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Re: 95th Percentile != Lame

  • From: James Thomason
  • Date: Sun Jun 03 22:33:58 2001

On Sun, 3 Jun 2001, Greg A. Woods wrote:

> You are mistaken!  :-)
> The true benefit of Nth percentile billing is that it allows the
> provider to sell low-cost, very high-speed, ports and only charge the
> customer for the true costs (plus profit) that customer incurs.
> For example it allows the ISP to sell a 100baseTX connection to a
> customer who only really needs about 128kbps or less, but who happens to
> be in the next rack/cage/room/etc. from your network.
> From the customer's point of view it not only dereases the cost of the
> "local loop", but it also gives them some of the benefits of more
> advanced delivery systems such as frame relay or ATM.  I.e. even if all
> you ever move on average is 128kbps of traffic you've still got the
> potential of bursting a small amount of data through at full wire speed.
> Even more importantly if your ISP is also paying on the Nth percentile
> rate then you're pretty much stuck with either paying through the nose
> for available bandwidth (in which case you'd better either have very
> deep pockets, or really need what you buy), or also paying on the Nth
> percentile.

I still fail to see how "peak bits" or "bursted bits" are more expensive
than "regular bits".  A 100Mbit FE port costs whatever it costs, and does
not fluctuate with usage.  This is true of almost all of your links within
the network - excluding those where you have negotiated usage-based
billing.  An OC3, point to point, costs as much as it costs irrelevant of
its usage.  Therefore, every bit that crosses this circuit has a cost. 

Why not simply pass this cost on to the customer bit for bit? 

> (of course all your data travels at wire speed -- it's just the gaps
> between the packets that make it appear otherwise!  ;-)
> Yes, of course, and that's the whole point.  The user's got this big fat
> pipe and if they make the mistake of actually using it in any
> "significant" way then they increase the provider's costs and thus have
> to pay "through the nose" for their mistake!  ;-)
> If you don't want to over-pay then don't over-burst!  ;-)

Again, where is this substantiated?  How does this drive up costs for
providers (anyone?) ?

> There's more than one (other?) telecom industry?  :-)
> But there's really nothing immature about doing rate-based billing!
> The telcos have been doing data-comm in this same manner for for maybe
> decades.  I've even heard tell of those who allow their customers to
> adjust the CIR (and automatically get billed for the new rate, of
> course).
> The only thing "immature" about it is the underlying link layers we have
> to deal with in most cases.  If everything were FR or ATM then there'd
> be no problem, right?  ;-)

To reiterate - I did not mean to imply that existing telecommunications
settlement models are mature, by any stretch of the imagination. :) They
are however, a bit more mature than existing Internet settlment models. 

Again, its not as if when traffic levels rise, more monkeys are required
to shovel coal into the engine.  The equipment and circuits all have fixed
delivery levels, and (roughly) fixed costs.

What is immature is the non-approximate, non-quantified cost of bits on a
per provider and per-customer basis, coupled with the ASSUMED equal-cost
exchange of bits between carriers. Which I should add is
completely ludicrous.  It costs ATT a quite different amount to haul bits
around than GBLX - why not settle those costs like other adults? 

> If I'm not mistaken the concept of rate-based billing originated with
> electricity suppliers (who, it seems from stories I've heard, couldn't
> figure out how to do it properly either!).

Did it!?  No wonder they are f**ked up. :)))


> -- 
> 							Greg A. Woods
> +1 416 218-0098      VE3TCP      <>     <>
> Planix, Inc. <>;   Secrets of the Weird <>

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