Answers and Supplemental Material for Chapter 1 - Internet Transit

This page contains the answers to the exercises and some supplemental material from The Internet Peering Playbook available in June.


  1. What is the monthly bill if you buy 1.5Gbps of transit at $2/Mbps and peer 1Gbps at an IX with a monthly peering cost of $5000/month?

    With 1500Mbps * $2/Mbps=$3000/month + $5000/month = $8000/month. The peered traffic is free.

  2. You have 5 Gbps of video traffic to push and your price of transit is $2 per Mbps with a 2G commit. Does it make sense to build into Sandeep's Internet Exchange if the circuit in costs $3000/mo, colo costs $1000/mo, the 10Gbps peering port costs $3000/mo and you think you can peer away 2Gbps for free at the IX?

    In the first case we will pay 5000Mbps * $2/Mbps = $10,000 per month without the commit. If we peer away 2000Mbps, we pay 3000Mbps * $2/Mbps=$6000/month plus the cost of peering of $7000 per month=$13,000 per month. Peering does not make financial sense here.

  3. You have 6 Gbps of video traffic to push and the price of transit is $2 per Mbps with a 2G commit. Does it make sense to build into Manning's Internet Exchange if you can peer 2Gbps with the only cost being port costs $2000/mo for a 10 gig port.

    In the first case, 6000Mbps * $2/Mbps = $12,000 per month. In the second case we pay 4000Mbps * $2/Mbps=$8000 per month plus $2000 per month for peering = $10,000 per month. Peering makes financial sense given the assumptions above.

  4. What is the effective peering range for question 1 if the peering infrastructure is a 10G ethernet?

    The Effective Peering Range is the range where peering makes sense financially, from the peeringbreak even point to the effective peering bandwidth. The Peering Break Even Point = Monthly Cost of Peering / Unit Price of Transit = $5000 / $2/Mbps=2500Mbps=2.5Gbps. Since we know that the effective peeringrange is 70% of the capacity of the pipe, the Effective Peering Range is 2.5Gbps to 7Gbps. If you can peer between 2.5Gbps and 7Gbps over this infrastructure, peering provably makes financial sense.

Supplemental Material

Supplemental Material


Reference Llinks




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The 2014 Internet Peering Playbook is now available on the iPad at the Apple Store and for the Amazon Kindle. The Kindle, ePub and PDF form are also perpetually updated on the DrPeering DropBox share.