links on the blink (fwd)

Sat Nov 4 17:05:22 UTC 1995

Hans Werner - presumably frustrated about the quality of his internet 
service writes:

	Are you guys up to it, or would you need regulation do it for 	
	you? Y'know, life can be easier if your parents tell you what 	
	to do, if you cannot get your act together yourself. Less stress, too. 
	Less flexibility as well, perhaps, but methinks we have to choose some 
	optimization function here, and buy off on the cost.

	In the end, this is not a sandbox for having a good time. 	
	People today *depend* on their network connection, and that it works 
	is important to them. You *have* to go beyond just thinking locally.

Very relevant questions.  Let me try to nudge the discussion into a 
slightly different direction.  When people started talking to me earlier 
in the summer about internet business models, these issues were the 
number one argument.

The chain of reasoning went something like:  you can't have a mature 
internet business until you have guaranteed quality of service metrics.  
You can't have guaranteed quality of service metrics until you have 
settlements.  It seems to me that Hans Werner's complaint above fits 
squarely into this mold of thought.  If I am wrong I am sure he'll tell me.

Could we talk a bit about where these conclusions may lead us?

Settlements, as I understand them, might be traffic based or route 
based.  If I use more of someone else's resources than he uses of mine, I 
owe him a payment.  Perhaps the payment might be for gigabytes delivered 
or routes advertised.  The payment process then would cascade from the 
largest down to the smallest providers as those lower in the food chain 
extracted money from those beneath them to pay the demands of those above 
them.

The outcome of such a process would be significant.  Traffic based 
settlemnts would add substantial accounting costs to doing business.  
Route charging I'd guess would add less.  Again however would not the 
billing components of this play into the hands of the RBOCS and five 
largest IXCs who have the mainframes and software systems to handle it 
most easily?

But if the big boys started it, how far would it or could it go before 
shattering the internet?  I predict on the basis of what regional ISPs 
who have more dial up than leased line accounts tell me that they would 
disconnect from the big boys rather than accept the strangle hold of 
settlements.  The result - viola - a fractured, balkanized internet.

How are you going to guarantee the standards of service?  PUC 
certification in each state?  Just what the RBOCs would love.  Everyone 
has to open a 7 by 24 NOC or you can't be in the business?  Cisco 7000 
routers become minimum gear?  I know.  Everyone has to meet standards set 
by the CIX in order to play.  Seriously though - how are you going to do 
it?  What will the rules be and how will they be made?

Lets assume that this were done in the most benign possible way.  The 
only way smaller isps could stay in business would be to pass the 
increased costs on to their customers.  And then your friendly South 
dakota Internet service, would be like the nationals - $20 a month for 15 
hours and $2 and hour for each additional hour.  Not to mention the fact 
that the costs of entry would be catapulted so high as to exclude new 
start ups lacking sufficient outside financing.  As Compu$erve remarked 
in July, the cost model of $20 a month for unlimited service is a 
suicidal one for this industry.  Yeah undoubtedly if you have the 
overhead costs of an Hr Block or RBOC to satisfy.

Let me frame the question starkly.  To get the reliability that Hans 
Werner wants to what extent must we consolidate the industry and raise 
prices?  Killing in the process what makes the internet a magnet of 
attraction for some millions of users?  **OR** is there any alternative 
of letting a few build an inustrial strength network for those who demand 
it, an allowing a less costly more fault tolerant network to survive?  If 
so how might this be done?  Comments from policy makers for the big five 
would be welcome.

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