MFS WorldCom/WilTel/LDDS

Sun Sep 1 14:41:52 UTC 1996

On Thu, 29 Aug 1996 01:47:38 -0700  Vadim Antonov wrote:
>Generally speaking, at least 70% of users already have metered
>access of that kind (in form of per-hour connect time charges),
>so in this sense Internet is metered already, and was like that
>for years.  Obviously that's not "metering" Metcalfe et al
>are calling for.
>
>(BTW, i know providers who do attempt to charge differently
>for local and international traffic by counting packets,
>but they have developed quite a lot of software and  have the
>financial and legal framework to support it.  The fact that
>they don't have anything faster than E-1 helps a lot, too.)

I think you are confusing dialup and leased line capacity planning
models.  They are inherently different.  If I have a POP in City A
with a T1 to my backbone, I pretty much know how many dialups I can
support.  I do not say that 53 28.8kb dialup users will saturate my
T1 since statistical models show that will not happen.  Every ISP
has their own stats which may range from 200-1000 simultaneous users
depending on their pricing structure and how serious they are about
being an ISP.  But I do not have to worry that a lone user running
CuSeeMe (or even SmellU/SmellMe (see realaroma.com/realaroma.cgi)
:-)) since the worst they can do is max out at 28.8kb on the T1
line.

On the other hand, if I have a number of leased line customers
connected to that T1 POP, some are 64kb, some are 256kb and some are
T1, then my model alters since the T1 users can indeed max at the
full speed of the line and others can utilize 15% of the line as
compared to 1% for a dialup user.  Yes, the statistical model shows
they will even out, some will use 1%, some 10% and others will use
80% but in the end it all evens out.  But that lone wolf T1 client
can indeed saturate my line, especially if it is a garage ISP with
1000 users from the neighborhood offering flat $9.95 and having
a modem bank of 96 modems.   Or a small startup with every user
doing RealAudio during the day.

Just look at the example of the NANOG poster who had to move ISPs
since his thruput was high enough to double his costs so he moved
to a flat rate ISP.  Those flat rate ISPs will quickly load up with
these thruput heavy users and in the end either lose money every
year or go bankrupt.

The trend is for flat rate dialup and usage based rates for leased
line.  Those ISPs that ignore that trend will not last.  The kicker
is Cable/VSAT.  A consumer that is offered 2Mb-10mb to the home via
cable or DirecPc (bidirectional) for say $50 flat rate will
single-handedly be able to overrun the backbone line of the POP.
Those ISPs that intend to charge flat rates for high speed home
usage are "hoping" that the usage pattern will be like dialup users
rather than leased line users.  Not!  It won't be long before that
garage ISP with 96 28.8kb modems and a T1 line moves it to his
bedroom and figures out how to connect that modem bank to his 2Mb/sec
cable TV Internet system.  And all you need is one like that in every
neighborhood of a thousand.

But when I specify usage based rates I am referring to a simple
meter like the gas company, not a complex meter like the phone
company.  As someone else stated, telco's are approaching 50% costs
for billing due to their overwhelming complexity between local,
long distance, international, time of day, length of call, services
used, etc.  Gas and most electric companies charge a flat rate per
usage, no matter what time of day you use it. Their billing costs
are far less than telcos.  ISPs, in order to survive, had best not
follow the telco model of billing complexity, but instead follow the
utility company model of simple billing.  KISS.

>
>--vadim
>

Hank