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RE: Current street prices for US Internet Transit

  • From: William B. Norton
  • Date: Mon Aug 16 13:19:58 2004


Thanks to all who replied with data, and yes, the pricing was all 95th percentile.

Wow - the U.S. has an amazingly unhealthy and cut throat transit market in 2004.

About 20 folks responded, most saying the Peering Coordinator quotes (below) sounded about right.

> ISP Transit Commits and Prices

---------------------------------------------------------------------------------------------------------------------
> if you commit to    1M per month you will pay about $125/Mbps
> if you commit to   10M per month you will pay about $ 60/Mbps
> if you commit to  100M per month you will pay about $45/Mbps
> if you commit to 1000M per month you will pay about $30/Mbps
A couple people said these prices were TOO HIGH, particularly for the gig commit, although several multi-gig commits came in tiered; for example, $45/Mbps for 1G commit, $35 for 2G, etc. on down to $21 for 8G commit. (One Tier 2 ISP said that they sold 1G commit as low as $18/Mbps, presumably simply reselling Tier 1 BW so the difference may be negligible.)

Three said that these transit prices were TOO LOW, in one case they paid about double these numbers. It was interesting that these three were a content company, a cable company and a DSL company, folks who traditionally don't sell transit. Maybe they are in a retail market for transit, while everyone else buys in the wholesale market.

Since so many said these prices are about right, I'll use them for the Peering versus Transit analysis. A couple people pointed to the 10M commit being closer to $80/Mbps, so that may be an adjustment.

Given the adjustment, I thought you might be interested in how the U.S. transit prices compare against a handful of other Peering Ecosystems:

The Cost of Internet Transit in�
Commit AU SG JP HK USA
1 Mbps $720 $625 $490 $185 $125
10 Mbps $410 $350 $150 $100 $80
100 Mbps $325 $210 $110 $80 $45
1000 Mbps $305 $115 $50 $50 $30

Round numbers anyway FWIW. Hope this helps. I feel bad for those selling transit these days - at these prices, margins must be mighty thin, and I suspect we will see some more turbulence in the industry.

Bill