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RE: peering charges?
From: Vadim Antonov <avg () pluris com>
Date: Mon, 27 Jan 1997 00:49:00 -0800

Danny Stroud <dannystroud () msn com> wrote:

I suspect that the ease of anointing bandwidth as a surrogate
for value will make it so until someone is able to measure the economic value
of an individual packet or web page hit. Until then I predict that the
networks with the biggest infrastructure will be in the best position to
extract peering charges.

The computational cost of any microeconomical tweaking (such as resource
reservation) by far exceeds the cost of delivering the service.

Ergo: those who don't do that will be able to offer comparable quality
of service at lower prices.

The exception is static priorities.  I think what will happen is that
providers will be offering different "mixes" of priorities, or charge
separately for priority traffic.

Reservation is a non-issue.  It is a bunch of B.S.  I won't go into
detalied explanation why, i did that many times already (i can
point to a relevant paper).

Batten the hatches,  the onslaught of change is upon us. I suspect that this
is the first of many economic model changes in the Internet.  des

I do not think there's going to be any large change.  After all, the
present economical model is as old as the modern civilization.

In fact, the only significant change in 90s was demise of "reseller"
surcharges -- which was something i was instrumental in transplanting
from Russia to US (an ISP in Russia i founded with friends in 1990
created an enormous infrastructure by _subsidizing_ local ISPs by means
of "wholesale" pricing and technology transfer; in effect we reinvented
franchise business).   The lack of the high entry barrier for small ISPs was
what got Sprint into big league, and made it possible and practical
for mom-and-pop ISPs to bloom (which they did immediately).  Technology
was available for years before the ISP boom.  Ultimately, Sprint's tactics
forced incumbent backbone ISPs to reevaluate the reseller surcharges (or
lose the small ISP market completely).

--vadim
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