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Wholesale Bandwidth Prices Still Dropping
GigE port prices in major U.S. cities drop 30-40%
According to new data from research firm Telegeography, the global cost of wholesale bandwidth continues to drop. Among other findings, the report indicates that GigE port prices in major U.S. cities fell 30-40 percent between Q2 2007 and Q2 2008; Median monthly IP transit prices for 1,000 Mbps Gigabit Ethernet (GigE) ports in major U.S. and European cities ranged from $10-$14 per Mbps in Q2 2008. GigE port prices in Latin American cities declined a more modest 15-20 percent for the same period, while GigE port prices in major Asian cities dropped about 30%.

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SpaethCo
Digital Plumber
MVM
join:2001-04-21
Minneapolis, MN

2 recommendations

SpaethCo

MVM

Major cities is the key...

Head over to ISP-Plant and click through the links of backbone providers and you'll see a trend emerge -- they all peer and build capacity in a handful of cities around the world.

In the US the capacity is cheap between these locations for one reason: the railroads. Since the railroads own all of the land immediately adjacent to the tracks that cross the continent, the major telcos / fiber providers were able to negotiate laying fiber with just a handful of major railroad companies to get contiguous right-of-way for large distances. Go out to any major railway and you'll see the distinctive orange fiber markers along the route. See: »ops.fhwa.dot.gov/freight ··· ange.htm for railway maps.

When they have to trunk capacity out beyond those locations, they have to work to get rights from all the land owners in path and every municipality wants their cut. The administrative overhead to work out contracts with all the entities to run fiber within a metro area is huge.