CloudFlare bandwidth cost claims overstated, Telstra says

Telstra, Optus transit pricing criticised

Telstra and Optus are two of half a dozen network operators around the world whose pricing is significantly higher than other bandwidth providers, according to CloudFlare

The company, best known for its DDoS protection and CDN services, has published a sequel to its original 2014 analysis of relative bandwidth costs.

The CloudFlare blog entry, which as a benchmark assumes the cost of transit in Europe and North America is 10 units per Mbps, states: “Transit prices in Oceania (Australia and New Zealand) are lower than they used to be, but continue to be extremely high in relative terms, costing 17 times the benchmark from Europe, or 170 units. We peer 50% of our traffic, resulting in an effective cost of 85 units.

“If you exclude Optus and Telstra, then the price falls to 17 units — because we peer with nearly everyone else.”

CloudFlare said there are “six expensive networks” — Telstra, Optus, HiNet, Korea Telecom, Telecom Argentina and Telefonica — “that are more than an order of magnitude more expensive than other bandwidth providers around the globe and refuse to discuss local peering relationships.”

“To give you a sense, these six networks represent less than 6% of the traffic but nearly 50% of our bandwidth costs,” CloudFlare’s Nitin Rao wrote.

“While we’ve tried to engage all these providers to reduce their extremely high costs and ensure that even our Free customers can be served across their networks, we’ve hit an impasse,” Rao wrote.

“To that end, unfortunately, we’ve made the decision that the only thing that will change these providers’ pricing is to make it clear how out of step they are with the rest of the world. To demonstrate this, we’ve moved our Free customers off these six transit providers. Free customers will still be accessible across our network and served from another regional cache with more reasonable bandwidth pricing.”

“CloudFlare’s figures appear to incorrectly overstate Telstra’s actual charges,” a Telstra spokesperson said.

“Previous analysis undertaken by CloudFlare two years ago overstated Telstra’s charges by a factor of ten.

“IP transit prices in Australia reflect the fact we have a relatively small population that is a long distance from the major sources and destinations of data in North America and Europe.”

Optus declined to comment.

CloudFlare responds

“CloudFlare's previous analysis, which used a benchmark price to avoid disclosing actual pricing, shared that Telstra transit costs 20x the cost of European transit,” a statement issued by CloudFlare said. “If CloudFlare did in fact overstate this by 10x, then Telstra's charges would have to be 2x the cost of European transit--which is incorrect.”

“Peering with CloudFlare would actually reduce Telstra's costs,” the statement said. “If we peered with Telstra, CloudFlare would hand off content for more than 4 million websites globally, delivering them locally in each of four major Australian cities: Brisbane, Melbourne, Perth, and Sydney.”

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