Paying for delivery of packets (was about Sprint Peering, and Importance of Content)

Thu Jul 11 15:37:01 UTC 2002

On 07:55 AM 7/11/02, David Diaz wrote:

 >Shane as far as the "thought" that backbones will "pay" to get to
 >your content.  It's just not going to happen.  If the content were
 >that important they might go directly to your customers and offer
 >them a wonderful deal to buy a link from them.

The reason it's not going to happen is that in today's economy it's more 
important for a content provider to have their particular content delivered 
to the end user than the end user wants the particular content.  Most end 
users have choice, they can get the same or similar content from many 
different sources.  Example: they can get news from CNN, on MSNBC, or the 
Washington Times, or the NY Times, or Reuters, etc.  Most content providers 
need every eyeball they can get, they can't afford to choose who can or 
can't see their content.  Thus, if there's a temporary or persistent 
connection problem between the two parties (content provider, end user's 
eyeballs), in the aggregate it ends up hurting the content provider more 
because in most cases the end user will usually just go find the same or 
similar content elsewhere.  CNN learned this lesson on 9/11.  When end 
users were unable to reach CNN, they went to other sites.  This hurt CNN a 
lot more than it hurt the end users.

If the problem is with an "important" connection, say between a user and 
their online brokerage account, they will either change IPSs or change 
brokerages.  Which is easier to change?  For most users, it's easier to 
change online brokerages.

That's why Akamai has a business model, content providers pay extra to 
ensure that their content can get to the end user, and get there fast, so 
that the user doesn't turn away and go to another site.  That's also why 
"user pays" websites haven't been very successful, except for niche markets 
(where the content is specific to the end user's needs, and not widely 
available elsewhere online).

It is my opinion that eventually the Internet will be mostly funded by 
those who send packets, and will be mostly free for those receiving said 
packets, much in the way that 800 numbers are funded in the telephone 
system.  In order for that to work, we will need a settlement system.  I 
predict that something like this will start happening before 
12/2005.  Certain services that are highly desired and high bandwidth 
(streaming radio comes to mind) will be funded with a subscription model, 
so that the end user continues to get the content without paying extra 
"delivery fees" to the ISP, but with payment to the originating site, and 
then settlements to the systems that carry packets.  Ultimately, it will be 
free to get packets, and expensive to send them.  End users will continue 
to pay a modest fee to get connected, but will have high speed connections 
(where feasible) and a modest outbound packet allotment.  If they want to 
send more packets than a typical end user (sending lots of email, or 
hosting a web server at home), they will also be a "content provider" and 
have to pay more for the packets they send.

jc