$2 million pa for a 10GigE port
Excluding bulk discounts, that would be about right. Consider this scenario and it will make a lot of sense:
--In a metropolitan area an ISP may have 1 million customers, they provide each customer with a 20 Mbps link and charge $25/month for that link. This would produce $300 million dollars per year in income for a theoretical 240 Gb/s (valued at $480 Million of bandwidth) meaning a loss of $180m in just transit cost
That is the theoretical, however very, very few people actually use up all the bandwidth they pay for, so:
--Based on the fact that most ISPs have a 500 GB/month data cap, which works out to just under 0.2 Mb/s per connection. So now to feed that much bandwidth to would only take 2.4 Gb/s link for transit, so 2x 10 Gb/s links would be more than sufficient to handle spikes and heavy users. So this theoretical ISP would be receiving $296m in income after transit fees are subtracted.
Now consider that the ISP is also probably doing quite a bit of packet optimization and that a lot of packets don't actually leave their own network given their peering agreements with the big bandwidth consumers, and you see that $2m per year for a 10 Gb/s connection is nothing for them.
Biting the hand that feeds IT
