Internet exchange Linx cuts peering prices by 40% after rip-off claims

Did Netflix's accusations force company's hand?

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 cent and its LON1 network by 10 per cent, effective August 1. It will also reduce the price of its regional exchange in Manchester to match the new cost of LON2.

It is the second time in seven months that the company has reduced its fees – something that hasn't happened since 2009 – leading many to believe the cut is in response to fierce criticism directed at the company last month by Netflix' vice president of global networks, David Temkin.

Temkin singled out Linx during a presentation of network operators in Chicago in June titled "The real cost of Public IXPs" and noted that it makes millions in profit and refuses to provide a breakdown of its financials.

He also noted that Linx and other peering companies spend large amounts of money on non-technical activities such as marketing, public policy and social events, and hold themselves out as "member organizations" – but give members no say in decisions. "They can choose to adjust pricing whether or not their members give them permission to do so," he said.

He also made pointed mention of the fact that Linx's board members are paid $22,000 a year – a "pretty good hourly rate."

Lower average

The reductions will see the price of Linx's main LON1 network drop from 30.8 euro cents per month per Mbps to 28 euro cents – which is still significantly above the average global peering price of 23.3 euro cents. LON2 prices will drop from 22 to 15.7 euro cents, putting it among the least expensive networks, according to a online spreadsheet of peering prices.

Linx put out a video to accompany a press release announcing the prices, featuring its CEO John Souter and board member Mike Blanche. Neither made mention of the Netflix presentation and instead painted the price reductions as the result of technical reviews started last year.

"The reduction in pricing follows an extensive review of our LON2 infrastructure which began in November last year," said Souter. "This was in preparation of a major network upgrade and we are now far enough into that process to be sure we have a path to a future technical solution at a significantly lower cost."

Meanwhile, the man that gave the presentation that put a spotlight on peering price, David Temkin, welcomed the news, tweeting: "Cheers to Linx for their 10 per cent price reduction on LON1 and 40 per cent (!) on LON2. Great work!"

Asked if he thought it was his presentation that had caused the unexpected price reduction, he was a little more circumspect: "Infer what you'd like, I don't think it's worth debating. I'm just glad they did it." ®




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