Paying for delivery of packets doesn't work

Mike Leber mleber at he.net
Sat Jul 13 07:25:21 UTC 2002



On Thu, 11 Jul 2002, JC Dill wrote:
> 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.

Whether or not this happens by economic darwinism through content networks
building out or paying for infrastructure is completely separate from your
next point, which has a major problem.

>  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.

This incentivizes usage and creates an artificial revenue stream.

Simply put, any settlement system in which either party can be paid, will
result in both of the parties causing the type of traffic that results in
them getting money from the network so foolish as to agree to such terms.

If you get paid to suck data then you could pay google to host on your
network and laugh all the way to the bank, you could even pay them extra
if they index the entire Internet every 12 hours, that way the search
database would be real fresh of course, nudge, nudge, wink, wink.

If you get paid to send data, well... that is easy.

See the nanog archives for more examples of why settlement based peering
doesn't work.  There was long thread about this two years or so ago.

Mike.


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