ARIN-PPML Message

[ppml] ARIN member in good standing?

On Oct 12, 2006, at 1:31 PM, Peter Sherbin wrote:

>> Or, put another way, I don't understand the problem
>
> The model aims at identifying a fundamental *cost driver*  on the  
> Internet, e.g. a
> certain amount of electrons carrying data from the origination  
> point to its
> destination. Subsequent arrangements will follow naturally shaped  
> by whichever local
> circumstances.

*(emphasis mine)*

Are you suggesting that incremental cost of service delivery should  
the basis for pricing inter-provider network services?
Would that rule also apply to provider-to-end customer pricing?
Should costs define the upper as well as lower limit for pricing?
Who calculates what costs "really" are?

You proposal suggests to me that you don't think the market is taking  
care of at least some elements of this equation now -- i.e., that  
pricing is "irrational" in the economic sense. Could this perception  
be based on the fact that some pricing and "arrangements" are based  
on regional/global rather than locally bounded circumstances?

Put another way, doesn't your proposal entail the elimination of  
bypass and the restoration of closed territorial markets (aka "local  
circumstance sovereignty") that only exchange traffic at the border?  
Do you think that markets like that -- there are still many many  
around the world -- are more rational, and should be emulated?

Forgive my cognitive dissonance, but we got to where we are today  
because globalization (erosion of local market sovereignty) exposed  
places with different prices and cost structures to pressure from the  
prices and cost structures of other places, i.e., "competition." Your  
proposed goal of exposing cost drivers is redundant if local costs  
continue to be subject to extra-local competition, and your proposed  
mechanism for exposing costs would almost certainly devolve into a  
mechanism for eliminating such competition.

Or am I missing some element that might forestall this outcome?

TV