[11118] in Commercialization & Privatization of the Internet
Re: A New CIX Design
daemon@ATHENA.MIT.EDU (Karl Denninger)
Tue Mar 22 05:42:09 1994
From: karl@mcs.com (Karl Denninger)
To: stpeters@dawn.crd.ge.com
Date: Sat, 19 Mar 1994 22:18:15 -0600 (CST)
Cc: karl@mcs.com, com-priv@psi.com, washburn@cix.org
In-Reply-To: <9403200310.AA02682@swan-song.> from "Dick St.Peters" at Mar 19, 94 10:10:35 pm
> >There is a <profound> difference in cost and load imposed between a Class "B"
> >network with 10,000 hosts behind it and a Class "C" network which can have
> >at most 253 hosts behind it.
> >
> >If you impose the charge based on the network class you make it
> >unaffordable for those who have older Class "B"s that they registered back
> >when they were plentiful, but are using only a small percentage of the
> >address space.
> >
> >How do you propose to address this?
>
> Do the obvious: weight the networks by the number of registered hosts
> on them. Sheesh Karl, even I know how to query DNS to get a list of
> hosts. Besides, CIDR is doing away with classes pretty much, no?
Registered hosts don't mean squat. What about the provider who does
dynamic addressing and has 1000 users behind 100 IP numbers, all
dynamically assigned per call? That's 1000 hosts, but only 100 numbers,
and none of those are <required> to be in the DNS tables. This is a
<common> model for SLIP providers.
Further, recent versions of named will allow refusal of zone transfers.
You can block some or all zones to prevent this kind of analysis. At least
one major national provider does this right now.
> I could devise random sampling schemes to look for unregistered hosts
> to check for cheating. More knowledgeable people could devise better
> ones.
That's an idea, but you're starting to look at a <serious> analysis
problem, and one that I'm not sure the router vendors can even handle
today. CISCO can only break it down so far, for example. Most equipment
is simply incapable of keeping that kind of statistic.
It gets worse, not better, with CIDR. Now you have only one route entry
per netblock. We have a 32-class-C netblock. How many hosts <and
customers> are behind it? You have no way to know how I have divided that
up internally. Thus, you have to take my word for it, and if you give people
that kind of an incentive to lie (and no auditability to prove otherwise)
there will be those who do.
This is a serious issue if you're going to go down this road.
> >The existing contracts and agreements run for two years. Anything which
> >dilutes the value we paid (and others paid) is going to be seen VERY dimly
> >by the present membership, and in fact could be seen as a breach of contract
> >by the current members. I know that I would view <very> dimly any attempt
> >to "force" the CIX to change its pricing model.
>
> Well, I put my proposal "on the table" at your invitation. If the only
> thing you'll accept is no change, you misled me, and I fell for it.
Nope. I'm saying that you have to satisfy the requirement of the existing
CIX members that their investment not be diluted for the enrichment of
someone else <at their expense>. If you can demonstrate good value to all,
you'll get a fair hearing and I suspect even some movement.
Again, I am <not> adverse to this as long as it isn't a screw for me and
the other members. If it can be done fairly, then its worth consideration.
I just happen to be in the "cynical" camp on this kind of "fairness" thing;
I've seen far too many "fair" proposals that boil down to a per-packet
charge, which is exactly what some (but certainly not me!) want to have
happen.
I just haven't seen anything which makes sense as of yet as an alternative.
> >Look at the present model again:
> >Let's say, for example, you have 10 people who want to corroborate on a CIX
> >connection. That's $10,000/10, or $833/year/each.
>
> Go to bed Karl. Your arithmetic is getting as bad as mine.
>
> --
> Dick St.Peters, Gatekeeper, The Pearly Gateway; currently at:
Blech. Ok, $1,000/year/each, or $83/MONTH each. Still not out of line; less
than half the monthly leased line cost for a 56kbps DS0 in most places, and
absolutely dwarfed by the $875 that Ameritech charges to INSTALL that DS0
plus the equipment you need to USE the DS0 you just got.
Let's take some REAL numbers -- all monthly:
56kbps DS0 link to the Internet (ie: Sprint) $1000
10 x 56kbps DS0 links to each "members" home $1500
CIX routing add-on ($10,000 / 12 months) $ 833
Amortization on 10 Netblazers + DSUs $1458
($3000 + $500 capital cost each, 24 month
straight line depreciation)
Amortization on one CISCO AGS+ with 10 SYNC ports $1000
(Basis cost of approximately $24,000)
-----
$5791
Each member's share $ 579
Note that only $83 of that is CIX cost, or about 13%. For that 13% you get
connectivity to the rest of the world! Not a bad deal, IMHO.
Can this be done cheaper? Sure, with dial-up at 14.4kbps, IF you have
flat-rate telephone service. Note that in the example above I ignored the
connection charges for those DS0s (which would be roughly $8500) entirely!
Here's the model for 14.4 dial-up, assuming $50/month flat-rate phone
service to your "central point" for each and the same parameters for
everything else (2 years is about useful life these days for this kind
of gear):
56kbps DS0 link to the Internet $1000
CIX Routing cost $ 833
20 business phone lines @ $50 $1000
20 Modems @ 250 each, amortized $ 208
(you need modems and lines for EACH end)
Amortization on one Telebit Netblazer N10-1E $ 145
Amortization on one CISCO 3102 $ 146
-----
$3332
Each member's share $ 333
Quite a bit cheaper, but not THAT much cheaper. Even at this point you get
global connectivity for about 25% more. That is, if you take the CIX cost
out, your total investment on a monthly basis goes down about 25%.
This is unreasonable by your reasoning? I disagree!
The CIX uptick is NOT serious money for even small groups of people who want
to band together to form small IP provision co-ops. Can you pull it out of a
bank account tomorrow if you're one person? Probably not in many cases.
But we're not talking about "one person" here -- ONE PERSON DOES NOT NEED A
CIX MEMBERSHIP! We're talking about small co-op arrangements and other
similar things, and there the cost is simply not prohibitive. For groups
of <ten> or more I would say you don't have a case to be made here, or if
you do you're arguing over a couple of $20s per person.
Until the hardware to do this is a couple of grand <total> (talk to CISCO,
Wellfleet, Telebit and modem makers about this problem; I can't help you
here) and the telco's price lines at lower costs, the CIX costs are almost
lost in the noise level. Certainly you are getting good value for your
money.
Or are you arguing for the <2 to 10> crowd? Well, to that I say "there are
costs to any business model". There are <always> going to be points in the
curve where it is not economical to do something you would like. This is
no exception.
If you can get 10 or 20 people together on this in an area, you're talking
about something that most of us reading this can afford, if we want to, and
you get damn good value for your money besides.
Lots of people have paraded around whining that "$10,000 is SOOOO much money".
The fact of the matter is, if you look at the above, that it is not that much
of your total budget for a small provider or co-op to absorb. And for that
relatively small (13-25%) cost increase you get a HUGE functionality
improvement.
Now demonstrate how you can get that <same> functionality for significantly
less cost. I'm all ears. Note that there are SERIOUS fixed costs to such
an interchange point -- if you don't get the big guys to buy in, you're
screwed up front as the amortization on the gear and office will bury the
small fry.
This is, in no small part, what makes the CIX work. It is attractive to
both the small provider AND the huge one, by virtue of knowing EXACTLY what
you're going to pay up front, and what you get for the money. And,
overall, the cost is in fact quite reasonable.
--
--
Karl Denninger (karl@MCS.COM) | MCSNet - Full Internet Connectivity (shell,
Modem: [+1 312 248-0900] | PPP, SLIP and more) in Chicago and 'burbs.
Voice/FAX: [+1 312 248-8649] | Email "info@mcs.com". MCSNet is a CIX member.
