> I stand by my previous assertion. Charge-per-byte has never been a viable ISP
> price structure, is not now viable, and never will be viable.
Please tell that to all the ISP providers in New Zealand. Everyone here is
charged on a volume basis for IP packets travelling over our international
link. I know of only one service provider who is absorbing this cost and not
passing it on to the user and that is a City Council run CityNet scheme.
> There are two reasons for this, either sufficient to kill it. (1) The
> accounting overhead is so high, in resources and complexity, that it's a net
> loss to try,
Not if the accounting is automated and built in at the kernel level.
Virtually all systems here in NZ work their charging system this way. They have
a fixed charge/volume rate they get done for (with some variations for time of
day that usually are not passed on to the end customer.) and this is calculated
automatically from history files and charged on to the end user. Usually with a
profit margin added. (Some service providers are hobbists and don't charge a
profit.)
> and (2) anyone who attempts charge-by-byte pricing will have his lunch eaten
> by ISPs with connect-time-based pricing structures (and this is so
> predictable to anyone with the slightest grasp of economics or marketing that
> no one will ever make the experiment unless they're something like a European
> postal-telecomms monopoly that can lock out private-sector competitors).
In New Zealand we currently have one service provider who does a connect
time based charge, IBM. Their service, due to various details I won't bore you
with, is only efficient if you have your modem running flat tack the entire
time you are connected. For more normal service users it is more cost effective
to use charge by volume providers.
Indeed one local service provider here mooted the idea of changing to charge
by time to it's users, the proposal was rejected quite strongly.
> In fact, I make the following much stronger prediction. Connect-time pricing
> will be displaced by monthly-flat-rate pricing as soon as the cable companies
> get seriously into the ISP business. Sometime between eighteen months to
> three years from now, `retail' ISPs will find that they must either go flat-
> rate, at monthly rates comparable to present local phone or cable service,
> or else go bust.
Have phone companies gone to allowing unlimited toll calls for a flat
monthly fee yet? Nope. Indeed in New Zealand we have a situation analagous to
the phone companies with our networks. There are small 'subnets' that have free
access to all sites within that subnet, in my region this covers the Wellington
area to a varying degree, but access outside that region is charged for on a
volume basis.
There is no 'flat rate' fee option we can source for IP traffic outside this
region. The closest we come is a by time charged service that is useful only to
major data shifters. And, due to the size of the link provided, likely to be
delivering less than optimal fee performance due to heavy demand on it.
All of your predictions rely on the base cost of IP traffic being low enough
that a flat rate can be charged that covers the average cost that a user can
run up. Given that most IP users currently in NZ are fairly experienced hands
at paying for every byte we retreive such a service is likely to be loaded very
heavily by people siphoning as much data as possible trough it to get their
money's worth from the system.
Naturally this condition is likely to ease as the system grows in size but
the initial start up period simply will be unlikely to be commercially viable.
You are likely to end up either absorbing losses for several months in the hope
that you attract users that you actually make sufficient profit off to offset
the loads the heavy users are making, or you raise your charges sufficiently
high to cover the worst case possible IP cost that the user can rack up. (IBM's
service has followed this route.)
This is likely to price such a service out of the market. Especially when
the average user in NZ is quite content with paying a lower monthly fee and
only paying for those bytes they actually receive.
Your arguements rely on a) their being effectively unlimited networking
resources available to satisfy the customers demands (to prevent users becoming
dis-satisfied with the flat rate fee they are being charged.) & b) a large user
base to spread the load over and make the average cost drop to managable
levels. I don't see this happening in a hurry inside New Zealand.
> Free markets. Ya gotta love 'em.
Oh please. Your rhetoric is irksome.
Philip
--
Philip R. Banks Syntax: mail < banks_p@kosmos.wcc.govt.nz > @@@@@/|
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Coming soon to a theatre near you.... @@@/##|
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Star Trek X : The Search for more Forests to make Captain's Logs. @/ |
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