User chargeback issues


Rex Buddenberg (BUDDENBERGRA@A.ISI.EDU)
14 Sep 1987 19:49:35 EDT


The subject of user chargeback has some economic overtones that may
tend to be overlooked if we don't bring them up. Since we are in
this business, on this net for 1) improving national security, 2)
propagating networks to make money or 3) both, it is
appropriate to look beyond the technical issues.

Most communications facilities: Autodin, Autovon, FTS, are provided
to the user at no perceived cost -- the 'user' charges are generally
paid for at the headquarters level. At the unit level, they appear
as 'free goods'. In the past, decentralizing of user charges was
either not possible or didn't fit 'the way we've always done it'.
This results in an unconstrained Parkinson's Law effect where usage
expands to fill the capacity available. Take a look at the Navy's
satellite bandwidth, the federal government's phone usage, ...
for examples -- they are two-blocked.

So what happens if we add user chargeback? Communications services
compete for an organization's resources just like any other
requirement. Incentive for rational, balanced budgeting of resources.
OK so far, but there are a couple hidden gotchas.

1. What are we trying to do with DDN? If we want to make a single
large internet to handle all data traffic, a user chargeback, or threat
of one, is a strong inhibition to defer taking the plunge. We have
private nets, continued Autodin usage, ad hoc dial-ups, etc proliferating
because MilNet usage appears more expensive -- to the user. If
we want DDN to proliferate, the user chargeback probably ought to
be subsidized by appropriation to DCA as it is now. The extremes are
a) full subsidization by DCA, like now -- provide network as a free
good in order to gain market share from Autodin et al, b) full user
chargeback making the service user bear full costs. Neither extreme
is good, what we need is a balance somewhere between.

2. User chargebacks encourage skimming. Consider the post office;
Uncle's PO, including the APOs and FPOs, delivers worldwide. I got
mail through the system in the Antarctic and on Iwo Jima. Can't
say that much for Federal Express or UPS. The commercial
competition within CONUS takes the lucrative market and leaves Uncle
with the more expensive portion of the system -- the overseas
requirements. These routes are necessary, and the cost for maintaining
them now goes up because the lucrative routes can't subsidize them
and because we lose economies of scale. The DDN analogues are
the overseas routes and classified service. Both are likely to
remain exempt from the user chargeback scheme, at least at first.
This is likely to result in a lot of users buying commercial network
connectivity for CONUS traffic and DCA being stuck for the
overseas and classified service, which will now become more expensive.

3. The final gotcha is that user chargeback needs to be implemented
in a way that doesn't open the door to traffic analysis.
Even if we don't chargeback to users, the data flow info is useful --
to Ivan as well as the network managers. I've been in law
enforcement long enough to know how valuble telephone tolls are
in tracking a smuggler and his activities -- let's not set ourselves
up.

Rex Buddenberg
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