In the long run, why are we assuming there will be locality of traffic?
I think the right question is: How much local traffic will there be and is that enough to make local shortcuts cost effective? Part of that discussion may involve what "local" means. Things get complicated because current practice is not to charge by the packet-mile but rather by the size of the access pipe. A local shortcut might avoid the need for a larger access pipe or give better response over an existing pipe. So we are still talking real money, it's just that we are looking through a foggy window. ----- Does anybody have back-of-envelope type numbers for per-mile link costs? What does it cost when I fetch a file or web page from the wrong side of the country or ocean? I know the cost won't show up on my bill. I'm looking for some handwaving estimate of the incremental cost to the whole system.