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They pay for that 40% of traffic that isn't peered, absolutely. Peered traffic isn't free, though, either - the infrastructure build-out and maintenance costs c
by cheald 13y ago
They pay for that 40% of traffic that isn't peered, absolutely. Peered traffic isn't free, though, either - the infrastructure build-out and maintenance costs can be substantial. There are economies of scale at play here, though - once you hit a certain point, it's more cost-effective to build and maintain your own network than to rent someone else's.
If deals like the Netflix/Comcast deal were made illegal, this would only tilt things further in favor of the existing big players, because if you have the kind of scale available that you can build out your own peering networks (like Google), then you can deliver your content for pennies on the dollar as compared to your competition. Transit is expensive. Paid peering allows companies like Netflix - miniscule compared to someone like Google - to achieve effective transit rates that are much closer to what Google can achieve than they could otherwise.
- wmf 13y agoIsn't Netflix the same size as Google or larger? In general, in a world where the only choices are transit or free peering, smaller players could buy CDN services from CDNs that are large enough to qualify for free peering and multiple competing CDNs would drive prices down. It has already been observed that CDN pricing is about the same as transit pricing even though CDNs add value through locality.
- cheald 13y agoIn terms of bandwidth? I actually kind of doubt it. Netflix sees tremendous primetime usage, but Google's bandwidth usage is likely to be substantial throughout the entire day, and it's global, whereas Netflix tends to be much more regional. In terms of financial resources? Not even close. Google utterly dwarfs them in terms of capability to build out and maintain networks. I would love some info on CDN vs transit pricing. In particular, it seems somewhat apples-to-oranges, since CDN pricing is generally per GB delivered, whereas transit pricing is generally per Mbit of capacity. You can approximate a conversion between the two, but you'd have to be careful when comparing them that the comparison is valid.
- toomuchtodo 13y ago> Transit is expensive. I have to disagree here. I'm buying in the tens of Gb/second of transit (1 year terms), and its under $1/Mb. I define that as fairly inexpensive.