The minimum cost of traffic exchange indicates the lowest possible cost for traffic exchange using peering.
Definition: The Minimum Cost for Traffic Exchange is the lowest unit cost obtainable in a peering infrastructure deployment.
To calculate the lowest cost for traffic exchange, we simply divide the monthly cost of peering by the Effective Peering Bandwidth.
MinimumCostofTrafficExchange=MonthlyCostofPeering/Effective PeeringBW
In the best-case scenario we can use all of the effective peering bandwidth for our peering traffic exchanges with peers. Some would call this "running the peering interconnect hot".
At this maximum utilization point, peering can cost about $1.57/Mbps:
MinimumCostofTrafficExchange=$11,000/7,000Mbp = $1.57/Mbps
This metric helps us identify if peering is even interesting. Will peering save enough money to be worth the effort?
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