[ppml] [narten at us.ibm.com: PI addressing in IPv6 advances in ARIN]

[Peter Sherbin]

> I'm not sure why ... ISPs would give
> up the current Internet settlement regime and move
> back to a pre-1994 telephony settlement regime.

They have no choice. Until recently good old wireline voice has subsidized the
Internet (this is why btw only telcos have survived 2002 meltdown). As wireline goes
away there is no other alternative as to make the Internet profitable. And the
proper way to do it is via settlements. Every independent network reasonably expects
to collect from traversing traffic.

> Back then, telephone companies counted every penny
> of every single point-to-point 

They counted minutes not pennies. For telco a minute is a basic cost driver that
suits very well for cost models, billing, pricing, settlements etc. The Internet
equivalent of the minute is one bit. Any prudent ISP would want to count every bit
for each customer for proper billing, settlements, etc.

> On today's Internet, settlements are all bilateral.

Backbone Tier ISPs at the top get the benefit from the rest of the pyramid.
Convenient but imbalanced model.

> nothing to indicate that this will drive them to 
> packet counting or any kind of large scale deployment
> of IP accounting.

Say that to a currency trader counting every 1/100 of a percentage point. Or to a
Power Generator charging for every watt. Whoever plays the Internet has to count
bits. An alternative would be going bust.

Cheers,
Peter

--- Michael.Dillon at btradianz.com wrote:

> > (I'm not smart enough to figure out how the geotopo approach would 
> > work without causing a return to the equivalent of the pre-1994 
> > international telephony settlements regime, but that's my own lack of 
> > imagination I suspect).
> 
> I'm not sure why you think that ISPs would give
> up the current Internet settlement regime and move
> back to a pre-1994 telephony settlement regime.
> 
> Back then, telephone companies counted every penny
> of every single point-to-point flow that went across
> their boundaries. Then they compared lists, counted
> the totals and one party paid the difference to the
> other party.
> 
> On today's Internet, settlements are all bilateral.
> The two parties estimate the traffic balance between
> them without actually accounting for every penny of
> cost. Doing it this way, they both save the substantial
> costs of counting pennies. Then, if the both agree
> that they are more or less in balance, they peer 
> with each other at no charge. Again, the cost savings
> of not counting every packet, offsets the minor
> fluctuations in traffic between the two companies.
> However, if they estimate that there will be a traffic
> imbalance between the two parties, then they agree 
> on a fee to be paid for this imbalance. This is called
> paid peering. 
> 
> The current settlements regime has evolved over many
> years of operational and business experience. It is
> unlikely to change substantially when geo-topo traffic
> is introduced into the scheme. Of course, peers will
> have to incorporate geo-topo traffic into their agreements
> and into their engineering planning, but there is 
> nothing to indicate that this will drive them to 
> packet counting or any kind of large scale deployment
> of IP accounting.
> 
> --Michael Dillon
> 
> 
> _______________________________________________
> PPML mailing list
> PPML at arin.net
> http://lists.arin.net/mailman/listinfo/ppml
> 


__________________________________________________
Do You Yahoo!?
Tired of spam?  Yahoo! Mail has the best spam protection around 
http://mail.yahoo.com