[11090] in Commercialization & Privatization of the Internet
Re: ANS and the CIX - have they really connected?
daemon@ATHENA.MIT.EDU (George Herbert)
Mon Mar 21 21:50:48 1994
To: cook@path.net (Gordon Cook)
Cc: gwh@crl.com, karl@mcs.com, matthew@echo.com, com-priv@psi.com,
fair@apple.com, stpeters@dawn.crd.ge.com, washburn@cix.org,
gwh@crl.com
In-Reply-To: Your message of "Sat, 19 Mar 1994 22:18:20 GMT."
<9403192218.aa19048@pandora.sf.ca.us>
Date: Sat, 19 Mar 1994 19:05:13 -0800
From: George Herbert <gwh@crl.com>
>Gordon Cook asks:
>I am missing something here. If I were charged by the byte for such small
>service provider access, that access would likely be more expensive than
>th e access available from the larger no settlements providers. I'd
>stick with them and the small service setllemnets advocates would go
>out of business. No?
You were missing something. I was analyzing total costs for the provider's
pipe to the rest of the net, not if the provider directly passed per-meg
costs on to the customer or not.
If small provider can get a cheaper per month access to the net, given
their actual bandwidth usage, by going through someone who has relatively
low buyin costs but a per meg cost, then it's in their interests to
support that methodology of pricing. If they want to average the per
user net bandwidth and charge a flat fee they still can do so, and if
their total costs are lower than other providers they'll be able to
sell lower.
There is also the go/no go feasibility of doing the startup at all.
$10k is a lot of money for a small startup. You can't get $10k out of
most people's bank accounts. You can't pay the CIX in sweat equity.
Banks seem to have an aversion to network provider startups (I don't
know why, I have yet to see one fail, all the ones I see are growing
like mad... but banks are by nature sort of conservative). If the
per month cost is higher but the initial investment lower enough
that the company can afford to start, then you adjust the business
plan and go with the higher per month option.
-george william herbert
I am only speaking for myself
