Transaction Based Settlements Encourage Waste (was Re: BBN/GTEI)

Applying the current model of the telco transaction based settlement to the
current end-user pricing model of the Internet is broken. There is a major
disconnect between the two.

When a standard telephone call is made one or the other end-user supplies
revenue to the company/organization which supplies thier local service.
Whereas in the Internet today, both sides pay for the privelege of having a
full time open (or long-term part time open) connection to the network.
These Internet end-users do not look anything like telephone end-users.
Any attempt to apply the current telco model to the Internet model without
significant rewriting of one or both will most likely be a taxation upon
anyones sanity.

There is another disconnect within the Internet that should (if it isn't
already) be driving stong change that would most likely invalidate any hack
that is developed on the current model. Whereas the cost of delivering
packets outside of a small geographical area (call it the "Zero-mile" area)
is based upon milage and bandwidth used. Currently in the US most
bandwidth is sold at a flat price per Mbit. Whether or not it's billed
upon usage or billed upon some predetermined level that the user cannot
exceed. This constitues another disconnect between base cost of goods and
revenues of sales. As the industry grows more mature, these need to be
tied together, otherwise in the end, the end-user will be gouged in one
manner or another, and the disconnect of COGS versus Revenues tends to lead
toward artificial operating costs.


As much the "how to count bits" thread is entertaining,
the reason why nobody's doing any path-based accounting
in packet networks is quite trivial:

It is not technically feasible.

In other words, the computing resources necessary to perform
such accounting (and to retain the accounting information for
subsequent billing) by far exceed resources necessary to
perform the actual service - transportation of the packets.
Which squarely puts it beyond the reach of today's technology.

Until someone comes up with a feasible way to do such accounting,
the whole point of discussing the best economical model based
on such detailed accounting is moot.


What about netflow ?

Vadim Antonov wrote:

Richard Irving wrote:

What about netflow ?

Vadim Antonov wrote:
> It is not technically feasible.

You can do traffic analysis based on statistical sampling.
Good luck doing _billing_ based on statistics.

In any case, nobody was able to connect backbone flow
traces for any significant amount of time. A typical
Internet load on OC-3 would produce about 7000 fps, or
500 mil flows per day. Now, crunching that data to
generate bills is going to be fun.

I'm not saying this is impossible, but the infrastructure
for doing so is going to cost at least an order of magnitude
more than the non-accounting backbone.