I'm also curious about the value of co-location. Using a fast packet service (Frame Relay, SMDS, or ATM) allows your on-site router to communicate directly with a router of another ISP. There's no need to purchase another router to place at the co-location site. Why incur the additional cost?
To avoid having to use any of the fast packet services you mentioned? Or to allow you to use routers, which you know about, instead of being dependent on the random characteristics of switches the telephone company bought?
Not using either of the last two fast packet services, in particular, will also yield 30% more useful bandwidth from a T3 circuit. This all by itself may make up for the co-location costs and the cost of a router.
Actually, the overhead for IP over SMDS is more like 40%, if I remember correctly, because of all the headers (8 byte SNAP, 32 byte SMDS) on top of the ATM cell tax (5 out of 53 on cell headers, average 1/2 a cell wasted at the end of the packet which occurs about ever 5 or 6 cells), figured on the observed Internet average packet size of ~220 bytes a couple years ago. What's the average packet size now? I think the overhead on DS-3 ATM/SMDS is worse than on OC-3, if I recall correctly, because the DS-3 PLCP is so wasteful as well. Someone should redo these calculations more accurately. So, if the fast packet based access to NAPs is priced at ~40% less, *and* the ATM switches perform as well as the FDDI switches, then it is a don't care. -- Jim