit in a carrier neutral DC can be had for
> a good bit less than $900 on the wholesale market.
>
> Sadly, IXP’s are seemingly turning into a pay to play game, with rates
> almost costing as much as transit in many cases after you factor in loop
> costs.
>
> For example, in the Houston market (one of the largest and fastest growing
> regions in the US!), we do not have a major IX, so to get up to Dallas it’s
> several thousand for a 100g wave, plus several thousand for a 100g port on
> one of those major IXes. Or, a better option, we can get a 100g flat
> internet transit for just a little bit more.
>
> Fortunately, for us as an eyeball network, there are a good number of
> major content networks that are allowing for private peering in markets
> like Houston for just the cost of a cross connect and a QSFP if you’re in
> the right DC, with Google and some others being the outliers.
>
> So for now, we'll keep paying for transit to get to the others (since it’s
> about as much as transporting IXP from Dallas), and hoping someone at
> Google finally sees Houston as more than a third rate city hanging off of
> Dallas. Or… someone finally brings a worthwhile IX to Houston that gets us
> more than peering to Kansas City. Yeah, I think the former is more likely.
> 😊
>
> See y’all in San Diego this week,
> Tim
>
> On Oct 14, 2023, at 18:04, Dave Taht <dave.taht () gmail com> wrote:
> > This set of trendlines was very interesting. Unfortunately the data
> > stops in 2015. Does anyone have more recent data?
> https://drpeering.net/white-papers/Internet-Transit-Pricing-Historical-And-Projected.php
> > I believe a gbit circuit that an ISP can resell still runs at about
> > $900 - $1.4k (?) in the usa? How about elsewhere?
> >
> > ...
> >
> > I am under the impression that many IXPs remain very successful,
> > states without them suffer, and I also find the concept of doing micro
> > IXPs at the city level, appealing, and now achievable with cheap gear.
> > Finer grained cross connects between telco and ISP and IXP would lower
> > latencies across town quite hugely...
> >
> > PS I hear ARIN is planning on dropping the price for, and bundling 3
> > BGP AS numbers at a time, as of the end of this year, also.
> >
> >
> >
> > --
> > Oct 30:
> https://netdevconf.info/0x17/news/the-maestro-and-the-music-bof.html
> > Dave Täht CSO, LibreQos