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North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical Re: The Great Exchange
Michael Shields writes: > In article <[email protected]>, > "Perry E. Metzger" <[email protected]> wrote: > > In the long run, why are we assuming there will be locality of > > traffic? > > > > It is true that the old PSTN has locality of traffic, but it doesn't > > have flat rate pricing, or the usage patterns that the Internet has. > > Why are you assuming that the Internet will continue to have > non-distance-sensitive pricing, when it clearly has distance- > sensitive costs (ultimately)? I'm assuming it for several reasons. 1) The price of metering packets by destination exceeds the cost of providing the underlying service as it stands. This does not make me think that distance sensitive pricing has a bright future. 2) Long distance carriers have essentially eliminated distance sensitive pricing for domestic U.S. calls, and at the moment the price on such calls is only a hair above the local carrier settlement costs of 7 cents per minute (3.5 cents per side.) Cellular carriers are getting into the act, eliminating long distance charges for a small flat fee. International pricing is also plummeting. None of this leads me to believe that the future for metered PHONE SERVICE is very bright, and you're trying to argue that metered internet service has a bright future? 3) It does not appear that moves towards metered pricing have been well recieved by consumers. ISPs are sticking to their current pricing model, although they are often limiting the flat rate zone to "reasonable" personal usage levels of a couple hundred hours per month. In short, I see no economic basis for such metering, and no moves towards such metering. Maybe I'm wrong, but I doubt that we're going to see any change in this any time soon. Perry
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