[In the message entitled "Re: BBN/GTEI" on Aug 21, 16:33, Michael Dillon writes:]

Here's the complex part. The value is not expressed in bits and it depends
on the destination within the peer's network. I am assuming that we can
map the IPv4 address space by city and that we can set some value to each
intercity link. This means that a stream of bits entering a peers network
in San Jose with a final destination in San Jose would be free. But if the
stream of bits was destined for Santa Cruz there would be a small cost.
And if it was destined for Sacramento there would be a somewhat larger
cost because Sacramento is further.

Have you made long distance calls lately in the US?

A call from San Jose to San Francisco costs significantly more than one
to New York. A call to New York costs exactly the same as one to Denver,
or to Seattle. All of which cost 1/4th as much as a 40 mile call to
Gilroy from San Jose, which costs *more* than a 60 mile call from
San Jose to San Francisco. And don't even get me started about
Thousand Oaks.

Unless, of course, you are using your Pacific Bell GSM phone, in which case
it is free. Calling anywhere *else* in the USA (and canada, for that
matter) on the GSM system is $0.15/minute. Unless, of course, you have
a Sprint phone, and are using their 'toll free' option, in which case
it doesn't cost anything, unless you are calling Canada, in which
case it is $0.60/minute.

Down this path lies madness. I hope that the Internet will not go here.

On-net facilities have made distance-sensitive pricing in most metro areas a
thing of the past. Sub $0.04 per DS0-mile long-haul rates have made long
haul circuits very affordable. High speed WDM dark fiber routes will make
long haul very, very cheap in the next 2 years. Trans-atlantic fiber
availability means that STM-1's are now close to the same pricing as cross
USA OC3's today. Asia is still coughing up $1M/month for DS3's, though.

International traffic is a problem, no matter how you cut it.

Simple "distance between points" will not, however, hold water.