Here’s The Latest North American Transit Pricing, Down 10% Year-Over-Year

At the Content Delivery Summit in NYC, I released the latest North American transit pricing from data I collected directly from customers. This pricing is from major transit providers including AT&T, CenturyLink, Cogent, GTT, Hurricane Electric, Level 3, NTT, Sprint, Verizon and XO. It does not include pricing from Tata, Telefonica, TeliaSonera or providers outside the U.S.

I’ve seen many that don’t follow the infrastructure market use the words transit and peering interchangeably, but they are not the same thing. In its simplest definition, transit is a network that passes traffic between networks in addition to carrying traffic for its own hosts. Transit is where one network agrees to carry traffic that flows between another network and all other networks connected to it. Different from transit is peering, when two or more networks interconnect directly with each other to exchange traffic. Peering is between two networks whereas transit allows you to connect to multiple networks.

Based on the pricing I collected and released in 2015, it looks like North American transit pricing, on average, is down about 10%, year-over-year. Based on all of the pricing I have seen, AT&T is by far the most expensive, with the rest of the providers all typically within 10-15% of one another, in major cities in the U.S.

It’s important to remember that from a business standpoint, there are many backbone and transit providers to choose from in a highly competitive market. Companies can buy full transit, partial transit, select routes, on-net routes, etc. and ISPs will create the service and pricing around the customer request. Customers have options based on price, performance, port speed etc. and I don’t see that changing anytime soon. I’ve also seen some vendors taking a very strong line on IP pricing and have implemented “walk away” pricing above certain levels, selling more into enterprise at higher rates.

A few notes on the numbers. The rates listed below are usage rates and do not include any costs associated with also obtaining an access circuit. Also, these pricing rates usually require multiple points of interconnect, and at least a 12 month term. And since you cannot run a port at a theoretical 100% rate, the numbers below do not factor that in. With transit, many times the final pricing is based on your setup, for instance deciding between a BGP or static routing configuration, whether to run multiple BGP sessions on one port or not, IPv6 native or dual stack, DDOS and other protections, link aggregation etc. so features needed will many times determine the final price you pay.

Current Market Rates For Transit (U.S.)

    • 10Gbps: $0.85 – $1.10 Mbps
    • 20Gbps: $0.75 – $0.95 Mbps
    • 40Gbps: $0.62 – $0.80 Mbps
    • 75Gbps: $0.55 – $0.70 Mbps
    • 100Gbps: $0.45 – $0.60 Mbps

If you are looking for transit pricing at volumes other than what I list, feel free to reach out to me and I’ll see what data I have. And if you are looking for more background on transit, see this link. How Transit Works, What It Costs & Why It’s So Important.

  • Is this rate of decline decelerating from prior years in your estimation?