North American Network Operators Group
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Re: Cogent/Level 3 depeering

  • From: Patrick W. Gilmore
  • Date: Thu Oct 06 14:00:40 2005 
On Oct 6, 2005, at 2:47 AM, Richard A Steenbergen wrote:
Inbound traffic doesn't cost them anything? That old adage only applies to
end user transit purchasers who have doing extra outbound and thus have
"free inbound" under the "higher of in or out" billing. For folks
operating an actual network, the bits use the same resources as traffic in
the opposite direction, and thus "cost" the same. The only reason Cogent
gives out free or absurdly underpriced inbound transit is ratios.
You are mistaken.

If I sent 100 Gbps outbound and 20 inbound, I can sell 40-60 Gbps of additional inbound for FAR, FAR less than 40-60 Gbps of additional outbound.

Zero cost? Probably not. Trivial cost? Possibly, depends on network.


I know folks who are willing to give away all manner of things, inbound
and outbound, for free or low cost, because they have "excess capacity"
that they're already paying for and nothing better to do with it. If
you're desperate and you're willing to sacrifice long term marketing for
short term cash it can be a cute technique, but to quote Vijay, "it does
not scale". Besides, if anyone is depeering Cogent now because of their
disruptive pricing in the market, they're a couple years late. Speculate
all you like, but I suspect there is more to it than that.
It doesn't have to scale.

I'm perfectly willing to sell $100K worth of services for $1K worth of cost, knowing I cannot sell $101K because "it does not scale".

And anyone who isn't is probably not doing good business.

But I do agree with you on the "couple years late" thing. Putting Cogent out of business will _not_ make prices go up. (And I'm not even sure this will put them out of biz.) In fact, Cogent is not the "lowest cost provider" any more - at least not for bit pushers.

--
TTFN,
patrick