More Sidgemore on per-bit pricing

Daniel Senie dts at
Sat Dec 5 20:05:13 UTC 1998

Barry Shein wrote:
> One possible positive effect (for the consumer) of "per-bit" pricing
> is the opportunity to buy larger pipes but only pay for what you use.
> Right now flat-rate pricing mostly assumes you're going to, within
> some statistical model, actually use the bandwidth you get, or
> certainly that someone buying a DS3 is going to use a lot more
> bandwidth, on average, than someone with a DS1.
> [Rest of post deleted for brevity]

I wonder if the northeast is more expensive than elsewhere, but from my
recent shopping for T1's for myself and my clients, I find the cost of
the service over a T1 isn't the budget buster. For one location, all T1
circuits (before buying IP service, just the telco charge) is $613 a
month. To another location, the circuits are $900 to $1500 a month.
Adding $500 to $1000 on top of that for full-rate service, vs. adding
$200-$500 on top of that for "burstable" service just doesn't generate
much excitement.

Until the base telco circuit prices are lowered dramatically, the
pricing of packet service over them, while not "noise," is certainly
less interesting.

Now, if the whole circuit, T1 and IP packet service, were all priced on
the basis of traffic, that'd be interesting. An underutilized T1 would
incur some small base charge, plus traffic/usage increments beyond that.
That'd be quite attractive, though I doubt the phone companies would
think so.


Daniel Senie                                        dts at
Amaranth Networks Inc.  

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