dannystroud at msn.com
Mon Jan 27 06:51:11 UTC 1997
I empathize with your angst over the charging issues. But the answer is in
microeconomics. Those that have something that others want can charge for it.
Those that want it pay. If you want to get to a network bad enough you will
pay for it-one way or another. The concept of transit is not very different
from what people are now referring to as settlement charges. The magic is in
making your network a more desirable destination than the other guys. In many
industries there are often "surrogates" for value that are used to set
pricing. Per minute charges in wireless (cellular, PCS, etc.) is and example.
Not all minutes are of equal economic value but for the most part you pay the
same rate whether you are talking to your mother or closing a billion dollar
business deal. I suspect that the ease of anointing bandwidth as a surrogate
for value will make it so until someone is able to measure the economic value
of an individual packet or web page hit. Until then I predict that the
networks with the biggest infrastructure will be in the best position to
extract peering charges.
Batten the hatches, the onslaught of change is upon us. I suspect that this
is the first of many economic model changes in the Internet. des
Danny E. Stroud
From: owner-nanog at merit.edu on behalf of Vadim Antonov
Sent: Sunday, January 26, 1997 12:54 AM
To: davec at ziplink.net; madison at queber.acsi.net
Cc: nanog at merit.edu
Subject: Re: peering charges?
Eric D. Madison wrote:
>Since some of the larger vendors (Cisco mostly) has introduced accounting
>features into their software settlements could start any time.
a) the accounting was there for years, so what
b) a 100-byte packet travelled from provider A to provider B. Should A pay
to B or vice versa?
So far nobody gave any useful answer to that question.
There are no settlements because traffic has little relevance to relative
worth of connectivity from one provider to another. The large ISPs are
generally interested in market share or peers, not in volume of mutual
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