[NNagain] transit and peering costs projections

[Dave Cohen]

I’m a couple years removed from dealing with this on the provider side but the focus has shifted rapidly to adding core capacity and large capacity ports to the extent that smaller capacity ports like 1 Gbps aren’t going to see much more price compression. Cost per bit will come down at higher tiers but there simply isn’t enough focus at lower levels at the hardware providers to afford carriers more price compression at 1 Gbps, even 10 Gbps. I would expect further price compression in access costs but not really in transit costs below 10 Gbps. 

In general I agree that IXs continue to proliferate relative to quantity, throughput and geographic reach, almost to the degree that mainland Europe has been covered for years. In my home market of Atlanta, I’m aware of at least four IXs that have been established here or entered the market in the last three years - there were only two major ones prior to that. This is a net positive for a wide variety of reasons but I don’t think it’s created much of an impact in terms of pulling down transit prices. There are a few reasons for this, but primarily because that growth hasn’t really displaced transit demand (at least in my view) and has really been more about a relatively stable set of IX participants creating more resiliency and driving other performance improvements in that leg of the peering ecosystem. 

Dave Cohen
craetdave at gmail.com

> On Oct 14, 2023, at 7:02 PM, Dave Taht via Nnagain <nnagain at lists.bufferbloat.net> 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
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