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Why Do Internet Service Providers Need to Pay for Local Access?

Internet Pricing

By Cynthia Sandoval-SwegalDec 30, 2019

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Our pricing team fields all kinds of questions from our users about the pricing data you'll find in our databases. We were recently asked why internet service providers need to pay for local access.

Great question.

First, what is local access? Local access is a localized transport service, often referred to as the last-mile, which connects an end-user or customer's physical B-end location to their network provider's core network.

Local access is a localized transport service, often referred to as the last-mile, which connects an end-user or customer's physical B-end location to their network provider's core network.

This A-end network provider edge node is usually referred to their point of presence (PoP), and is found at a local carrier aggregation point, a data center, a colocation site, or some other networking facility.

Local access links may use a variety of underlying transport technologies. 

Carriers will often bundle local access with a core network service (e.g., MPLS VPN) into a complete solution, but it may also be purchased separately from local providers in certain use cases.

As for why internet service providers need to pay for local access, ISP facilities ultimately need to reach their customers, right? This means they either need to build their own last-mile infrastructure or rent/lease said infrastructure from another vendor. (This is what happens at the aforementioned A-end network provider edge node.)

Once that infrastructure is in place, an ISP must then access the internet backbone, which comes at a price.

Backbone access costs vary. Exact pricing depends on things like bandwidth demand and traffic destination. 

 

For more info on all things local access, you can scope out our Local Access Pricing Service.

 

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Cynthia Sandoval-Swegal

Cynthia Sandoval-Swegal

Cynthia Sandoval-Swegal is an analyst at TeleGeography, specializing in market and pricing analysis of wholesale and enterprise network services in Latin America. Her research covers trends in private lines, IP transit, MPLS, Ethernet, DIA, and SD-WAN services. Additionally, she manages TeleGeography ‘s Business Broadband Research Service.

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