network cost recovery


David Roode (roode@orc.olivetti.com)
Sun, 15 May 88 15:24:18 PDT


There are benefits of usage insensitive cost recovery as applied to
networking, through the need for universal connectivity and the common
immeasurable benefit derived therefrom. This is much as it has
traditionally been recognized in not basing service fees on
incremental cost to provide service for such applications as mailing a
letter or installing a new telephone line (for a rural location vs. a
metrapolitan area).

The recent analogy of garbage dumpster capacity being used as a gauge
for waste removal charges was interesting. So was the observation
that sewage charging is often based on another available metric--fresh
water consumption. In these cases society has a vested interest in
making the billing not directly usage sensitive. Who would want his
neighbors piling up sewage or garbage rather than disposing of it? In
the case of garbage removal, it is probably more common for there to
be a fixed fee per household rather than to let the act of renting a
dumpster invoke a higher fee for the removal. This makes the charge
less usage-based still. Nonetheless, all costs are recovered.

I don't like the loading of network service fees on top of actual
costs of a leased line to effect the feeder connection. It treats as
negligible cases of particular 9600 baud circuits passing more data
than some 56Kb circuits. Why deny light-usage sites rapid throughput
for that usage? Aside from very crude load leveling, it seems
needless.

I submit that innovative funding sources could remove the argument
that fully usage sensitive charging is needed at any level. At the
same time, the main difficulty I see in usage sensitive charging is an
extremely painful transition, for all the reasons that have been
cited. We could get there, but the casualties and setbacks along the
way would be inevitable. Certain non-usage based charging would
evolve anyway, so why not consider an alternative? My claim is that
there is a way to scale the charging schemes of the past to match
the popularity of networks of the present. Such a step is much less
drastic and offers advantages as well as a smoother transition.

I agree with Craig Partridge's idea of charging only at the feeder
connection and not worrying about exactly what passes through that
connection and where it is going. The cost of doing detailed
accounting is considerable, so if we avoid this we have just obtained
one subsidy to network usage. On the other hand, accounting only on
raw usage of a site's feeder connection need not be onerous and offers
benefits over charging based solely on the existence of the feeder
connection. I feel that network charging should not be based only on
feeder circuit size (and maybe not that at all, beyond passing on the
raw costs of providing the feeder circuit itself). Instead consider
the community to be served by that circuit, including its size and its
nature, and the general level of usage of the circuit. This could be
quite managable, and I will propose some necessary elements of a
workable realization of this alternative to all-out bean counting:

    (1) Educational and non-profit sites should get discounts, government
    should pay a little more, and others (e.g. commercial) should pay the
    most of all for a given service. (2) Smaller communities (all kinds)
    should get discounts to encourage their participation. (3) Increasing
    the participation by commercial research organizations which pay their
    own freight and then some will significantly add to the subsidy of
    research networking infrastructure currently paid only by the
    government. This subsidy is not workable if attempted on a
    usage-sensitive basis, i.e. the subsidy has to be a flat one.

    (4) Within a category, a year's fees should be set in advance based on
    the previous year's usage. This provides administrative convenience
    for all concerned. (5) Organizations which offer identifiable service
    to the community at large should be assessed based on an appropriately
    discounted usage level. (6) An estimate would be used for the first
    year of an organization's connection. (7) No bill backs would be used
    for deviations over the period of the fee year. This sort of volume
    pricing has ample precedent in volume purchase agreements commonly in
    use. (8) Organizations which can not afford the new year's rates
    should be given the ability to invoke a throttle, by downgrading link
    size or limiting throughput. The limits should be settable across a
    smooth set of incremental values. (9) In general, organizations will be
    encouraged to find a means to distribute costs, especially since these
    will approximate benefit to the organization in that they are based
    loosely on volume. Furthermore, they will be proportional to the
    organization's ability to pay. They will be designed so as to
    encourage payment out of research overhead, which fully usage-sensitive
    charges are not, and the cost will be known in advance and will be
    controllable.

This scheme can be used by any network that chooses to adopt it.
Interconnections between networks, except in special cases like
the NSFNET backbone, provide mutual benefit to both networks,
and no charges need be levied. Each network pays part of the costs.

A fellow in Australia mentioned increased equity if usage-sensitive
charges were employed in the U.S. since it already is in the case of
the Australia-UUNET link. It's important to note that UUNET is merely
an interface service to the vast UUCP network, which itself has no
central services or central charging scheme of any sort, usage
sensitive or not. It's this which causes the inequity where Australia
pays all the costs of the UUNET link. UUNET has no way to assess
charges on all the USENET users who use the link, and aside from
direct UUNET participants also has no way to recover network overhead
costs. UUCP is a different sort of network backbone than the type of
which we speak in the TCP-IP discussion. Furthermore the Australia
and other international UUCP network connections are special cases
insofar as even UUCP is concerned.

I could envision support for that link from the network
administrations of the many U.S. networks other than the UUCP
network, all of which are TCP-IP based except for BITNET. I am sure
all value mail connectivity with Australia and other nations. There
is a Federation of these networks which would be the right place to
bring up the issue. However, only the costs of the international X.25
connection and not the cost of that part which occurs within a nation
should be borne mutually. The part of the path within a given nation
is reciprocated by that part within the destination nation. I.e.,
when Australia exchanges mail with the U.S. it is currently not billed
for use of a significant distribution network. The U.S. distribution
net is used for all messages between the two countries, originating in
either.



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