Q: DrPeering -

What is the price of transit out there now?

Nigel Holland

U.S. RightOn

A: 

DrPeering has been tracking the market price for Internet Transit since 1998. Some recent discussions with peering coordinators highlight some resistance crossing the $1/Mbps price point.

A Price Floor at $1/Mbps

The majority of the Tier 1 ISPs in the U.S. are maintaining the transit price floor to $1/Mbps with at least a 10Gbps commit. There are some reported outliers in the $0.25-0.65 price points but unless your name is Google and/or you exchange enormous volumes of traffic, you probably won’t get these prices. Even some the larger content players are paying $1.25- $1.75/Mbps.

For zero commit the U.S. market seems to be still hovering closer to $3-$4/Mbps, but....

Zero commit may not exist anymore.

Some folks have been complaining about salespeople not willing to take phone calls for deals with revenue less than $2000/month. In effect, they say that there is a 500Mbps minimum at a price of $4/Mbps.

What an industry. When do we start pricing in Gbps? Let’s try that pricing model on for size:

Salesguy: “Yes, we sell access to the Internet. Best price in town: $2000/Gbps.”

Customer: (to self) ...shift the comma over one, two, three. $2/Mbps seems high.

Maybe we should instead adopt pricing in cents. 

Customer: How much for a transit?

Salesguy: 70. . . . . . 70 cents per meg.

Customer: but ISP A sells it for 47

Salesguy: Buy from ISP A then and come back to me when you have 5000

Customer: Megs?

Salesguy: No, Gigs! The deal has to be worth more than the price of my suit.

So far I haven’t heard anyone anything but $ / Mbps quoted, but we will see.

Level 3 & GLBX

Several people have expressed concerned about the Level 3 acquisition of Global Crossing. Apparently these two players were often played off one another to get better pricing.

As the field of scaled providers narrows, it may be more difficult to get market prices sub-$1000 per Gbps.

DrPeering@DrPeering.net