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Re: double-entry accounting :: Time to understand accounting rather than just bookkeeping V2
From: David Farber <dave () farber net>
Date: Sun, 31 Aug 2008 12:43:49 -0400

Begin forwarded message:

From: Scott Moskowitz <scott () bluespike com>
Date: August 31, 2008 11:24:45 AM EDT
To: Bob Frankston <Bob19-0501 () bobf frankston com>
Cc: Dave Farber <dave () farber net>
Subject: double-entry accounting :: [IP] Time to understand accounting rather than just bookkeeping V2


As argued repeatedly, I absolutely agree with you & add that the double-entry accounting systems we have in place for modern commerce may be the most undervalued innovation at the heart of all market economies. (Prozac a close second?)

Attribution for what is the network? What is information? What is value? Whose "last mile"? Whose bandwdith? Whose computational output? Whose "ownership"?

These questions are exceedingly reduced to private enterprise TOS & artificial legislative policy ignorant of the inherent fungibility of informational value, trust & the notion that security should be treated more like insurance (credit to Dan Geer's observations in that regard). The extent and pervasiveness of subjective policy decisions now clearly undermine the contributions of true innovators (& of course, most harshly, inventors) while the market has essentially "policed itself" - up until a private company loses money ...

We have created & invented tools for accounting intangibles for over 15 years. We believe the *noise* that obscures what we pay for - the actual "willingness to pay" - is equally obscured by the enormous explosion in "exotic" financial instruments - essentially providers of any good or service can get paid in more ways, faster than at any time in history. Does anyone remember money couriers? How about those pesky credit card books you received as a retailer every week?

My pet peeve surrounds the creation of an equitable balance between the digital copy problem (AKA "piracy" or is it "marketing") and privacy (AKA "the right to be left alone" - most egregiously such problems as ID Theft). Eg, simplistically, my social security number in consideration for your copyrighted work. Both are issues that concern the same set of security & fairness issues. In the end, whatever the cost, no one can replace you - but who should be accountable to this form of piracy? At what cost?

Maximize the value of a bit in a bit per time calculation and you will maximize the *value* of the network. But, we need to get agreement on the accounting system[s] first & that includes such otherwise mundane financial activity as securitizing bandwidth to make it more liquid for users; defining the last mile and what the user "owns"; making the system as transparent as, say, your 1040 ;-); and, treating bandwidth as currency.

Great dialog!

Prof. Farber - special thanks for keeping all of us on track (& getting many true innovators & inventors some mind-share as they are all truly interesting people!)

Scott Moskowitz

On Aug 31, 2008, at 6:31 AM, David Farber wrote:

Begin forwarded message:

From: "Bob Frankston" <Bob19-0501 () bobf frankston com>
Date: August 30, 2008 9:41:55 PM EDT
To: <dave () farber net>, "'ip'" <ip () v2 listbox com>
Subject: Time to understand accounting rather than just bookkeeping V2

After writing the comments below I realize that not understanding the concepts of accounting is only one issue. It was hard for Eisenhower and Gore to get people to buy into the idea of interstates too – even after the examples of the Autobahn and Eisenhower’s experience after WW-I (one). The highway analogy isn’t perfect but as I’ve said (quoting Andy Lippmann) networking is something we do and not necessarily a service. We need to get beyond the idea that we must buy networking from a provider – once we do then the rest is (relatively) easy.

Bookkeeping is just applying the rules you’re given. Real accounting is discovering effective measures that help you make decisions.

We have accounting problem in the real sense of accounting. What are the effective measures of value vs costs? The current models are all based on century old telephony or railroad models. How do you cover the cost of an office LAN? Not by measuring charging for each byte but considering the overall value and funding it as necessary overhead.

Given how little of the potential capacity we are using it’s obvious that the current measures leave us woefully shortchanged. What percentage of the GDP would it cost to upgrade the current fiber at the rate capacity increased in the 90’s? What percentage of the cost of laying a highway is the cost of laying a few strands of fiber.

Note that I say potential capacity – this is in terms of how much we can light up, how much we can light up with new gear, how much we can add to various rights of way, how much effective capacity we can create by being smarter as in not doing everything with home runs rebroadcasting the same video, how much we can gain by using fungible bits instead of partitioning them etc etc etc.

What is the value? In a multi-trillion dollar economy how many billions should we invest? If we use the interstate highway system as a cost/benefit model we should be able to do far better is the cost/benefit of investing in this modern infrastructure?

As long as we are fixated on counting bits we’ll lose the value of what we can do with the bits. And counting bits is a major expensive in its own right when you build an infrastructure whose primary purpose is to assure that we can indeed account for bits. What other reason is there for taking the network effect and throwing it away by partitioning the capacity into teensy ISP slivers?

We need an real accounting – not bean counting. Let’s not presume or, worse, create scarcity just because we can’t count right.



From: David Farber [mailto:dave () farber net]
Sent: Saturday, August 30, 2008 20:33
To: ip
Subject: [IP] Re: do read !!! Comcast confirms 250GB cap effective October 1

Begin forwarded message:

From: "Dr. Lawrence Roberts" <lroberts () anagran com>
Date: August 30, 2008 1:16:14 AM EDT
To: David Farber <dave () farber net>, Larry Roberts <lroberts () anagran com >, dan () lynch com Subject: Re: Fwd: [IP] do read !!! Comcast confirms 250GB cap effective October 1

Unfortunately, the problem is even worse for Japan and S. Korea. P2P users are more common, the countries are small so most downloads or uploads go international, and their High speed symmetric BB links suffer far worse than our un-symmetric lower speed BB connections. So they have major economic problems. They have tried DPI even before us but it cannot find all the encrypted flows now so the remaining 30% or the P2P users still can operate freely. The remaining P2P users then spawn more flows and take up the same 80-90% of the pooled capacity. The result is the average user get very poor service.

However going to a GB cap or a charge per GB is really bad as we know. But put this down to flailing for a solution in the face of an extremely bad situation. The Internet cannot stand up to this as more and more applications discover the ease of getting more capacity by using more flows.

I continue to believe that equal capacity for equal pay instead of equal capacity per flow is what we need to move to, since then congestion will affect us all fairly (as it used to). But how does one convince the world?

At 02:12 PM 8/29/2008, David Farber wrote:

Begin forwarded message:

From: Dan Lynch <dan () lynch com>
Date: August 29, 2008 2:37:05 PM EDT
To: Dave Farber <dave () farber net>, Tony Lauck <tlauck () madriver com>
Subject: Re: [IP] do read !!!  Comcast confirms 250GB cap effective
October 1

Thanks Tony.  Now I think it gets trickier here as a solution for a
AS (like Comcast) may not be very helpful for customers who span
Ases, if the intermediate systems do not also play by the same rules.
someone like Mike O'Dell can offer his deep experience here?  Or Larry
Roberts whose new company, Anagran, is wrestling with this issue of
"fairness" across a long haul. We do need some "rules of the road" that
benefit everyone or no one will win very much.  Right now those
that are overprovisioning (like Japan, South Korea and Finland) look
smart and don't have to address the fairness issue (yet).


On 8/29/08 10:13 AM, "Dave Farber" <dave () farber net> wrote:

Begin forwarded message:

From: Tony Lauck <tlauck () madriver com>
Date: August 29, 2008 12:55:28 PM EDT
To: Dan Lynch <dan () lynch com>
Cc: "'David Farber'" <dave () farber net>
Subject: Re: [IP] Re:   do read Comcast confirms 250GB cap effective
October 1


Yes, a cap will solve the congestion problem if it is set sufficiently
low.  In the limit it definitely solves the congestion problem by
driving away all the customers. (The Prodigy solution.)

The problem is that congestion is caused by instantaneous load
exceeding capacity, whereas monthly usage measures average load. If
there are, say, four busy hours per day, an average based cap will
need to be set (roughly) six times lower than it would otherwise need
to be. The result will be unhappy customers. In addition, the bean
counters (who are unlikely to know any queuing theory) may suggest
that expenses be cut by reducing resources!

I have written many IP posts on this subject and you can find them in
the archive. Basically, a proper solution is to give higher priority
to users who create less congestion. Let everybody go as fast as they
want when there is no congestion. If people need or want more capacity
than others, let them pay more for more "shares" and adjust the
weighting accordingly, and use the money to increase capacity. This
approach is politically neutral, i.e. it will work in a capitalist or
a socialist society. Unlike the Comcast cap it follows the principle
of maximum utilization of resources.

Tony Lauck

Dan Lynch wrote:
Tony, can you teach me how a cap does not solve their congestion
In the limit it sure does...

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Tel. 707-967-0203   Cell  650-776-7313
My assistant is Dori Kirk   Tel. 707-255-7094  dori () lynch com

Dr. Lawrence G. Roberts, Ph:+1 650-906-8746, W: www.anagran.com, E: lroberts () anagran com Founder, Chairman, Chief Architect, Anagran, Inc., 580 Pastoria Ave., Sunnyvale, CA 94085 USA If not for you, please return. Any use other than the intended recipient is unauthorized.

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