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The Internet

Bandwidth as Commodity 105

Posted by CmdrTaco
from the stuff-to-think-about dept.
TwoSticks writes "This NY Times article (CT:required annoying but free registration) and one at Yahoo talk about the Enron corporation working to set up a market for bandwidth, similar to the existing markets for buying and selling gas and electricity, but with transaction times in seconds. They claim this is essential for next generation network management, and I'm inclined to agree. "
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Bandwidth as Commodity

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  • Definately not a new idea. Seattle Internet Exchange [altopia.com] does this very thing.
  • I think you and i agree about the lack of similarity between a natural gas pipeline and Internet bandwidth. My point in making the comparison was to demosntrate that the two are not the same. ENRON is a company whose primary business is moving natural gas in pipelines. Obviously, if they are proposing this "network bandwidth as a commodity" model, it's because *they* think they can "leverage their core business," and apply similar principles to Internet data. (I don't agree)

    For technical reasons, the top-tier ISPs have long been reducing the number of other ISPs with whom they "peer" or exchange data. The complexity of the routing tables were becoming the biggest impediment to timely transmission of packets. At the backbone level, the top-tier ISPs want (and to a large extent have) routing tables that are simple, and cover very large ranges of IP address.

    For example, they want to route all of 204.0.0.0 to one particular destination. What they hate is "top-level" routing of small ranges (like a Class C: 204.2.12.0) to a particular destination. This consolidation has very clearly pushed almost all but the biggest ISPs out of the top-tier.

    Let's look at this from a small regional ISP's point of view: "Joe's ISP." Joe doesn't have the heft to make a peering agreement with each of the top-tier providers, so instead, he signs on with one, like UUNET. UUNET sells Joe some class C or B netblocks for Joe to use or allocate. These are specific IP addresses that are routed on the 'Net at large because of peering agreements that UUNET has established with the other top-tier providers.
    As far as all other top-tier providers care, traffic to Joe is really traffic to UUNET.

    Joe cannot sudddenly decide to buy 1 GB of bandwidth from someone else, because he would then need new IP addresses for all his machines, new Internet DNS entries, a new T-1 connection (at least a month from the local Bell) to another top-tier ISP, etc., to make it all work. Ask any (TCP/IP) network admin what it thinks about changing every IP address in their domain once a quarter and you'll get a very clear answer. (But i'd make sure they weren't holding anything that's going to hurt when they throw it at you.) Changing IP addresses is something that any network admin with a brain in its head *never wants to do.*

    So if Joe is effectively eliminated as a purchaser of this network-bandwidth commodity, the only people who would be in the market for it are the companies that already control the market. WorldComm-UUNET, Sprint, AT&T, C&W and the other top-tier ISPs don't need ENRON to step in and start brokering the data between them. When they get the technical means to charge by the packet, or dynamically route data by the cheapest ($) path, they'll do it *by themselves*.
  • Enron's exploits in Latin America are nearly as bad as ITT or United Fruit.
    Heard on the neds this morning that Enron had the wife of a man who was resisting Enron's incursions dragged out of her house -- naked and 2 months pregnant -- and beaten.

    Oh, and in the NW they NEVER STOP CALLING YOU!
  • Pay per megabit scares me because I (and I'm sure the vast majority of you) use my connection WAY more than your average Joe. While a plan that would offer him the same overall service at 1/2 the price (P-P-MB) would most likely cost me 2-3 times as much. That's scary.
  • by Anonymous Coward
    ATM was made for this type of dynamic bandwidth allocation. There just needs to be a routing protocol that uses a dynamic price (which would come from the traders) as a route selection criteria. It's been awhile since I've done anything ATM, but I believe I-PNNI (PNNI 2.0?) can handle this without the need for an all-new protocol.

    ATM mfr's would do well to support and help develop a bandwidth commodity market.
  • For a long time, I thought that what the web really needed was a Differential-HTTP. This makes particular sense with a site like slashdot. I punch in every few hours, but let's face it: 90% of the page is the same. At most, there's a new blurb or two at the top of the page.

    The existing standard is horribly inefficient from a bandwidth perspective. It makes a lot of sense, though, from a server load perspective. It's usually easier on a machine to serve the same page 10,000 times than it is to serve 10,000 different updates. (Okay, so /. is cool enough to generate dynaic pages, but think of the poor IIS admins :)

    Right now, the web is designed with the assumption that an extra megabyte is free, but an extra CPU cycle isn't [distributed.net], at least, not at the big sites. If you read the HTTP specs, it seems that most of the recent work is designed to shift CPU load from the server to the client.

    Even though end users probably won't see a difference (Let's face it, tracking usage on a modem, or even a 10Mbps DSL line isn't worth the paper and trouble -- this is strictly a game for the serious bandwidth consumers [ncne.org].), we're going to see a sudden shift toward minimizing bandwidth from the standards organizations. This might have a negative impact on the hardware budgets of the larger web sites.
  • by Anonymous Coward
    No, you can't buy a T1 "just like that". But they are not talking about buying a T1, they are talking about buying bandwidth. ie, a T1 of bandwidth over someone else's backbone.

    It's a network management problem; not a provisioning one.
  • Here in Europe, where the telecom companies have been largely unchallenged (the introduction of competition is pretty much a farce) and unregulated, and we have the high metered local phone calls, they are already introducing prices per megabyte transferred on the new DSL and Cable modem services so as not to make them a cheap option to metered modems and isdn. The prices are ridiculous (try 5.5 cents per megabyte on a 2 mb/s line), but have to be so that they won't cost less much less than the phone call for joe-smoe-surfer-the-web.

    hey, its not _that_ bad everywhere in europe. telederegulation is coming along quite well in sweden imho. and as for prices... i'm getting my cable access any day now, and for that i'll pay abaout 44 euro (which is about... $44) per month for .5-10 Mbps. flat rate.
  • by Paradox !-) (51314) on Monday May 24, 1999 @10:55AM (#1880779) Homepage
    Data Communications ran a really good, comprehensive article [data.com] on this in this month's issue. It talks about the competitors in this market, strengths and weaknesses, and issues like fraud. I think Enron's PR department is just doing a better job than those of folks like arbinet, which is why they get credit for 'proposing' an idea that's already been implemented by at leat seven companies.
    FYI, the article at Data.com says you can get a T1 from NY to LA for between $3900 and $4800 through the brokers, compared to three times that from major carriers.
    Data Comm...gude sctuff.
  • Because it's guaranteed service. If they're going to reserve an entire T1 for you that noone else can use, why should you only pay for a small portion of that? It's more like going to a restaurant and buying dinner. You're charged for what you order, not what you actually eat, because the restaurant can't give the leftovers to anyone else.
  • There are already lots of competitors in the bandwidth market. You can get uninterrupted gigabit bandwidth across the US for a few thousand dollars. This is used for video operations.
  • by Anonymous Coward
    Ok, this sounds like a drug deal to me... "Sure, here you go, it's great, unlimited access, do all you want..." Then they get you hooked, then they start charging.

    As someone who spends a minimum of 6 hours a day on the net, I have to say, the Internet in general, and the "web" (http) espically, is a huge waste of time. I frequently spend hours on the net looking for one key piece of information, trying not to be overwelmed in the sea of trash.

    Search engines suck, and there is no other way to say it. If I had to pay per unit of transfer, 99% of the time I would be wanting to ask for my money back from the people who run the search engines.

    Don't get me wrong, that 1% of the time I spend that I actually do actually find the information I am looking for, it makes it all worthwhile. But if I had to pay for the 99% of the trash I have to see first, the Internet wouldn't be worth my time or money.

    If anything, if this becomes reality, it should fuel the people who try to write efficent search engines. That would be much more critical if time/bandwidth was all comming at a price.

  • I believe about a year or so ago there was some stock people trying to make RAM memory a commody that was openly traded. That too failed because it isn't as generic as one thought. This will probably do be the same. I mean cellular companies can't do this with airtime (i.e. share with other companies so they can charge a flat rate anywhere), why would something even more complex fly?
  • Whoa! Easy there.

    Anonimous Coward posts start at 0. Registered user posts start at 1. If an AC post is at 0, it might not have been moderated up yet. The moderators only have a few points to spend, so even if one of them sees the article, they might not be impressed enough to give it a point.

    Your post, on the other hand, was moderated down by someone, probably for flaming.
  • we still have the problem with the path. If I have a connection from San Jose to Reno, it's not relevant to Atlanta to Charleston traffic. However, if I have electricty in San Jose, I can feed it to the grid, allowing more to be drawn off in Charleston.

    We can still define it as a commodity, but it's a much "tighter" definition than we'd like to use.

    Gas is nice & loose: 1000 cubic feet by friday. It can be stored if necessary

    Electricty gets tighter; while gas at 2pm and 3pm are close to fungible (interchangable & indistinguishable), electricty at 2pm friday and 3pm friday are distinct products. Still, since there's a huge grid to work with, and we can push the electricty back and forth, the market can work.

    But bandwidth is an issue of San Jose to Reno at 2pm. While there are limits on how much each path can carry for electricity, the power itself is the dominant factor. But with bandwidth, it's that ability to carry that's the issue. I could route traffic from San Jose to Atlanta to Charleston and back to Reno, but it's hard for that connection to compete with a direct one.
  • For interactive sites, I admit that caching has limited value. For things like The NY Times, which is only updated a few times a day, it could be very useful. For site like the W3C, which maybe are only updated once a week, it would be immensely useful.

    Some sort of intelligent diff system could even reduce the amount of data that the cache servers download.
  • Why shouldn't bandwidth costs be paid per bytes transferred? It seems pretty logical to me - bandwidth is the quantity that is scarce (assuming you are already connected somehow), it costs more money to provide more bandwidth, therefore those who require more bandwidth should pay more for it. If you spread the costs of X user's bandwidth across X bills, I may end up subsidizing someone elses IP telephone (or some other high-bandwidth app), when all I want to do is run lynx (or some other low-bandwidth app). Granted, the charge per a unit of bandwidth would have to be fairly low and there will be the hassle of billing, but these things haven't stopped the long-distance companies, have they?

  • This will actually be a Good Thing(TM). The natural gas markets are designed to promote efficient use of the gas pipelines between markets, combined with an open market where consumers get to choose who they buy gas from, this leads to lower prices for consumers.

    Just like you don't have to call the power company or gas company because a winter storm is coming and you will use more gas than normal, you won't have to call your ISP and order more bandwidth.

    However, national network providers will be able to make more efficient use of their bandwidth by buying or selling from their competitors to make up daily shortfalls or excesses.

    Just my 2 cents.

    jeff_C

  • The carrier has three costs:

    1. Fixed Costs (local loops)

    2. Variable Costs (switch capacity, trunks)

    3. Billing Costs (counting packets/calls)

    The problem with metered service is that the price for call minutes or packets is usually far in excess of the true variable costs. Phone companies want to price products on "value", not cost plus reasonable rate of return.

    Another problem is the high cost of the infrastructure needed to collect usage information and generate bills. This is a big number for circuit switched voice, I suspect it would be worse for packetized data. It can be cheaper to provide a flat rate pipe than add all the cruft required for metered service.

    The last time I saw some numbers, about 70% of the cost in providing local phone service was in non-usage sensitive things like providing and maintaining the subscriber's local loop. The prices charged by phone companies and PTTs have very little to do with the costs of providing service.

  • No, not free, but I want the know how much I'm paying (flat-fee) vs. finding out how much I've spent at the end of the month (per-bit rate). Who said anything about illegal?! I download demos of games, upwards of 50-100mb apiece, it's like seeing the trailers at movies. I think most flat-rate plans are based on the average users. I'm all for that since I am not an average user and they are subsidizing my use, and I like it that way.

    BTW my original post was quite murky (with hindsight) so this is clearing it up. I don't get the MickyD's analogy though, but then you didn't get my origianl post either.
  • by Anonymous Coward
    Brokering bandwidth isn't something that small shops and users will have to deal with. The power companies deal bandwidth at the lowest level. I am sure that only NAP's and other large AS's will find this useful.
  • by clawson (5082) on Monday May 24, 1999 @11:57AM (#1880794)
    Sure, a network of caching web proxy servers sounds OK. But there are issues...

    would SlashDot be served well for users on @Home who sucked up the recent "reconfigure your browser" e-mail (i.e., to configure it to run againt @Home's proxy servers)? Sure, they seem to get things downloaded faster, but what about real content?

    What about more nefarious things like "intelligent, filtering" proxy servers that sort of lose "bad", "inappropriate", etc. data?

    Maybe if HTTP could be split, or maybe when things like CSS, etc., could allow two streams of download: one stream for graphics, the other for the text. But none of the Ad-driven sites will go for that because it'll mean it's too easy then to just ignore the graphics pipe...
  • by AtariDatacenter (31657) on Monday May 24, 1999 @10:50AM (#1880795) Homepage
    It isn't quite that fluid. Today, at least, you just can't buy a T1 across the US for the afternoon then relinquish it later in the day. It takes time to set up the circuits, test it out, what not. Imagine the nightmare of trying to arrange for a T1 for a mid-day conference... there's a lot they're going to have to work out beyond buying and selling.


    Then there's service level agreements, what happens during a fiber cut... it all sounds like a nightmare. I think it is a neat idea, but the devil is in the details on this one.


    But this may not be so good for the everday users. We're back on the cost-per-connection model that everyone loves to hate.

  • Speaking of ads...

    What if the proxy server were to recognize ads going through (by typical GIF size, by URL, whatever), strip them out, and replace them with ads provided by the proxy server.

    What if @Home could remove the ads on web pages and replace them with other ads?

    On the other hand, forget you read this, I am off to write a business plan and find some VCs... ;-)

  • This does not solve the bandwidth problem. These people slice up the available spectrum time-wise instead of frequency-wise, but that does not make it possible to send more data than you could before. Information Theory has not been repealed, and attempts to get around it are, if anything, even more impractical than perpetual motion machines.

    The net effect of using time-based division in this way is to raise the noise floor for many channels in the frequency domain, hence reducing the amount of data that can be sent over them. A single such transmitter is un-noticeable, but using lots of them is another matter.

    Paul.

  • First, we had phone companies that controlled everything, then they were broken up into regional ones. Then we had deregulation and competition for local and long distance carriers. Now we have a whole mess with xDSL where you can sometimes end up making separate contracts with your phone company and your ISP. The xDSL service providers can shop around for the cheapest use of the network, and customers can shop around for the cheapest service provider and the cheapest local phone carrier.

    The ultimate goal seems to be more competition, more customer choice, and cheaper service. I see this "bandwidth commodity" idea as simply continuing the trend to it's ultimate end. We (the end users) get more options and cheaper rates, with admittedly, more confusion. But in the end, we come out ahead. I say go for it, take deregulation to it's logical end; that's what this seems to be.
  • Enron's net operations are headquartered here in Portland, Oregon, where I live, and I buy my electricity from them (through subsidiary company Portland General Electric which they swallowed in 1997), which has more than a little to do with the location of their NOC here.

    What we have learned about Enron is that they are an aggressive and less than trustworthy organization. They are dramatically expanding their business lines beyond the core of natural gas trading and natural gas transmission into electric markets, municipal water systems and now bandwidth. I would not be surprised to see them take a leap at telecom next, because their effort to take over the American electric industry stalled after they bought PGE.

    Enron trumpets its reputation as an ethical multinational business. They belong to various councils and associations promoting good business practice. However, the record is actually quite different.

    Last month, their new natural gas power plant at Dabhol, India (Maharashtra State, southwest of Bombay) opened up. This is not only the largest single power plant in the country, it has also been the center of a 7-year political struggle involving a close (some say corrupt) relationship with leading politicians and political parties, and repression against the thousands of local residents whose homes and livelihoods have been disrupted by the construction of the plant and its land and water needs.

    India is not, as some people think, a moribund "third world" country. It has titanically huge problems but it is also the second largest nation in the world (and will possibly surpass China within a few decades), and the largest democracy on the planet. It has the ill-famed "streets of Bombay and Calcutta," and it also has more PhDs than any country on earth. (And lately, it has atomic bombs.)

    What Enron did in India is hardly a matter of just pushing a few backward natives out of their huts. The Dabhol plant has been a major factor in national politics, the subject of parliamentary and Supreme Court inquiries, the focus of demonstrations where thousands were arrested on Enron's behest, and where Enron even paid for off-duty police to harass and assault opponents of the plant.

    This is hardly grapevine stuff. It is documented in great detail in a full-scale report [hrw.org] by Human Rights Watch issued earlier this year.

    When speaking of Enron, remember that they have one of the most aggressive self-promotion efforts of any company involved in utility operations, whether it be gas, electric, water or bits.

    ------------

  • How are they going to be able to do this? Bandwidth is sort of a fixed item... You cant just sell it to someone else and hand it over in a box... I suppose I could sell my driveway as a commodity, but no one would want it unless it was in front of thier house...
  • by Grit (18830) on Monday May 24, 1999 @03:15PM (#1880802) Homepage
    I've skimmed over the white paper on Enron's web site, and here's my impression of how they think this will work.

    Every bandwidth consumer must be connected to a "pooling point" at both ends. A pooling point is a router or group of routers, and all bandwidth sold in the commodity market is between pooling points.

    When the consumer reaches an agreement with a provider, both parties contact the pooling point operator and receive a /30 range of IP addresses. (That is, 4 of them.) If the bandwidth changes hands, the IP addresses are assigned to the party that receives it.

    Then, when it's time to actually deliver the bandwidth, the routers must be configured to send traffic like this: (The last two bits are not actually specified in the document, just here as an example)
    Consumer (source)
    |
    | local, "fixed" network (leased line?)
    V
    IP xxxxxxx00
    San Jose pool
    IP xxxxxxx01
    |
    | provider network
    V
    IP xxxxxxx10
    Wash, DC. pool
    IP xxxxxxx11
    |
    | local, "fixed" network
    V
    Consumer (destination)

    So, what the bandwidth provider is selling is a promise to route traffic coming out of IP xxxx01 through IP xxxx10 (and the other way around, presumably), and the consumer must direct all traffic it wants to go on that link through the corresponding IP addresses. In other words, the consumer treats the "middle section" like a router with connections to both of his sites.

    The problem I see with this is it makes routing tables huge. Every connection you sell needs a separate routing entry, since they're unlikely to be aggregateable. Plus, you'd have to either have a dedicated line between the two ends you provided, or do tunnelling, to guarantee that you treated the packets as the contract specified. (Otherwise, how can you distinguish between packets on your network from one contract and another? Remember, the original contractee can resell the bandwidth to anybody, so you don't know what the actual source and destination addresses are until the packets actually start flowing.) The bandwidth provider has to do routing based on the gateway address, not the source and destination.

  • Em, I live in Sweden and that is the market I was reffering to. If you think telederegulation has gotten anywhere here you are either blind or in a dream world.

    Cable modems have not been widely deployed (so if you have access you are very lucky).
  • Yes, but the difference is that your upstream provider is always the same one. The point of bandwidth brokerage is that you have several upstream providers, each bidding to get your traffic, and you choose where to send each packet based on cost, but also quality of service. You can also offer transit capacity to two ISPs which are connected to you but not to each other. This is of course already done, but usually by way of writing new peering agreements, signing them and returning them by fax, i.e. slow. A bandwidth brokerage would speed this process up and also offer a measure of automatability (no humans involved). And then of course, you can do all the things you can do in real commodity markets: futures, options and all the other derivative thingies that I don't understand a thing about.
    Anyway, that's my take on bandwidth brokerage. The article might of course be talking about something completely different. :)
  • And the best damn aliens ever

    I still really like Asimov's The Gods Themselves, but yeah.. That's exactly what I meant by the book having great stuff about consciousness. It's just so interesting to think about how these aliens think.

    I should also mention that I'm pleasantly surprised someone here has actually read the book besides me. Gotta love the /. community! :)
  • What will be traded is, essentially, the right to ship bits between a small number of fixed points (e.g. 1 per city). This is right is valuable. There are people with capacity to sell, and people who want to use it. The most efficient way of allocating the supply between users, and of encouraging the right amount of supply to be built in the future, is to have an open market where everyone can see what the "going rate" is.

    Remember that this is a wholesale commodoties market. When you want some copper wire you don't go down to the Chicago Board of Trade and bid for it on the metals trading floor. But the people who run the copper wire factories certainly do.

    See Band X [band-x.com] for a more primitive example of this kind of thing. They have led the way here with voice telephone calls. Basically you connect your trunk line to their switch and you can then set up bulk deals for minutes of connection time between the switch and the other ends of whatever cables are connected to it.

    Paul.

  • Bandwidth supply is increasing at a rather brisk rate. Unlike gas, and most other commodities, you can't just store it up and put it on the market at a later date. I think their drawing of analogies are kind of suspicious.
    I don't think bandwidth really qualifies as a commodity. This whole idea is pretty scary.
    brian
  • Read Permutation City [amazon.com] by Greg Egan to get a pretty good idea how this will work in practice.

    Regards, Ralph Bearpark.
  • I think you're thinking in the wrong direction. Comparing the internet with gas lines is just a bad comparison, because, indeed as you say, on one side, a cubic foot of gas has an intrinsic value, while a kilobyte of packets doesn't. But on the other side, bandwidth can be shared between dozens of consumers and providers. Try sending one specific cubic foot of gas from one specific point to another specific point through that big net of pipes... :-)

    Comparing gas pipelines and the internet is like comparing melons and oranges. They're kind of similar, but the similarity is only superficial.

    The internet can much better be compared with mail and transport. A pound of mail has no intrinsic value either, nor does a cubic foot of mail package, just like a kilobyte of packets. One cubic foot of mail package can travel seemingly independently from one consumer to another through the mail system, just like a kilobyte of packets can do that through the internet.

    How does the mail work? You pay for upstream mail only, and many companies, as a service, give you postage paid enveloppes for your return mail. The internet could work the same way, and that's what I think the general geste here is.

    But then still there's the bit about the bandwidth. Basically to you nothing would change. You'd just pop your packet into the mailbox, and your ISP would empty that mailbox. But then your ISP has the choice to send it on with UPS, with TNT, with American Express, and so on, and your ISP would choose the best option regarding speed and cost. You, the consumer, wouldn't notice very much of a difference, except maybe a cost decrease and/or speed increase because your ISP can easily choose what's best.


    )O(
    the Gods have a sense of humor,
  • No one is forcing you to use the search engines, and they're not the ones who are collecting your money, so why should you ask them for your money back?

    If it's that easy, can't you just write one yourself? Then what happens when your customers want their money back from your free service?
  • Posted by Vik Olliver (at home):

    I have started. I'm funding a local community bulletin board, and wiring it up with anything I can lay my hands on.

    Vik :v)
  • by Anonymous Coward on Monday May 24, 1999 @11:40AM (#1880813)

    First of all, I don't believe the infrastructure to buy and sell bandwidth is in place yet, at least for arbitrarily located machines. This is being worked on, for sure, but in general case I don't think you cannot buy or sell anything but what is essentially a leased line.

    You're thinking of the n^2 possible connections between the sites on the network, and if you did need to connect them all, then yes, it wouldn't be feasible to trade bandwidth like a commodity. Fortunately, this is not the case.

    Recall that the basic network topography is more or less hierarchical. (If you imagine it as a balanced binary tree, then the number of hops to connect two arbitrary machines is O(log n), where n is the number of nodes in the network, and there's a 50% chance that you will pass through the top level on any given connection.) So you can start with bandwidth trading on the routes between the big backbone sites and still reap much of the huge benefits of commodification -- after all, almost all traffic passes through the backbone eventually. (For those who've forgotten their econ: the benefit of an exchange is that it becomes much easier to match up buyers and sellers. Think how much aggravation and time would be saved if, say, houses could be bought and sold in minutes rather than weeks.)

    And as the market matures, bandwidth trading will naturally spread to lower and lower levels of the network tree. I think it's unlikely that you or I will be trading bandwidth any time soon, though, any more than you or I invest in oil futures before heading to the gas station, but odds are that very soon our ISPs will.

    Besides, there is a book (IIRC called "Virtual City", but I am not sure) that very well describes a similar system where you buy remote processing power in micro-chunks on the as-needed basis. The book is recommended, by the way, it explores the consequences of being able to transfer human consciousness into a piece of software.

    You're thinking of Greg Egan's Permutation City, which is lots of fun if you're into AI, madness and Platonism. The ending is seriously weak, though.

  • Though there are new oil wells being tapped fairly continuously, this is nothing compared to the growth of network bandwidth availability.
    For example, the price to have a T-1 speed connection drops significantly every year. Heck, what used to be $2K/mo is now a $40/mo cable modem.... semi-dedicated, but the same thing goes for larger providers. The price of bandwidth should fall every year, by a large amount.
    I'm not sure this kind of 'market' abstraction will work here. Is everybody going to just check the index and see how much bandwidth is down today? Because realistically, it should never go up. It's like disk space... sure, we always need more of it.. but if we were selling it on a market, we'd have to change units from KB->MB->GB->TB and on up every couple years.
    That doesn't seem like a proper market to me. I'm sure gas experienced an amazing growth, but I think that's nothing compared to what's in store for us...
  • by RebornData (25811) on Monday May 24, 1999 @12:00PM (#1880815)
    Bandwidth bartering is a little silly today, given the high cost and low speed of residential local loops. But imagine how things will change if local loop / MAN connectivity (Metropolitan Area Network) starts resembling a LAN more than a WAN (fast, ubiquitous and cheap).

    First off, it's likely that your average person will have a much higher local connectivity speed than they could expect to use for free over the WAN. This is not the case today- the Internet WAN is SO much faster than most people's MAN connection (their analog POTS modem) that there's a reasonable expectation that you can get a MAN speed connection between any two points on the Internet WAN without paying extra. This will not be the case as the multimegabit MAN becomes a reality. I can't expect to get a 2Mb/s connection from my home in Houston to my Dad in Chicago for "free".

    However, both producers and consumers of content and network-based applications will want to be able to take advantage of that new MAN speed, and are likely to be willing to pay for it. This creates a market for guaranteed quality bandwidth from point to point. In the consumer market, this need is likely to be on-demand. If I decide I want to "rent" a streamed episode of the Simpsons from the Fox website, I'll be happy to pay a few extra cents for a guaranteed quality connection for the time I need it to watch the show. This won't negate the need an unguaranteed Internet like we have today, but will create the financial motivation to introduce guaranteed QOS either through separate parallel networks or some sort of traffic prioritization. I believe Enron is building a parallel network.

    This dramatically changes the economics of the WAN bandwidth. Right now, both information distributors and consumers share the cost of WAN connectivity by paying to connect to an "upstream" Internet provider. The producer pays it directly, and the consumer pays it as part of their ISP bill. However, in a world where high quality bandwidth is requested and paid for on demand, this cost burden must shift to the producer entirely since it's the producer who is providing the on-demand service and will be able to pass the costs of that on-demand bandwidth to the end user directly (or subsidize it with advertising).

    As the guaranteed QOS WAN bandwidth companies begin to compete for the business of the producers, it becomes critical that they be able to promise nearly universal reach; to be able to connect to as many consumers as possible. So they will be motivated to connect to as many of the local loop providers (local ISPs) as possible. This won't happen if the local loop provider has to pay for the WAN connections, so companies like Enron will offer connectivity to ISPs for free or even pay them for the right to reach their subscribers.

    So in the new world, it works like this. A content or application distributor will connect to some sort of MAE-like bandwidth trading facility and buy WAN connectivity from the various WAN vendors located there. At first, the bandwidth units will be traded in large chunks, but it will become more and more granular as routing protocols evolve and dynamic financial-cost routing and accounting becomes more practical. The content producer will either charge the customer for the content and delivery bandwidth, or will pay for the services via advertising. The consumer's ISP will be paid by these WAN bandwidth companies for the privilege of reaching the consumer, who may end up paying nothing for their MAN connection (similar to the TV broadcast model).

    Enron is betting the farm that this will happen. They're investing big bucks in building this huge fiber network in anticipation of providing this service, and they are already hooking up to local ISPs to make it possible.

    At least, this is how I read it. What do y'all think?
  • by komet (36303) on Monday May 24, 1999 @10:36AM (#1880816) Homepage
    IMHO, network admins are a completely different bunch of people than stock brokers. Who will do the dealing? Will network admins have to learn to phone with 3 people at once? Or will stock brokers learn about BGP4? Only time will tell...
  • let me get this straight... people pay money to buy routers, servers and lines, and pay yet more money to maintain them, yet you demand to use that for free? and for illegal activity too? that's like going into a McDonalds, sitting down in the non-smoker section, lighting a cigarette, and demanding you have a Quarterpounder menu for free.


    )O(
    the Gods have a sense of humor,
  • So, you're saying that if I run a WWW browser with the graphics display disabled [and other ramifications]

    IANAL, but 2 things strike me about this argument:

    you're not mangling the html by not loading the images the code refers to

    some of what you do privately (e.g. have the browser render the document in a certain way, fast foward through the video while watching a movie with friends who you aren't charging to watch) may fall under 'fair use' anyway. It's when you do it for profit or to the public that things get funny


    Anyway, I'll believe all the ad replacement stuff when I see it.

    Untill then,
    H-Monk

    --
    SG:Who is your arch enemy?
    Bobcat: John Tesh.
    SG:The compser?

  • is what I see as the real problem. The rest gets computationally expensive, but workable. But you still have a single connection to the pool, and are stuck with that monopoly, which can collect the economic rents that the ISP might have in the past. I don't see this as solving the issue, just partially mitigating it--and adding the complexity that you descrbie (quite well, I might add) as an additional cost.

  • I think it's kind of scary. Connection should not be paid for for time meassuerd/bytes transfered, it should be paid for with a unity price (flat rate). And it does not matter if it's about T1s or telephone connections. In Europe everyone is paing per minute for their modem connections... Think we likes it? And I don't think waht is appropriate for The Management and the stock brokers is apropriate for technical peoples.

    We don't think in the same way as they do, so we dont work in the same way neither.
    /Egil
  • A lot of people have commented that this doesn't make much sense, for various reasons. Essentially the biggest argument has been that it's not technically possible to do this for arbitrarily located systems.

    However, in most cases you buy a circut from a telco (e.g. USWest) which is then connected to an ISP. You can buy the circut from the telco without setting it up to connect to anything and it would be useless. In this way bandwidth can be seperated from where it travels much as electricity is not the wire it travels across.

    Many ISPs maintain much bigger circuts with telco's than what they are actually using in bandwidth at any given time. And many maintain lines to multiple backbone providers (e.g. UUNet, Sprint, etc...).

    As such bandwidth could be shifted from one backbone provider or additional service added as desired. Obviously the technology isn't ideal because it can't be done automatically based off a commodity market that knows how much delivering a given packet will cost in monetary amounts. But it can be done on a much more crude hand basis.

    This isn't going to be useful for smaller companies or even individuals. But that's not the point. Just as smaller companies and individuals don't go to Enron to purchase their electricity for their houses, nor would they purchase bandwidth.

    It's still early on in this idea and it's still developing but the idea does make sense and it is possible.
  • In the UK the academic network charges the universities for transatlantic bandwidth.

    http://bill.ja.net/common/faq.html [ja.net]

    However use of the provided caches is not charged in this way. Net result was a drastic increase of cache usage by universities. Far more efficient usage of bandwidth, people paying for their share but still a long way off being a commodity to be exchanged yet.
  • This is not a move towards metering your individual user account and making you pay as you go. In fact, it's a move in the opposite direction. Even in today's relatively uncommoditized bandwidth market, the cost of paying for the right to use 56kb/s any time you want to is affordable for most people... the infamous $19.95/month. What's happening here is that your ISP (or the carriers upstream from it) will be able to buy their bandwidth more efficiently, which should eventually trickle down to the end users.

    And yes, search engines do suck. I doubt this will fix that.
  • It was at -1 when I posted. It got promoted back to 0 soon after.

    In retrospect, the "learn to moderate" line was needlessly inflammatory, but "censoring" useful information has always been a hot button of mine, and as people are prone to do occasionally, I knee-jerked.

    Yet another object lesson in the pitfalls of flaming, even if it seems justified at the moment.
  • by hawk (1151) <hawk@eyry.org> on Monday May 24, 1999 @10:51AM (#1880830) Journal
    This is one of my areas of economics . . .

    There is fundamental differences between this and other commodities markets, even the newer ones such as electrical distribution. Electricty or gas, once you get it there, is the same regardless of where it came from. Bandwidth, on the other hand, is the "getting there" portion of this. Electricity *can* be moved from Boston to San Francisco, and so can gas, by bumping the gas along the way (though it's not the same in & out).

    But bandwidth is always betwen A&B, and the only way to replace this is A->C->g->B. If you don't have ends at A & B, you just can't do it.

    Some type of commoditization is certainly possible, but I've alwasy assumed it to be through a semi-intelligent part of the packet that chooses a path as it goes based on the cost& lag of each path

    The chronological problem isn't to bad; it's been solved for electricity--you buy howevermany gigawatts for 2 pm on thursday, just as bandwidth would be. But there's those two loose ends of the path that need to be dealt with for bandwidth . .. .
  • Anyone who tries to corner the market in a commodity in order to screw a competitor is going to hear from the SEC very shortly afterwards. If you are any kind of commercial organisation that thought is enough to chill your bones.

    Paul.
  • How about buying up available bandwith and reselling it? Or just sitting on it to delay/screw around with a competitor?
  • This reminds me of Vernor Vinge's Fire Upon the Deep, which is about an interstellar society with the network structure of the early internet...

    There are massive "archives" and hubs which sell bandwidth.

    Really cool book about the nature of consciousness and stuff.
  • by komet (36303) on Monday May 24, 1999 @10:58AM (#1880835) Homepage
    That's not entirely true. Electricity, like data packets, move from A to B via connections. Now if A and B are not connected to each other, but A has a connection to C and D and B also connects to C and D, then you can move the electricity via C or D, where C and D will charge you a certain amount. The situation with bandwidth is exactly the same. Electrcal transmission line owners also have "routers" (those enormous switching stations you see by the road, not made by cisco).
    Bandwidth brokerage applies to ISPs which are not connected directly to each other. The same applies to electricity. Gas is the same, AFAIK.
  • Why scary? No one is going to buy into a scheme that costs them more than the current one, and as long as competition still exists, your prices aren't going to go up as a result. Same argument applies to metered access.
  • I may be missing something, but it is my impression that we are talking here about what's called "reserved" bandwidth. For example, let's say you want to videoconference between New York, London and Hong Kong over IP networks. If the route of your packets takes them through a heavily-used segment (think Starr report downloading), your videoconference is hosed. The idea is that you would be able to reserve bandwidth, which will be guaranteed to you, as in "you are guaranteed to have sustained 1Mb/sec speed between machines foo.com and bar.org from 15:00 to 16:00 on May 24, 1999". AFAIK this is currently technically infeasible for randomly located machines, but is heavily worked on.

    Kaa
  • by Kaa (21510) on Monday May 24, 1999 @11:00AM (#1880838) Homepage
    First of all, I don't believe the infrastructure to buy and sell bandwidth is in place yet, at least for arbitrarily located machines. This is being worked on, for sure, but in general case I don't think you cannot buy or sell anything but what is essentially a leased line.

    Second, for this to work well, we need some kind of micropayments structure in place, plus reasonably intelligent software agents that would be able to go out onto the net and buy bandwidth for us when we need it. I don't see this happening in the near future. In five years we'll see.

    Besides, there is a book (IIRC called "Virtual City", but I am not sure) that very well describes a similar system where you buy remote processing power in micro-chunks on the as-needed basis. The book is recommended, by the way, it explores the consequences of being able to transfer human consciousness into a piece of software.

    Kaa
  • It makes more sense to me to use bytes as the transaction unit because people like to have 24-hour net access, so they can just type in an url and get it to come up. People aren't actually USING the net unless they're actively transferring data.

    It would make for a much simple tracking system. I know the Linux kernel can do data accounting, but there isn't much in the ways of TIMING a connection. It just sounds fishy to me. You get charged by the AMOUNT of electricity you use, why not the AMOUNT of data you transfer?

    Of course, by timing it, they'd make lots of money... especially during prime time when everyone is lagged. :)
  • The key here is that the upstream providers are paying for *guaranteed* bandwidth. The Internet today (and its economic model) functions perfectly well today for (relatively) low speed, no guarantee connections from any point to any other point. A site like slashdot wouldn't bother paying for guaranteed bandwidth to the readers, since there's no bandwidth-dependent content. There's no need for slashdot to be able to fill my home DSL pipe at 800Kb/s like a streaming media provider would.

    So you basically have (at least) two classes of service: the completely unguaranteed, relatively low throughput "public" net that functions as the Internet does today, and the provider-funded guaranteed bandwidth broadband network that gets us the quality assurance to begin to take advantage of the nice big pipes we're just starting to get to the consumer premises. I'm guessing that, given the economics of the latter, it may be used to fund the consumer connection to the former, given that "any to any" connectivity is a big hook to get people connected in the first place.
  • by Anonymous Coward
    login: cypherpunks
    passwd: cypherpunks
  • Bandwidth as a tradable commodity has got to be
    one of the most evil "Internet" money-grabs i've seen come down the pike since 1993. Think about it: when you add in a middle-man who make his living by trading what Party A creates and Party B consumes the price goes UP, not down. Look at any manufacturer-distributor-retailer model.

    The next problem with this is that Fortune 1000 corps. are not going to accept a "Sorry, we couldn't buy (or sell you) any more bandwidth today" explanation from their ISP or net-broker. So you can bet corporations will be buying their own big chunks from their ISPs. Which means that only the little guys are going to feel the price difference here.

    The third problem with this is that network packets are not natural gas. Natural gas is purchased by corporations like ENRON at THE SOURCE, and then transported to a refinery. This model works because a cubic foot of gas (or gallon of crude) has an intrinsic value. Your data is usually worthless, except to you and the person you want to read it.

    This is a really good idea to support if you want to be paying 5 times what you are now to some talentless fool in Chicago or New York who's raking it in today because some other idiot put a back hoe through the piece of fiber your packets usually blink across. And if you want inferior service.

  • Okay, correct me if I'm wrong, but I think you're proposing to turn the world upside down; that content providers (servers) pay networks to connect them to ISPs instead of consumers paying their ISPs to connect them to the content providers? Very interesting, I had never thought of that.

    Off the top of my head, without having spent very much time thinking this over, I can think of a few problems. Perhaps they're not problems at all, perhaps there are solutions that I've overlooked. Or I may have completely misinterpreted your idea :-)

    1) Consumer to consumer connections. Since the content providers pay the WANS who pay the ISPs, who pays for such a connection?

    2) What would happen to sites like Slashdot? It would cost much more to maintain such a site, and they'd probably have to ask a (small) fee for not being an Anonymous Coward, if you catch my drift. On the other hand, this could be good or bad.

    3) Advertising on the web would increase immensely. I'm already completely fed up with banners, especially those banners that pop up right in your face, but that'll just get worse, especially on free content providers like Geoshitties. On the other hand, with a bit of luck Geoshitties will cease to exist :-)

    On the other hand, now that I spent a few more minutes thinking it over while writing this, it would be more of a real world feel actually. When you order something you pay that company for the goods, and you pay them to deliver the goods to you. That company hires a TNT or American Express or whatever to deliver those goods to you. The internet would follow the same model.

    In that view, maybe the consumer to consumer connections could be solved too in such a way by having a consumer pay for his upstream data, while downstream data is payed for by the other party, just like with snailmail. And ofcourse then you could (should) also have content providers that do the equivalent of sending you a postage paid envelope for your packets to them.

    Very interesting... I'll have to spend some more thought on this. :-)


    )O(
    the Gods have a sense of humor,
  • If you've ever performed a traceroute between two sites using different NSPs in a major city, you've probably seen funny things like Chicago-LA-St.Louis-Chicago. But what if all of the multi-homed ISPs in an area could route traffic between their multiple NSPs and get paid (or at least not charged) for that traffic? Not only would it speed up the intra-city traffic, it would also help free up bandwidth on the NSPs backbones.

    This would require some way for the NSP's customer routers to note if the traffic flowing to an ISP is destined for the ISP (or one of it's customers), or if it's going somewhere else (as in another NSP). The ISPs would probably also want some means to throttle or limit the thru-traffic, so that their customer's didn't end up suffering.
  • I just don't like any plan where I have to pay per megabit, which is what this looks like. I don't want to pay for streaming media or the fact that I download 200 MB of games a week. I also see large companies benefitting from this while average consumers are hurt. I understand how commodite trading can increase efficiency, but aren't most commodities perishable items (or limited supplies), I don't see bandwidth as either. It's a totally different beast and shouldn't it be dealt with accordingly, i.e. differently.
  • I pay a flat fee for a aloted amount of megabytes, plus if my company uses over a certain limit, a additional fee is charged, I (we) allways get T1 connectivity it's kinda neat. I just have to keep close tabs on would be warez'ers.
  • by Anonymous Coward

    I like it when people say "I'm an expert in this area, and it can't be done. bandwidth is different than other commodoties like gas, electric, etc"

    and then they get proven wrong.

    People said the same thing about the telephone bandwidth exchanges like Band-X, and then they got proven wrong. Band-X has been highly successful, and is the reason you see a proliferation of all these new long distance companies.

    ISP's already secretly negotiate bandwidth through peering arrangements. All that is left to do is make such arrangements market based.


    Obligatory /. connection: Eric Raymond showed up on a bandwidth market mailing list a few months ago and basically tried to tell everyone that they were wrong and that it was an idiotic unworkable idea. Seems that his brain couldn't possibly imagine how you would collect billing information.


  • In essence, right now, content providers DO pay networks to connect them to ISPs.

    Consider the case of someone with a 56K link, and a site paid for by advertising, that suddenly generates high demand: their server is clogged, nobody can get to their web site, their customers complain, and they go out and get a nice DSL line.

    They're paying for bandwidth just as much as the "consumers" are.

    In other words: when it comes to bandwidth, content providers are just as much bandwidth consumers as content consumers are.
  • That's an interesting idea, but I have massive reservations. While bandwidth itself is not physical, it's medium is not. You cannot have bandwidth without wiring (or cel towers in the case of wireless). Erecting OC-48 backbones and cellular towers requires a substantial investment, something that no small group of people could possibly afford.

    In fact, from looking at the web page for the New Zealand-based project, I'd say you have another corporation. Admittedly, it's smaller than US-based Sprint or MCI, but it's a company that provides bandwidth to users - an ISP.

    Eventually, if your company is to expand and provide, say, Internet2-type speed, it will need a lot more money. And at that point, volunteered contributions will be insufficient.

    The problem harkens back to the days of BBS's. The really popular ones got so much traffic, that the service oweners kept having to purchase more and more modems, disk space, memory, and processing power. Bu this only drove up the traffic, as more content and more people fileld the void. At some point, the owners had to start charging. People fled the BBS's when they had to pay and connected to the Internet proper (which also, not coincidentally, provided even more content and people). Perhaps we are reaching the Internet's Threshold of Payment.

    Either way, the end user (re: everyone but teleco departments and companies) will never see a change - unless you exceed your allotted usage, as determined by your ISP.
  • by L1zard_K1n6 (39154) on Monday May 24, 1999 @10:49AM (#1880853)
    By making bandwidth a commodity that can be traded and bartered, we can start using it efficiently.

    Currently, most (not all) web surfing could be adequately serviced by an extensive network of caching servers. Currently, most users get content directly from a site's main servers, which most likely is not the most efficient means of distributing data.

    Also, compression techniques will improve as vendors attempt to be more miserly about the bandwidth they use - most web content could be compressed for transmission much more than it is now.

    Compression and caching systems are but two technologies that would improve dramatically if we had to treat bandwidth as a commodity.
  • but....

    ... over time, a greater and greater percentage of the web, particularly many of the interesting parts (/.) are dynamically generated - thus making caching much less useful over time.

    Caching also means that the main site does not get a valid hit count - which inhibits the sale of advertising.

  • This is called "accounting". Mainframes, midrange, and even client-server systems have it built in. There's nothing new about it, except the bean-counters are starting to rattle their sabres. IT used to have some sway, particularly in a learning environment. But with the financial cost of networks spiraling, bringing them into the auditor's radar range...who can avoid wanting to charge?

    The big question is how to avoid killing innovation and creativity when you bind the hands that feed? Who's the judge of access and costs? There must be regulation, or we'll all be kissing the toes of Ma'Bell all over again.

    -fp
  • by vik (17857) on Monday May 24, 1999 @11:58AM (#1880856) Homepage Journal
    Look, there is no reason why most of us should pay anyone for bandwidth. That's just a myth perpetuated by telecoms companies.

    All we need to do is turn the world into one big, anarchistic, wireless WAN and run it by the people, for the people.

    See http://www.indranet.co.nz for an 11Mbit system currently trialing in New Zealand and Freenet on http://www.dcs.ed.ac.uk/~iic/4yp/

    The sooner people get off their arses and organise this, the sooner we'll be free of the complexities of ISPs, large IP bills, government censorship and dependence on telcos. All it needs is for someone to make an affordable comms link that will work across a road, and to make the design open source. Let's face it; that shouldn't cost more than a modem does now.

    Vik :v)

    PS If you have such a device LET ME KNOW!
  • If you do end up paying "link for link", then a new market will arise: that of the mutual virtual network. It will probably arise under a different name, but will arise all the same.

    Such an industry would not necessarily own network hardware. It would wheel and deal with companies that deploy net links, and it would rent vast quantites of global bandwidth. It would then sublet that stuff to the customer. A customer would sign up with one MVN, and pay them either a flat rate or a per-use rate, and all their data would flow over the bandwidth leased by their MVN.

    These would be the bandwidth equivalent of mutual funds; they act as buffers between the end-user (internet user or investor) and the market. MVNs would charge for their expertise in buying good bandwidth cheap (as mutual funds charge for expertise in buying good stock cheap), and pass along some of the bulk rate lease discounts (as mutual funds can do for always buying round lots of stock).

    Again, this wouldn't be so much a technology company as a financial outfit. You pay them, they pay the telcos you use. Thus, you get one simple Internet bill.

  • The devil is indeed in the details in this one.
    When I was in graduate school a few years ago we
    were kicking around packet-level billing models
    and came up with some ideas, but guaranteed QOS
    with guaranteed billing was near impossible -- and
    affected the bandwidth being sold (i.e., you end
    up reducing the bandwidth you're commoditizing
    by having to send billing bits on it). The time
    is coming for these sorts of ideas but I have yet
    to see anyone solve the fundamental network level
    billing problems.
  • Here in Utah [rep.net] there is the same sort of thing. The best part of it is Utah Education Network [uen.net] is connected to it so all of my packets to my home computer don't have to go accross the NAPs to get to my ISP [xmission.com] from school.
  • And the best damn aliens ever.

    Anyone into robotics that wants to build a skrode for my geranium?
  • Enron [enron.com] is an extraordinary company. Their bandwidth initiative is outlined here [enron.net]. Jeff Skilling, the President, has vision and the ability to put the resources together to pull things off. Under his leadership they were one of the companies which have shaped the market for natural gas since deregulation in the '80s, they have been a key player in the market for electricity, and they were one of the first to trade weather contracts (for example allowing one to speculate on the average temperature in St Louis in April -- you wouldn't use a contract like this, but think about utilities). I heard Skilling give a talk; he said that Enron is working with the New York Mercantile Exchange [nymex.com] about creating a bandwidth futures contract!).

    For the reasons others have mentioned in this thread, bandwidth trading is inevitable. Check out band-x [band-x.com] as an example of what is happening now.

    rmcd [mailto]
  • thats the whole point - the market is fragmented in terms of buyers and sellers. bandwidth is becomming commoditized - it WILL become a widely traded commodity like pork futures etc. within the next 3-7 years.
  • Here's a link to it on amazon [amazon.com].

    Very interesting ideas about all sorts of things: auction markets in processor time, continually improving AI spam and spam-filter contests, and some of the philosophical and technological consequences of transfering consciousness into software.

    Not to mention a good story.
  • by Grit (18830) on Monday May 24, 1999 @11:08AM (#1880868) Homepage
    For those who don't want to register for the NYT, you can read Enron's press release here [enron.com]

    The enron.net web site [enron.net] has a white paper, too, but you need to register to download it.

  • It seems to me when one talks about bandwidth brokering as a commodity, one expects behavoir displayed in the commodities market. E.g., the price of bread I buy at the store may fluctuate...if country Foo had a whole bunch of wheat it needed to sell cheap, then BreadCo. could snap that up and subsequently prices would drop. I don't see that as a consumer. It's transparent.

    Now, bandwidth brokering as being able to buy bandwidth yourself via a broker might be a bit different. As some people said, that might not be feasible right now. I know a lot of effort is being made to somehow merge ATM and TCP/IP networks. If that is done, then perhaps the "quality" guaranteed by an ATM network could be added to the internet. For instance, if you wanted a T1 connection from computer Foo on the west coast to computer Bar on the east coast, an ATM switch path could be set up, from only Foo to only Bar, with little or no interference between. As it is, the internet does not guarantee and "path", per se. Your packets could go around the world before landing where they're supposed to.
  • In America, you have to opposite situation, where because you have never been metered (well, not since the aol days anyways), and the companies are therefore offering DSL and cable at flat rates. Flat rates for lines of 2 megabit/s and above are just as ridiculous as cited Euro numbers however, it just won't hold.

    Some major American cities (New York, Chicago) are stuck with metered service for residential lines. Most business lines are metered. In many places, metered service is an option on residential lines.

  • by Hobbex (41473) on Monday May 24, 1999 @11:40AM (#1880871)
    Yes, but in the end the world simply isn't that great and simple a place.

    Here in Europe, where the telecom companies have been largely unchallenged (the introduction of competition is pretty much a farce) and unregulated, and we have the high metered local phone calls, they are already introducing prices per megabyte transferred on the new DSL and Cable modem services so as not to make them a cheap option to metered modems and isdn. The prices are ridiculous (try 5.5 cents per megabyte on a 2 mb/s line), but have to be so that they won't cost less much less than the phone call for joe-smoe-surfer-the-web.

    In America, you have to opposite situation, where because you have never been metered (well, not since the aol days anyways), and the companies are therefore offering DSL and cable at flat rates. Flat rates for lines of 2 megabit/s and above are just as ridiculous as cited Euro numbers however, it just won't hold.

    I see the bandwidth problem amounting to a giant pyramid game, where everyone just wants more and more and without paying, and it is great for a while, but then suddenly you reach the threshold, and the whole shit comes falling down on your head.

    The Internet's bandwidth needs to be a commodity so people begin realizing its worth, whatever it may be.
  • In fact bandwidth does share similarities with gas (and electricity). At a point in time, the supply of gas is pretty much fixed (it's very expensive to store). In the short run you can get big swings in the price depending on changes in demand and supply. Quality of service is important to buyers. Yes you can always build more bandwidth but it takes time. Given the fixed supply of bandwidth in the short-run, the question is how do you allocate it? This is what bandwidth trading is all about.

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