The other interesting thing is not all bandwidth is created equal. We provide services like 1.1.1.1 and infrastructure to root server operators in order to have a “currency” that’s helpful to ISPs who invite us into their networks. The number of times we’ve gotten invited into some telecom’s network because the network admin’s favorite sports team (or whatever) uses the free version of our service is… fascinating. And since every server in our network runs every service, once we’re in for one thing means everything we do in the region gets better and less expensive to operate.
This means, counter intuitively, as we add more locations to our network our costs generally go down, not up.
It always baffled me that regional ISPs weren't selling that last mile bandwidth to customers for real dollars. Even over DSL lines in the late 90s one could have run an amazing VoD service.
https://www.cloudflare.com/network/
But we deploy enough equipment to meet local demand (so will roughly correlate to population served). And that makes sense for ISPs to support because the alternative is them paying for back haul bandwidth themselves.
Given the rather large margins of home ISPs, it seems like they have you over a barrel if they set the price point sufficiently below the cost of transit without peering...