BBN/GTEI

Sat Aug 22 06:20:20 UTC 1998

Dave Rand wrote:

>> Assuming it does matter, in which direction does the value flow? 

and Michael Dillon responds:

> Here's the complex part. The value is not expressed in bits and it depends
> on the destination within the peer's network. I am assuming that we can
> map the IPv4 address space by city and that we can set some value to each
> intercity link. This means that a stream of bits entering a peers network
> in San Jose with a final destination in San Jose would be free. But if the
> stream of bits was destined for Santa Cruz there would be a small cost.

I don't see that you've answered his question about value flow.  You're
describing how to set a value on a stream of packets without answering the
question of who should pay.  Should we charge the sender or the receiver?
Back at the 1995 APRICOT conference there was a mention of an IETF WG
(likely now dissolved) which was specifically working on the settlements
issue, and their answer to this question was "it depends".  For every packet
you have to determine a packet owner who is responsible for paying.  The
owner could vary per application, per site, and/or per end user.  I could
even imagine that responsibility for payment could be split between sender
and receiver: 50/50, 90/10, choose your favorite.  If I'm downloading a copy
of sendmail, I'm probably the "owner" of those ftp packets because Berkeley
makes sendmail available as a public service and doesn't want to pay
settlement costs to reach me.  If I'm downloading a product white paper,
maybe I expect the company that wrote the white paper to pay transit costs
to reach me because it's a marketing expense that they should absorb.  If
somebody is sending me spam, I want the spammer to be the owner of those
SMTP packets because I'm certainly not going to pay a settlement fee so that
people can spam me.

Back to Dave Rand again:

>Down this path lies madness.

Perhaps.  On the other hand, there are already multiple Silicon Valley
startups whose business models revolve entirely around metering every packet.
And several well-known SF Bay area companies are already paying on a
strictly metered (per Gb) basis to deliver web and ftp content to customers
and potential customers.  Metering in a multi-provider environment generally
requires settlements.

>On-net facilities have made distance-sensitive pricing in most metro areas a
>thing of the past. Sub $0.04 per DS0-mile long-haul rates have made long
>haul circuits very affordable.  High speed WDM dark fiber routes will make
>long haul very, very cheap in the next 2 years.

This is the old "bandwidth is so cheap that it's free" argument.  True,
bandwidth is now inexpensive enough for a single DS0 that it's becoming
counterproductive, from a marketing standpoint, for the telco to attempt to
differentiate based on distance for a voice call.  But if we're ever to
arrive at the day when I can turn on my 100Mbps video-over-IP feed to my
home PC over my FTTH connection, and expect to actually get reasonable
performance, we're probably going to need both metering and inter-provider
settlements.

Bruce Hahne
hahne at netcom.com