It strikes me that there are lots of legitimate, but conflicting, views on this topic - all of which come down to there being no clearly established principles for peering, traffic exchange, or settlements (either de facto or imposed by law or regulation ---- and different player are coming from worlds with very different existing models. Traditional package delivery: - sender pays, shipping costs paid by purchaser - COD model - purchaser pays on delivery There's the traditional telecom model: - end users pay for basic connection and local facilities (which, for corporate users includes PBX or Centrex costs) - caller pays for end-to-end connection - caller pays local carrier - with money flowing to both the long-haul carrier and the far-end local exchange carrier (somewhat modified, for a time, when it was common to have a separate long distance carrier, and a separate bill) - and then there's the whole realm of 900 numbers - money is collected by the telco, but forwarded to 3rd party providers Wireless: - pay by the minute for connection, at both ends - settlements up and down the chain Cable: - end user pays for connection and content - cable company pays content providers Internet: - users pay for access, pay more for a larger pipe - access networks pay for connections to backbone networks - some formal exchange points - lots of back-room peering arrangements - general principle of settlement-free peering when traffic flows are equal in both directions - big problem with large one-way flows (e.g., the purported 1/3 of Internet traffic that consists of Netflix video streams - not sure I completely believe that statistic, but video sure seems to dominate the net these days, with a lot of it coming from Netflix and maybe YouTube) So... which model to apply: - shipping model: sender pays shipping, bundled in price (we all pay Netflix, Netflix pays all the carriers) - COD model: (we're still paying Netflix, but Verizon collects and forwards the dollars) - telephone model: caller pays (but the notion of caller is kind of tricky in a P2P - cable model: customer pays local carrier, local carrier pays all the upstream costs for both content and carriage (Verizon becomes Netflix customer, pays Netflix) And that's before we get into settlements - whomever pays the initial bill, and whomever collects it - who pays the folks in them middle. There are real costs, ultimately the end user pays the bill - so it comes down to who collects the dollars and how they get distributed. Where it gets muddied up is when: - we try to avoid models that are "unfair" and/or "anti-competitive" and/or threaten to Balkanize the net ("Fast Lanes," "net neutrality," "common carriage") - a rather important set of considerations to most of us - big players start pointing fingers in the interests of pushing costs onto others while maximizing their own profits All in all, one big mess. Miles Fidelman -- In theory, there is no difference between theory and practice. In practice, there is. .... Yogi Berra