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How would I test this? If I just create two (preemptible) n1-standard-1 VMs with the latest debian image and I use "ping" with the internal IP address then I get on average 0.138 ms

I do get impressive bandwidth (1.95 Gbits/sec) using iperf.

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ping is sadly not a great test program. You should do a TCP_RR run with netperf instead. For best results, try one of our newer regions/zones (with newer fabric and NICs) like us-east4-b or europe-west2-c. An n1-std-1 is also a single hyperthread, so you may want a larger instance as well.

Thanks, got 34 µs in europe-west2-c with n1-standard-4 machines (also have about 8 Gbits/sec bandwidth between machines!).

:)

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