95th Percentile != Lame

Sun Jun 3 19:26:46 UTC 2001

[ On Sunday, June 3, 2001 at 11:39:21 (-0700), James Thomason wrote: ]
> Subject: 95th Percentile = Lame
>
> If I am not mistaken, the true "benefit" to 95% billing is that it allows
> the provider to charge for bits they never delivered.

You are mistaken!  :-)

The true benefit of Nth percentile billing is that it allows the
provider to sell low-cost, very high-speed, ports and only charge the
customer for the true costs (plus profit) that customer incurs.

For example it allows the ISP to sell a 100baseTX connection to a
customer who only really needs about 128kbps or less, but who happens to
be in the next rack/cage/room/etc. from your network.

>From the customer's point of view it not only dereases the cost of the
"local loop", but it also gives them some of the benefits of more
advanced delivery systems such as frame relay or ATM.  I.e. even if all
you ever move on average is 128kbps of traffic you've still got the
potential of bursting a small amount of data through at full wire speed.

Even more importantly if your ISP is also paying on the Nth percentile
rate then you're pretty much stuck with either paying through the nose
for available bandwidth (in which case you'd better either have very
deep pockets, or really need what you buy), or also paying on the Nth
percentile.

(of course all your data travels at wire speed -- it's just the gaps
between the packets that make it appear otherwise!  ;-)

It is really too bad that ATM didn't beat 100mbit ethernet to the
desktop....

>  The average will
> skew on a burst of traffic (>5% of the average) and you pay for it as if
> you had averaged that level the entire time. 

Yes, of course, and that's the whole point.  The user's got this big fat
pipe and if they make the mistake of actually using it in any
"significant" way then they increase the provider's costs and thus have
to pay "through the nose" for their mistake!  ;-)

If you don't want to over-pay then don't over-burst!  ;-)

Like I said, it's really too bad that ATM didn't get to the desktop first.

If a customer really wants to be careful then they can install an edge
device that does the appropriate kinds of QoS or rate limiting and
manage their bursts themselves.

> I cannot, off the top of my head, think of another telecommunications
> industry that relies on a system of averages for settlement.  It speaks
> pretty clearly of how immature the Internet industry really is.  

There's more than one (other?) telecom industry?  :-)

But there's really nothing immature about doing rate-based billing!

The telcos have been doing data-comm in this same manner for for maybe
decades.  I've even heard tell of those who allow their customers to
adjust the CIR (and automatically get billed for the new rate, of
course).

The only thing "immature" about it is the underlying link layers we have
to deal with in most cases.  If everything were FR or ATM then there'd
be no problem, right?  ;-)

> Or maybe not.  Perhaps the electrical suppliers here in California
> should bill in the 95th percentile, and cite the Internet as a rational
> example.

If I'm not mistaken the concept of rate-based billing originated with
electricity suppliers (who, it seems from stories I've heard, couldn't
figure out how to do it properly either!).

-- 
							Greg A. Woods

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