North American Network Operators Group

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Re: Current street prices for US Internet Transit

  • From: Patrick W Gilmore
  • Date: Mon Aug 16 14:16:47 2004

On Aug 16, 2004, at 1:16 PM, William B. Norton wrote:

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.
Mind if I ask why you think it is "unhealthy"?

I suppose an argument could be made that this is "below cost", but since you are not a provider and do not sell transit, I would hope the people doing so know their costs and margins better than you do.

Unfortunately, I doubt any transit provider offering these prices will tell us if they are below cost. (Someone care to prove me wrong? :-) But since this is not 1999, I'm guessing at least SOME of them are profitable, and therefore the costs are not necessarily unhealthy. So perhaps you should be more careful of your characterization?



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.)
Having been a "Tier 2" (several, actually :), I can tell you that it is not "simply reselling Tier 1 BW" - which you should know, providing a service to allow Tier 2s to do more than resell transit from a bigger network....


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.
Those are apples & oranges. You cannot compare bandwidth in countries without the same fiber infrastructure as the US ( and with government owned PTTs controlling almost all access to the US market. Not to mention other differences which just don't translate.

I notice that you do not list a single EU country. Prices there are much closer to the US.

Anyway, I suspect "more turbulence in the industry" for the next few millennia, no matter where prices are. :-)

--
TTFN,
patrick