Getting networks to connect to an ix is Uber expensive in relation to the overall costs. Specifically before critical mass is reached. Getting the first X gig of traffic is a hard problem that takes money to fix. On Apr 19, 2015 7:51 AM, "Mike Hammett" <nanog@ics-il.net> wrote:
There is a revenue floor where it doesn't matter how much or how little service is provided, simply having a customer period requires a certain amount of revenue.
Route servers, IXP Manager, AS112, route collectors, DNS, etc. all cost money.
Maintenance costs money. The organization itself costs money. Upgrades cost money. Racks cost money. Power costs money.
I'm sure I've left some things out.
----- Mike Hammett Intelligent Computing Solutions http://www.ics-il.com
----- Original Message -----
From: "Baldur Norddahl" <baldur.norddahl@gmail.com> To: nanog@nanog.org Sent: Sunday, April 19, 2015 4:23:53 AM Subject: Re: Peering and Network Cost
So why is IX peering so expensive?
Again if I look at my local IX (dix.dk) they have about 40 networks connected. Each network pays minimum 5800 USD a year. That gives them a budget of 240000+ USD a year.
But the only service is running an old layer 2 switch.
Why do these guys deserve to be paid that much for so little?
Recently we had a competitor show up in the form of Netnod. However the pricing is almost exactly the same, although Netnod tries to deliver slightly more service.
Seems to me that this an unsound market. The 40 dix particants should donate 1000 USD once and get a new layer 2 switch. Why does that not happen?
Does not look like it is a local phenomenon either. IX'es all over are way more expensive than they should be.
Regards
Baldur