Transaction Based Settlements Encourage Waste (was Re: BBN/GTEI)

John A. Tamplin jat at
Sat Aug 22 17:03:19 UTC 1998

On Sat, 22 Aug 1998, Mike Leber wrote:

> Ok, now see how easy it would be to attract legitimate users.  People
> would run ads to the effect of "Are you a dialup provider?  We'll pay you
> to get an OC3 from us!"   Or "Are you a web crawler?  We'll pay you to
> host with us?"  Or any one of several other examples...

In fact, this already happens with telco termination charges.  For example,
there are CLECs that call up dialup ISPs and offer free PRIs.  They plan
to make more on termination charges than they could possibly get from the
ISPs in a competitive environment.  Aside from the fact that they don't
have copper in the ground, this is the reason CLECs don't want residential
customers, since they would be the ones paying termination fees on originated
calls.  When enough CLECs are concentrating on businesses that only have 
incoming calls (ISPs, tech support centers, 900-style services, etc), Bell 
will scream to the FCC that termination charges need to be reevaluated.
With this approach, eventually *no one* will want customers that make lots
of outbound calls -- let the other providers have them and then collect the
money when they call your customers.

The point is it is an unstable environment.  Unlike capitalism where our
innate greedy nature serves to balance the system, in this case the greedy
nature serves to unbalance the system by promoting inefficient use of 

John Tamplin					Traveller Information Services
jat at Traveller.COM				2104 West Ferry Way
256/705-7007 - FAX 256/705-7100 		Huntsville, AL 35801

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