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Re: Transaction Based Settlements Encourage Waste (was Re: B

  • From: Sean Butler
  • Date: Mon Aug 24 12:23:57 1998

>> Transaction Based Settlements Encourage Waste

I think everyone agrees that the above statement is true in today's Internet
model, where customers are charged flat rates for their connections.  But if
we change the peering model, why should we not change the model for
charging customers?  If we do that, then settlements can work, and the
problem of metrics for how to charge should become much easier...

Take the aggregate traffic from A --> B, and from B--> A, and whoever receives
more bits pays the other provider.   Say it is A that has to pay B, as B is a
content provider and A is a big dial ISP.  Now, if A charges $19.95/month flat
rate to all of its dial users, A instantly loses.   But if A charges its dial
based on the bits received, or time connected, perhaps it becomes more even.

Network A can't win in a settlement based peering relationship unless he passes
the costs on to his customers, and at flat-rates, whether it is dial up or
leased line,
that is not happening.  So, charge the content provider for outbound *and*
traffic.  This can and should be subsidized by advertisers, as the more 'hits'
site generates, the more $$ you can charge.   (Of course, this only works when
advertisers  are willing to  pay to be on your site, but if they aren't
willing, either
your site has content that doesn't have mass appeal or the advertiser doesn't
want to be associated with your content.   For the former, you probably aren't
getting enough hits to worry about usage based costs.  For the latter, find
advertiser or someone else to pay...) For the dialup user, charge him a lower
monthly cost of, say $5, but charge him for the traffic to and from him.
What's the
cost?  Whatever it takes to make money while remaining competitive!

There are still problems with DOS based attacks, but those need to be resolved
anyway.   As for writing 'fraudulant apps' that generate asymmetric flows to
try to
'even out' the peering relationship,  it doesn't work anymore for creating flow
to your own network.  Your paying the other provider because they are sending
you more traffic than you are sending them.  For the opposite direction, if you
can write an app that sends more traffic out to the other network, you'll need
valid host to talk to.  I'm sure the other provider won't have one of their own
machines doing that, so you'll need a customer of the other network to receive
that traffic.  But now that they are charged for it, that won't happen.  (I'm
someone out there can think of ways around this, but I imagine there are
solutions to them.  If its fraudulent traffic, and you face serious fines and/or
periods of time where you have to shut down your network, would you really
take the chance?)

Of course, the first ISP that starts to do usage-based charges may stand a good
chance of losing many of their customers, so this would have to be Industry
wide.  And
the peering charges would have to be the same (or at least on the same order of
magnitude) between all ISPs, or peering imbalances will quickly be created.
there will most likely have to  be, at a minimum, an Independent Peering
Council, or
at worst, government regulation, to make this happen.  :-(

DISCLAIMER:  I'm not advocating this solution, and it may or may not express
the views of my employer.

I should also state that I am doing my M.S. Thesis on "The Evolution of
Any original ideas I see on nanog (or com-priv, where this discussion really
be) will be quoted as such!

Sean Butler, CCIE #3897
IBM Global Services -- OpenNet Support
Phone:  8-631-9809,   813-523-7353
Fax:        8-427-5475   813-878-5475
Internet email:  [email protected]