From: Sean Donelan[SMTP:SEAN@SDG.DRA.COM] Sent: Monday, September 02, 1996 3:22 PM

A current problem Internet is line capacity only comes in a few different sizes; small (DS0), medium (T1), large(T3), and extra-large (OC3c). One reason ISDN is extremely popular is its just a bit bigger than a DS0, and a lot less than a T1. Because the next step is so large, customers tend to stay with their current size long after it stops fitting their needs.

It's possible to provision ATM circuits at pretty much any capacity a customer wants, from 1Mbps to 155Mbps, without having to swap-out hardware in order to bump up the speed. Of course this also makes new services available which would otherwise be impossible to manage (single event bandwidth increases, anyone?)

So-called "usage-based" pricing is just a klunky work around to the too big a step between sizes problem. Customers want something just a bit bigger than a T1, but don't want something 28 times bigger. Usage-based pricing lets customers use something just a bit bigger even though the provider uses a massive pipe to deliver it.

This is frequently true, although there are specific situations where usage based pricing is attractive for its own sake, for instance as backup for a fixed price circuit.

I suspect when Cisco's 11.2 traffic-shaping hits the streets, you will be able to buy more "fixed-rate" Internet connections at the in-between line-speeds providers previously only offered on usage-based pricing plans. Sure, some providers may resist initially. But someone will break ranks, and the others will eventually follow.

Those ranks have already broken, at least in territories we serve, and there was no need to wait for new software... ;-) -- Jim Browning <jfbb@atmnet.net> P.S. Will it help avoid the IP <==> ATM religious battle I may have just started if I lie and say I am unsubscribing for the next week or so?