RE: MFS WorldCom/WilTel/LDDS

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... :wink: