Actually, (and this is from memory from a couple of years ago), most of the reason for cost of optics on 10G interfaces is simply *physics* (and the technology of component production at the current state-of-the-art level).

(If any of the people questioning the pricing had bothered to look into *cost* (you know, that "input" thing before mark-up), or done any reading (and "light" reading doesn't count ;-)), you'd already know the reasons.)

What it boils down to, is that the way solid-state on-chip lasers are made, for 1.0 GHz (really 933 MHz, IIRC), or even 2.5 GHz, fundamentally doesn't work for 10Ghz. It's because they are *lasers*, where component accuracy is really critical, and at 10Ghz, it crosses a threshold that likely won't be solved until someone clever invents some new way of doing things, or until "nanotech" becomes nanotech (without the quotes).

And the VSR 10G, is really a misnomer. What it is, is 10 x 1.25 GHz "parallel" interface with fibre-optic ribbon cables. The 10 is so they can build in some hardware redundancy in case of failure, and also to improve the yields and infant mortality rates on production of the chips.

Basically, 1.25 GHz (or maybe it's 1.125? It's been too long) are easy to do, with current-generation chip-production technology. 10Ghz optics are old-school lasers, several orders of magnitude larger, much more power-hungry, delicate, and in all likelyhood, hand-crafted with low yields. They really are that expensive. Just check out the price on 10G transponders (eg DWDM equipment) if you don't believe that's the case...

On the other hand, it'd be nice to see a copper 10GBIC, even if its max cable length were a few metres. ;-)

Keep in mind, I'm following standard NANOG methodology and quoting old information without checking my facts against current reality. :-)

Your mileage (or cost) may vary, as they say.
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 Brian Dickson
 Arbinet