Customer AS

Michael Dillon michael at
Mon Aug 26 16:48:45 UTC 1996

On Mon, 26 Aug 1996, Sean Donelan wrote:

> Depending how you account
> for interconnect costs, a provider selling $2700/month T1 packet-switched
> connections with a 23:1 bandwidth overbooking ratio generates the same
> revenue as analog voice circuits at 10cents/minute - 4cents/minute
> interconnect fees.

You mean gross revenue don't you? Also, that price seems steep for 23:1
ratio. Wouldn't that be closer to the price for 10:1?

The other factor here is costs. The cost of billing 10 cent a minute phone
calls is HUGE compared to billing a bunch of monthly flat rate T1's.

> Well, there was a few rounding errors long the way, but 67Kbps is darn
> close to a DS0 at 6cents/minute.  Bad news for the Internet telephony
> folks, there still ain't no such thing as a free lunch.

Don't forget that Internet telephony uses compression. I don't know if
they use 4:1 compression but I do know that companies like Gandalf can put
4 voice lines through a DS0 and still leave 19200 bps for data.

> If I'm paying for voice telephone level quality, am I getting it?

You pay for what you get. If you don't like the quality, go somewhere
else. Interestingly, the advent of Internet phone allows consumers a
choice in quality that they didn't have before.

> Internet Network Operators (to relate this slightly to NANOG) need to
> look at diversifying their Internet connections between providers. 

Does this mean that Sprint should be buying transit form MCI and ANS
instead of just using their own lines? ;-)

Michael Dillon                   -               ISP & Internet Consulting
Memra Software Inc.              -                  Fax: +1-604-546-3049             -               E-mail: michael at

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