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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 big 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 customers based on the bits received, or time connected, perhaps it becomes more even.

Or, let's say A finds artificial ways to send more traffic to B to balance it out so they get charged less. Hmmm... I don't see any way changing the charging model addresses that.

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, Sure he can... He just has to change the traffic ratio.

that is not happening. So, charge the content provider for outbound *and* inbound traffic. This can and should be subsidized by advertisers, as the more 'hits' that 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 another advertiser or someone else to pay...) For the dialup user, charge him a lower fixed 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!

I don't think that good content should have to succumb to advertising littering it's pages in order to support itself. I don't think that ftp.cs.berkeley.edu should have to install ADs in the readme files so that you see an ad everytime you go to download sendmail, as an example. Get real.

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 in 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 a 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 sure 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?)

No you don't, you just need something inside one of the prefixes advertised to you. In fact, it's easier to generate what you want to a host that doesn't respond. No need to worry about the responses counteracting your intent. I'm not sure how you would distinguish fraudulent traffic to enforce such a provision. Afterall, it could look like a port scanner, or any number of other things. Another question that evolves is how you measure this at the MAEs.

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. Thus, there will most likely have to be, at a minimum, an Independent Peering Council, or at worst, government regulation, to make this happen. :-(

The worst would be if this did happen. The proposal has _WAY_ too many holes and sounds like exactly the kind of proposal that is why we all dread regulation so much.

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 Peering." Any original ideas I see on nanog (or com-priv, where this discussion really should be) will be quoted as such!

Fair enough.

Sean ___________________________________ 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: sebutler@us.ibm.com

Owen