per month per Mbps to 28 euro cents
So ISPs are going to pay 28 euro cents to route your data to the rest of the world.
They pay BT Wholesale 171 times that (and a bunch of other charges) to route your data to them.
People think Linx are gouging?
The London Internet Exchange (Linx) has announced it will slash prices – just one month after the non-profit was pointedly criticized for charging too much. The internet exchange point is Europe's largest provider of internet interconnect services and announced this week it would cut the cost of its LON2 port fees by 40 per …
"No cables buried in the ground etc."
I assume it covers the cost of routing data to the rest of the world which requires many expensive underground and water cables. About half the cost because someone at the other end pays a similar connection charge.
BT customers already pay line rental for cables buried in the ground. They also pay monthly rental for a service. The back haul, the connection between BT telephone exchanges and the point where data is handed off to the ISP is currently an eye watering £40 per Mb/s per month.
> I assume it covers the cost of routing data to the rest of the world ...
Then you assume wrong.
Think of a room with a big ethernet switch in it. Various ISPs, transit providers, etc get their own connections to that room and plug into the big switch. All these outfits can then make arrangements to "peer" with each other - effectively "I'll take your traffic if you'll take mine" or "I'll pay you to take my traffic across the Atlantic" arrangements.
The advantage over peer-peer connections is the scalability. If you have 3 providers that want to peer, that's three links (A-B, B-C, and A-C), for 4 providers you need 6 links (A-B, A-C, A-D, B-C, B-D, C-D), and when you get to the dozens or hundreds of outfits in the market these days, the number of provider to provider links would be huge - and very expensive.
Alternatively, the ISPs would have to send their traffic "up" to a transit provider who would then route it back "down" to the peer - at a cost.
So they all get one connection to a single exchange - one link for provider A, one link for B, and so on. They can all talk to each other via this "big switch".
As an analogy, suppose you are one of hundreds of companies in big office block. And lets suppose that you do a certain amount of business with other companies - you might be doing IT for them, others are doing HR or secretarial or accounting for you, and so on. You can have someone walk round the building to deliver post to others you deal with (roughly analogous to peer to peer connections), or you can stick stamps on the envelopes and get BT to route them via the nearest sorting office (roughly analogous to sending the traffic up to transit networks), or you can all send someone down to the post room and drop the letters in the post boxes for the other companies - this is roughly equivalent to an IXP, a "Post room for the internet".
People think that the public IXPs are important but the majority of most large ISP's traffic doesn't pass through IXPs. Most traffic is routed through private peering to people like Google, YouTube, Netflix and the CDN providers. Sure BT has 350GB of LINX peering, but I can bet that their total traffic volume is much higher than that.
This is also why I find the Netflix rant strange, they only have 80GB of LINX peering because most of their connectivity is private peering and the rest of Netflix content is delivered by on-net appliances within the ISPs themselves (providing 100's of GB of capacity).
do some reading about transit versus peering and how isp's of different sizes interconnect with each other before you comment...
LINX is an IXP - by definition, members are peering with each other. Linx provides a switched fabric that allows the members to send data to each other over - linx itself (or any other IXP) doesn't deliver your data anywhere.
thats the reason the prices are different. not saying that Bt's price is fair, but the service is fundamentally different.
It's not so much that the LINX is ripping off the community. It's more like NetFlix is ripping off the LINX. Which in itself is a form of ripping off the community. The vast majority of gentle readers thought the referenced presentation was a pile of corn (e.g. a math class would have been productive). Reducing cost is goooood. Some class while doing it would be better. You go girl!
Of course the real reason LINX slashed their prices is due to price pressure from LONAP, a competitor IXP in London. LONAP launched 100gigabit ports for 2700gbp/month - faced with high profile defections from their services, LINX has to cut the price of their extreme lan ports to try and retain market share. Go figure!
So what you're saying is...
Instead of passing savings on to their members as a benefit, they waited until they had no other choice.
LINX cut prices due to being forced by their competition, which they could afford to do. They didn't do this because their members were getting screwed, they did it because they looked bad against LONAP.
Sounds like we agree on the 'real reason'