Hello Fellow NANOG'ers, I was just thinking about this - tell me if it sounds reasonable? The company that I work for developed a piece of technology which, through rate-limit statements, allow customers to buy/sell bandwidth "on demand". Now, I was thinking: "Why can't we take this technology that we've tested successfully in a colo environment and adapt it a little bit for personal/buisness-class ISP's to allow them to bill for the bandwidth that a customer uses, and only that with the exception of a base monthly fee (to cover the DSL/T1 loop, e-mail services, support, etc.) of a few dollars. Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who don't neccessarily need to get on the Internet at high-speed, get on high-speed which will not only increase revenue for the ISP's, but also for the customer who can now use DSL/T1 access in a much more effective way. Questions? Comments? Suggestions? -- Jonathan -- Jonathan M. Slivko Network Operations Center Invisible Hand Networks, Inc. help@invisiblehand.net 1-866-MERKATO (USA) 1-812-355-5908 (Intl) <http://www.invisiblehand.net>
On Fri, 14 May 2004 17:22:03 EDT, "Jonathan M. Slivko" <jslivko@invisiblehand.net> said:
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who
Questions? Comments? Suggestions?
Who pays for a DDoS attack, or getting flooded by bounces from a spammer's joe-job or A/V companies warning spam when somebody else's box spoofs my e-mail address? If they have a website, who pays how much if it's slashdotted? (Serious question there - I may have budgeted for only several hundred or a thousand hits a day, and if 200K hits costs too much, I may be in trouble...) How do you handle disputes? Who has the burden of proof? Those are all questions I'd be asking as a potential customer.. And the biggie for you is: How do you handle these issues on a low margin? ;)
To answer your question, in our colo evironment, incomming traffic is free and not measured for billing purposes (but I assume this will be different on the ISP platform). As far as being slashdotted, if it does happen - then your agent from our application will watch - and adhere to - the budget that you had initially set and any "Quick Response" settings that you had set, too. Disputes, as far as what? The bandwidth that is purchased is all logged into a database for review/auditing. As for the burden of proof, see my previous statement. -- Jonathan Valdis.Kletnieks@vt.edu wrote:
On Fri, 14 May 2004 17:22:03 EDT, "Jonathan M. Slivko" <jslivko@invisiblehand.net> said:
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who
Questions? Comments? Suggestions?
Who pays for a DDoS attack, or getting flooded by bounces from a spammer's joe-job or A/V companies warning spam when somebody else's box spoofs my e-mail address?
If they have a website, who pays how much if it's slashdotted? (Serious question there - I may have budgeted for only several hundred or a thousand hits a day, and if 200K hits costs too much, I may be in trouble...)
How do you handle disputes? Who has the burden of proof?
Those are all questions I'd be asking as a potential customer..
And the biggie for you is: How do you handle these issues on a low margin? ;)
-- Jonathan M. Slivko Network Operations Center Invisible Hand Networks, Inc. help@invisiblehand.net 1-866-MERKATO (USA) 1-812-355-5908 (Intl) <http://www.invisiblehand.net>
In an application where you pay-as-you-go with hard limits, the site stops responding under the slashdotted activity. The limit protects the ISP and the customer from a dispute, and the customer decides whether to rethink their hard limits or the popularity of their content. DJ Jonathan M. Slivko wrote:
To answer your question, in our colo evironment, incomming traffic is free and not measured for billing purposes (but I assume this will be different on the ISP platform).
As far as being slashdotted, if it does happen - then your agent from our application will watch - and adhere to - the budget that you had initially set and any "Quick Response" settings that you had set, too.
Disputes, as far as what? The bandwidth that is purchased is all logged into a database for review/auditing. As for the burden of proof, see my previous statement.
-- Jonathan
Valdis.Kletnieks@vt.edu wrote:
On Fri, 14 May 2004 17:22:03 EDT, "Jonathan M. Slivko" <jslivko@invisiblehand.net> said:
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who
Questions? Comments? Suggestions?
Who pays for a DDoS attack, or getting flooded by bounces from a spammer's joe-job or A/V companies warning spam when somebody else's box spoofs my e-mail address?
If they have a website, who pays how much if it's slashdotted? (Serious question there - I may have budgeted for only several hundred or a thousand hits a day, and if 200K hits costs too much, I may be in trouble...)
How do you handle disputes? Who has the burden of proof?
Those are all questions I'd be asking as a potential customer..
And the biggie for you is: How do you handle these issues on a low margin? ;)
Agreed. -- Jonathan Deepak Jain wrote:
In an application where you pay-as-you-go with hard limits, the site stops responding under the slashdotted activity. The limit protects the ISP and the customer from a dispute, and the customer decides whether to rethink their hard limits or the popularity of their content.
DJ
Jonathan M. Slivko wrote:
To answer your question, in our colo evironment, incomming traffic is free and not measured for billing purposes (but I assume this will be different on the ISP platform).
As far as being slashdotted, if it does happen - then your agent from our application will watch - and adhere to - the budget that you had initially set and any "Quick Response" settings that you had set, too.
Disputes, as far as what? The bandwidth that is purchased is all logged into a database for review/auditing. As for the burden of proof, see my previous statement.
-- Jonathan
Valdis.Kletnieks@vt.edu wrote:
On Fri, 14 May 2004 17:22:03 EDT, "Jonathan M. Slivko" <jslivko@invisiblehand.net> said:
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who
Questions? Comments? Suggestions?
Who pays for a DDoS attack, or getting flooded by bounces from a spammer's joe-job or A/V companies warning spam when somebody else's box spoofs my e-mail address?
If they have a website, who pays how much if it's slashdotted? (Serious question there - I may have budgeted for only several hundred or a thousand hits a day, and if 200K hits costs too much, I may be in trouble...)
How do you handle disputes? Who has the burden of proof?
Those are all questions I'd be asking as a potential customer..
And the biggie for you is: How do you handle these issues on a low margin? ;)
-- Jonathan M. Slivko Network Operations Center Invisible Hand Networks, Inc. help@invisiblehand.net 1-866-MERKATO (USA) 1-812-355-5908 (Intl) <http://www.invisiblehand.net>
Woops.... Almost forgot to answer the most important question:
And the biggie for you is: How do you handle these issues on a low margin? ;)
Well, to answer that question, it really doesn't take that much work for us, as we would only be licensing our technology to the ISP, we wouldn't be the end-users ISP, only a mechanism for doing this mode of billing/access methodology. -- Jonathan M. Slivko Network Operations Center Invisible Hand Networks, Inc. help@invisiblehand.net 1-866-MERKATO (USA) 1-812-355-5908 (Intl) <http://www.invisiblehand.net>
Previously, Valdis.Kletnieks@vt.edu (Valdis.Kletnieks@vt.edu) wrote:
On Fri, 14 May 2004 17:22:03 EDT, "Jonathan M. Slivko" <jslivko@invisiblehand.net> said:
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who
Who pays for a DDoS attack, or getting flooded by bounces from a spammer's joe-job or A/V companies warning spam when somebody else's box spoofs my e-mail address?
A former employer of mine does something similar to this with a metro-ethernet product they provide. Customers are dropped a FastEthernet port and pay a monthly fee based on their byte count. All of these customers are served off of a wireless point-to-point microwave network that supported, at most, 150Mbits/sec. This isn't generally a problem as the peak traffic on the ring was normally no more than 20 or 30 Mbits, and much more likely to be about 6Mbits otherwise. So, who pays when a new Microsoft SQL server worm comes out, and many of those ports start pumping out 100Mbits of traffic on a Saturday morning? Also, how many people do you have to call in around the country to start physically unplugging customer ports to enable your operations staff to access devices and construct access lists? I'm not personally fond of business models where capacity planning requires the use of a crystal ball, or a rabbit, a hat, and a wooden stick. -doug
-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 On 2004-05-14, at 23.34, Valdis.Kletnieks@vt.edu wrote:
On Fri, 14 May 2004 17:22:03 EDT, "Jonathan M. Slivko" <jslivko@invisiblehand.net> said:
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who
Questions? Comments? Suggestions?
Who pays for a DDoS attack, or getting flooded by bounces from a spammer's joe-job or A/V companies warning spam when somebody else's box spoofs my e-mail address?
If they have a website, who pays how much if it's slashdotted? (Serious question there - I may have budgeted for only several hundred or a thousand hits a day, and if 200K hits costs too much, I may be in trouble...)
How do you handle disputes? Who has the burden of proof?
Those are all questions I'd be asking as a potential customer..
And the biggie for you is: How do you handle these issues on a low margin? ;)
Back in the days, before DDOS and massive spamming, I worked for an ISP where we used this. Actually we used a much more elaborate scheme with different tariffs based on source / destination. It actually worked well enough to get quite a good uptake. Especially for users that had a lot of national / local traffic (which was cheaper to produce and cheaper for the user). Worth noting is that we where transit free. I used to think this was the billing model of the future, however I changed my mind. Not because of any of the reasons you state, but because of this just being another version of bandwidth payment. For the problem with all similar technologies, QoS, dial-on-demand lambdas etc is that the original builder/producer of the service needs to depreciate/pay even when you don't use the service, which is either reflected in the price or in the SLAs. Neither of which seems as a very good business model. - - kurtis - -----BEGIN PGP SIGNATURE----- Version: PGP 8.0.3 iQA/AwUBQKidR6arNKXTPFCVEQJe1gCeJbuCu2dWmUqIPyieWXmy9GXE1dcAoMNK Hqh6SjNyvrXKBghHAlRJvupw =5QCx -----END PGP SIGNATURE-----
On Fri, 14 May 2004, Jonathan M. Slivko wrote: > I was just thinking about this - tell me if it sounds reasonable? Okay, so basically, I'm in complete sympathy with you, because I would _like_ the overhead cost of an unutilized local loop to be zero. Unfortunately, that's not the case in the not-entirely-ideal world in which we live. Also, the idea you're bringing back from the many-times-dead lies in the shadow of the invisible hand of Enron. Which is unfortunate, since at heart, it's a good idea. -Bill
Bill - I'm not saying dedicate a whole T1 to a single customer, i'm saying share a T1 or T3 among many customers in a small geographic area, but let each customer have fair use of the T1/T3. BTW, we have been doing this for the last 6 years in a colo environment and more recently a residential/corporate building with about 300 units (50 of which are lit by us) with a single T1. As far as the local loop cost being zero, I *know* that that is not feasible, but what is feasible is to make a fixed cost aside from the bandwidth of say $30-$50 per customer per month to cover the cost of e-mail service, support, etc. -- Jonathan Bill Woodcock wrote:
On Fri, 14 May 2004, Jonathan M. Slivko wrote: > I was just thinking about this - tell me if it sounds reasonable?
Okay, so basically, I'm in complete sympathy with you, because I would _like_ the overhead cost of an unutilized local loop to be zero. Unfortunately, that's not the case in the not-entirely-ideal world in which we live.
Also, the idea you're bringing back from the many-times-dead lies in the shadow of the invisible hand of Enron. Which is unfortunate, since at heart, it's a good idea.
-Bill
-- Jonathan M. Slivko Network Operations Center Invisible Hand Networks, Inc. help@invisiblehand.net 1-866-MERKATO (USA) 1-812-355-5908 (Intl) <http://www.invisiblehand.net>
At 06:19 PM 5/14/2004, Jonathan M. Slivko wrote:
Bill - I'm not saying dedicate a whole T1 to a single customer, i'm saying share a T1 or T3 among many customers in a small geographic area, but let each customer have fair use of the T1/T3.
BTW, we have been doing this for the last 6 years in a colo environment and more recently a residential/corporate building with about 300 units (50 of which are lit by us) with a single T1.
As far as the local loop cost being zero, I *know* that that is not feasible, but what is feasible is to make a fixed cost aside from the bandwidth of say $30-$50 per customer per month to cover the cost of e-mail service, support, etc.
What's your cost on managing the bandwidth? You're basically creating on-demand frame circuits, and balancing them is tricky (actually, deciding on an oversubscription ratio is easy, dealing with the customers is the tricky part!) on a low-margin basis. Of course, if you're a BofH or a sales guy, I expect that to be less bothersome than if you're a techie who has to actually talk to the customer when their neighbor takes up their bandwidth. Sometimes I wish I could be a bit more slimey to make paying the bills less painful *sigh* Something I'd be more interested in for personal use would be protected the usefulness of my site, as well as the cost of it, against a slashdotting. If I get slashdotted on the first of the month, I essentially pay the same as if my site gets slashdotted on the 30th. The difference is in 29 days of downtime. And no, I don't have a solution to offer for that one, but that's what always annoys me - to see a site get slashdotted at the beginning of the month, knowing my attention span won't last until next month :) Rob Nelson ronelson@vt.edu
Rob,
What's your cost on managing the bandwidth? You're basically creating on-demand frame circuits, and balancing them is tricky (actually, deciding on an oversubscription ratio is easy, dealing with the customers is the tricky part!) on a low-margin basis. Of course, if you're a BofH or a sales guy, I expect that to be less bothersome than if you're a techie who has to actually talk to the customer when their neighbor takes up their bandwidth. Sometimes I wish I could be a bit more slimey to make paying the bills less painful *sigh*
Actually, our model doesn't allow for oversubscription as it's a committed (meaning you have the bandwidth that you purchased guaranteed to you), dynamic rate. -- Jonathan M. Slivko Network Operations Center Invisible Hand Networks, Inc. help@invisiblehand.net 1-866-MERKATO (USA) 1-812-355-5908 (Intl) <http://www.invisiblehand.net>
* jslivko@invisiblehand.net (Jonathan M. Slivko) [Sat 15 May 2004, 01:27 CEST]:
Actually, our model doesn't allow for oversubscription as it's a committed (meaning you have the bandwidth that you purchased guaranteed to you), dynamic rate.
Ah, falling into the same trap MAE-East-ATM (and -West-) did. -- Niels. -- Today's subliminal thought is:
Actually, our model doesn't allow for oversubscription as it's a committed (meaning you have the bandwidth that you purchased guaranteed to you), dynamic rate.
That would be impressive, in the residential market. BellSouth is rolling out their 2Meg DSL here and TWCable already supports 3 meg on their residential cable, 4 meg on Commercial accounts. I'd be interested in how you'd compete with them AND not have to oversubscribe. Rob Nelson ronelson@vt.edu
Thus spake "Jonathan M. Slivko" <jslivko@invisiblehand.net>
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who don't neccessarily need to get on the Internet at high-speed, get on high-speed which will not only increase revenue for the ISP's, but also for the customer who can now use DSL/T1 access in a much more effective way.
Questions? Comments? Suggestions?
One major disadvantage of usage-based billing is that your revenue is unpredictable. With flat-rate service, possibly tiered, you know ahead of time how much revenue you'll bring in that month and therefore can budget more effectively (and deliver consistent returns to shareholders). Another factor is that usage-based billing tends to attract people who use less than average and repel people who use more than average, at least when your competitors offer flat-rate billing. Depending on how you build your pricing model, this can hurt a lot more than you'd expect. One can take an important lesson from the telcos... When the incremental cost of usage was high compared to their fixed costs, usage-based billing made sense. However, today incremental costs are negligible but fixed costs are high, so logically the telcos are migrating to extracting a fixed income (to cover their fixed costs) and little if any usage charges for the typical consumer. I'm curious where others think we are on that progression, or if it even applies to ISPs. S Stephen Sprunk "Stupid people surround themselves with smart CCIE #3723 people. Smart people surround themselves with K5SSS smart people who disagree with them." --Aaron Sorkin
Thus spake "Jonathan M. Slivko" <jslivko@invisiblehand.net>
Personally, I would like to see a senario where everyone just pays for what they use - it would be a much better system for allowing people who don't neccessarily need to get on the Internet at high-speed, get on high-speed which will not only increase revenue for the ISP's, but also for the customer who can now use DSL/T1 access in a much more effective way.
Questions? Comments? Suggestions?
One major disadvantage of usage-based billing is that your revenue is unpredictable. With flat-rate service, possibly tiered, you know ahead of time how much revenue you'll bring in that month and therefore can budget more effectively (and deliver consistent returns to shareholders). Another factor is that usage-based billing tends to attract people who use less than average and repel people who use more than average, at least when your competitors offer flat-rate billing. Depending on how you build your pricing model, this can hurt a lot more than you'd expect. One can take an important lesson from the telcos... When the incremental cost of usage was high compared to their fixed costs, usage-based billing made sense. However, today incremental costs are negligible but fixed costs are high, so logically the telcos are migrating to extracting a fixed income (to cover their fixed costs) and little if any usage charges for the typical consumer. I'm curious where others think we are on that progression, or if it even applies to ISPs. S Stephen Sprunk "Stupid people surround themselves with smart CCIE #3723 people. Smart people surround themselves with K5SSS smart people who disagree with them." --Aaron Sorkin
On Mon, 17 May 2004, Stephen Sprunk wrote:
One can take an important lesson from the telcos... When the incremental cost of usage was high compared to their fixed costs, usage-based billing made sense. However, today incremental costs are negligible but fixed costs are high, so logically the telcos are migrating to extracting a fixed income (to cover their fixed costs) and little if any usage charges for the typical consumer. I'm curious where others think we are on that progression, or if it even applies to ISPs.
What should be used is a fairly high fixed cost and then a low per-usage cost on top of that. Preferably a quite sizable chunk of usage should be included in the initial fee. What you want to accomplish is to make 80-90% of your users only pay the flat fee, then the 10% that uses 70% of your traffic (usually ends up to that 10% of the users use 50-90% of the traffic) you either want to pay more or scare away. Ideal is to make this a token system so that you include a certain amount of traffic and if the customer goes above this, you lower the access speed. You then offer the customer to pay a certain price to get another chunk of traffic at the high speed, or stay at the low speed and continue downloading. With the above model you can offer a very high access speed to everybody, and only penalise the people who actually take advantage of the access speed, rather than to penalise everybody with low access speed. This gives the low-usage people a quick and nice service at a low price. One might also incur a spatial component in this, to make it free to download during the low-usage nighttime, and incur a higher fee during peak hours. For instance, with ADSL there is no benefit to limit people to 512k, the technical cost at the same actual usage is the same for 512k access speed and for full auto 8M speed. The only difference with 8M is when people actually take advantage of it and download more than your business model was calculated for. People want to be able to control their cost, limiting speed when hitting the high-water mark and then making the customer pay a token puts the customer in complete control of the costs. -- Mikael Abrahamsson email: swmike@swm.pp.se
participants (10)
-
Bill Woodcock -
Deepak Jain -
Doug Dever -
Jonathan M. Slivko -
Kurt Erik Lindqvist -
Mikael Abrahamsson -
Niels Bakker -
Rob Nelson -
Stephen Sprunk -
Valdis.Kletnieks＠vt.edu