Pricing model for transit services

Mon Sep 23 19:50:17 UTC 2002

On Mon, Sep 23, 2002 at 11:26:22AM -0400, Alex Rubenstein <alex at nac.net> wrote:

> 
> 
> 
> > - flat fee for a L Mbps link
> 
> Also known as 'fractional' or 'tiered.' $x for y mb/s, and it is
> rate-limited.
> 
> 
> > - volume based, y $ per Mbps (95% quantile) for a L Mbps link
> > - burstable, flat fee for x Mbps on a L Mbps and z $ per Mbps above x
> 
> These two are essentially the same. You do have three variations of
> usage-based, however:
> 
> a) vth percentile: $x per y zzzbits/sec, with a t committment.
> Occasionally, any usage over t has a different price.

In my somewhat limited experience, "t" commitment is usually at least 10% of
wire speed.  Though if transit is coming off low-cost LAN ports in data
center environments, sales folks will probably approve lower commits if 
pressured.

Also, some large ISP's have a policy that you must buy the whole pipe
unmetered if your commit is >50% pipe speed.

And there are at least 4 ways of computing 95th percentile, though I'm sure
there've already been threads on this.

Cheers,
-Lane

> 
> b) 'Average usage', which is is the same as A, but using an averaging
> measurement system, rather than a percentile system (50th percentile is
> NOT the same as, or even relevant to, average).
> 
> c) counting bytes: $x per y bytes.
> 
> 
> -- Alex Rubenstein, AR97, K2AHR, alex at nac.net, latency, Al Reuben --
> --    Net Access Corporation, 800-NET-ME-36, http://www.nac.net   --
> 