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Today, however, there are six expensive networks (HiNet, Korea Telecom, Optus, Telecom Argentina, Telefonica, Telstra) 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.
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. 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.
Ironically, this actually increases the cost to several of these providers because they now need to backhaul traffic to another CloudFlare data center and pay more in the process. For instance, if Telstra were to peer with CloudFlare then they would only have to move traffic over about 30 meters of fiber optic cable between our adjoining cages in the same data center. Now Telstra will need to backhaul traffic to Free customers to Los Angeles or Singapore over expensive undersea cables. Their behavior is #irrational in any competitive market and so it is not a surprise that each of these providers is a relative #monopolist in their home market.