At 12:42 PM 6/2/98 +0200, Julian Rose wrote:

Some crystal ball gazing...

Those who peer too much, into crystal balls, often eat glass <grin>.

I expect to see an amount of distance billing in the future, but only alongside QoS billing, for example.

Email - Non urgent, low traffic - I would expect this to remain flat rate (i.e. Free with connection). As with browsing traffic etc. Caches will add an intersting factor to this model, e.g Retrieving files from the ISP's local cache - (Free with connection), Retrieving from distant locations, perhaps dependant on time of day etc.

Why would there be a difference? On one hand, ISP disk capacity is used and OTOH ISP band-width is used. These days, about the same cost. Besides, it's second-order effect anyway and the market won't stand-still for it.

Voice over IP - This is starting to get bandwidth and delay sensitive dependant on the efficiency of the Internet in the future, I expect this might start to be billed dependant on distance/providers travelled over etc. As otherwise if two ISP's do not directly connect or peer, an intermediate ISP would have to carry this traffic. If this traffic requires a high QoS, I would imagine the intermediate ISP would want to charge for it.

Does that "Intermediate ISP" include such as MAE-WEST? They're already charging for it, have you seen NAP bandwidth prices lately?

Video over IP - When it comes around and end users via their xDSL connections want to receive 1.5Mbs of video traffic - I can see definate costs being incurred. Of course multicast techniques, caching etc will make this not a geographical distance based pricing model, but a pricing model will surely evolve.

Until we get decent bandwidth at the end-user site, this simply won't happen. Modem connections barely support Voice-over-IP. I mean a preponderance of end-users must have sufficient direct band-width to make them a decent market. Even when this does happen, they won't want to use it for video. A classic is the MCI commercial where that gal was telecommuting (bath-robing at noon), the last thing such would want is a video-based conference. Been there, doing that.

Of course this argument of carrying others traffic applies to peering also, if two ISP's peer a similar amount of data, no problem, but if it is one sided then billing would have to occur. In other words, we will all buy and sell our connectivity to each other.

One thing this state of affairs would lead to if it occurs is some scope for very interesting pricing models, value adds etc.

I don't think so. We have had remarkable lack of success in moving away from the flat-rate pricing model, in the face of competition. Customers want predictable bills. Volume based billing will not give them this. However, they are more than willing to pay higher flat-rate costs, if there is value-add.

A topic measured earlier was the ratio between payroll/equipment costs vs line costs. The ratio of this will depend on the model of the ISP. A dialup provider will incurr much higher support costs for a much smaller bandwidth than a transit/backbone provider, which the line costs would be expected to be the majority of their costs.

... Perhaps a bit more than 2 cents...

Julian Rose ---------------------------------------------------------- Internet Planning & Design AT&T Unisource Communications Services, Hoofddorp, Holland Tel: +31 (0)23 569 7878 Fax: +31 (0)23 569 7455 ----------------------------------------------------------

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