Re: cost of 1 gig

[David Farber <dave () farber net>]

Sounds like what Comcast is doing djf

Begin forwarded message:

From: Tony Lauck <tlauck () madriver com>
Date: April 15, 2009 11:18:07 AM EDT
To: dave () farber net
Subject: Re: [IP] Re:  cost of 1 gig

The way to deal with the problem of peak congestion is to use proper  
congestion control at the bottleneck resources:  Slow down big users  
who contribute to congestion at busy times.  Don't slow down big users  
who only work off peak. Allocate bandwidth at congested times on a  
fair basis, where fairness depends on the share one has purchased --  
users who pay more get a larger share.

This afford users several ways around poor performance.  They can time- 
shift their heavy traffic.  They can go for lower quality video. Or  
they can pay up.  (In some cases using money they are no longer paying  
for cable TV.)  Users are gently nudged into becoming more efficient  
or supporting the infrastructure through larger contributions.  Unlike  
fixed caps they are not subject to sudden disconnection or fearfully  
large monthly bills.

Tony Lauck
https://www.aglauck.com



David Farber wrote:
> Begin forwarded message:
> From: Brett Glass <brett () lariat net>
> Date: April 15, 2009 10:53:04 AM EDT
> To: dave () farber net, "ip" <ip () v2 listbox com>
> Subject: Re: [IP] cost of 1 gig
> At 03:05 AM 4/14/2009, David Farber wrote:
> > So what does it cost off peak?? djf
> As I've mentioned, it doesn't make sense to talk about what it costs  
> "off peak" because we, as ISPs, don't get the choice of buying  
> bandwidth only for the peaks. (And if we were offered that choice,  
> it wouldn't save us any money; the upstream backbone provider's  
> economics dictate that it would carry a premium price at those  
> times.) We must buy the bandwidth to handle the peaks at all times.  
> So, that 1 GB at "rush hour" raises our costs 24x7. It does,  
> however, make sense to charge a user who pushes up the peak  
> consumption for doing so, since he or she is the reason our costs  
> are increased.
> Now, one might reasonably suggest that ISPs have "off peak" rates  
> which are lower, or at the very least drop surcharges for higher  
> consumption at those times. And this is, in fact, done by cellular  
> companies, who are in a similar situation. But because the Internet  
> is a different medium (one can generally only talk on one call at a  
> time unless it's a conference call, and every call on your cell  
> phone takes the same amount of bandwidth), the situation is more  
> complex. It's easy for such a billing model to become very opaque to  
> end users. What's more, there is a nonlinear feedback loop here.  
> Billing plans don't just react to customer behavior, they also  
> influence it. So, time-of-day-sensitive pricing could well create  
> bandwidth crunches at other times. This phenomenon is, indeed, seen  
> in the cellular world just as it was in the days of land line long  
> distance. People call Mom as soon as the rates drop for the day or  
> cell phone minutes become free. This, in turn, has caused cellular  
> companies to push the hour when this happens from 6 or 7 PM (several  
> years ago) to 9 or 9:30 PM today.
> As I've mentioned in postings elsewhere, the difficult thing is to  
> determine how to draw the pricing curve between flat rate customers  
> with limited usage and "bandwidth hogs" who must be charged at cost  
> plus overhead for bandwidth. The industry will (and wants to)  
> interpolate on pricing models which do this.
> The important thing is to let it do so, as much as possible, based  
> on customer behavior rather than regulation. Regulation precludes  
> innovation, and is overwhelmingly likely to steer us away from the  
> best result. The Martin FCC's attempt to ban traffic shaping and  
> prioritization, and to prevent ISPs from enforcing reasonable terms  
> of service, was a bad move; it eliminated what was, IMHO, one of the  
> best and most transparent options. It was also what caused some ISPs  
> -- especially those which were not Tier 1 backbone providers -- to  
> implement the admittedly crude caps and overage charges we are  
> seeing today. And now, one New York congressman is proposing a  
> prohibition on caps and overage charges -- backing ISPs into a  
> corner. Given both of these constraints, it would become impossible  
> for an ISP to keep revenues in line with expenses.
> --Brett Glass




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