OSPF Cost = Reference Bandwidth / Interface Bandwidth
The default reference bandwidth is 100Mbps, so for instance the OSPF cost for a T1 serial line is:
OSPF Cost
= 100,000,000 / 1,544,000
= 64.7 (remove decimal)
~ 64
For loopback address, the cost is 1 because:
OSPF Cost
= 100,000,000 / 8,000,000,000
= 0.125
~ round off to 1
If you want to override the formulated cost, you can use the interface command:
ip ospf cost <cost>
Let's see this example:
R1 is directed connected to R2 with a T1 serial link. R1 has its network 1.0.0.0/8 advertised to R2 and from R2 we can see that the metric (cost) is 65. 1.0.0.0/8 is on R1 loopback interface.
So loopback0 metric (1) + serial1/0 metric (64) = 65 on R2
Let's change R1 loopback0 cost so the configured value will override the formulated value:
Go back to R2 and see the output of show ip route:
The metric becomes 84 because:
loopback0 metric (20) + serial1/0 metric (64) = 84
Another way to influence the cost is changing the reference-bandwidth from default 100Mbps to some other numbers.
auto-cost reference-bandwidth <bandwidth in Mbps>
Let's change the reference bandwidth to 1000Mbps. Make sure you do it across all network.
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