[1433] in Commercialization & Privatization of the Internet
Volume-sensitive charging
daemon@ATHENA.MIT.EDU (Jack Haverty)
Thu Oct 3 17:31:13 1991
Date: Thu, 3 Oct 91 14:27:39 PDT
From: Jack Haverty <jhaverty@us.oracle.com>
To: bzs@world.std.com
Cc: stev@ftp.com, SEAN@SDG.DRA.COM, com-priv@psi.com
In-Reply-To: Barry Shein's message of Mon, 30 Sep 91 15:47:44 -0400 <9109301947.AA26941@world.std.com>
Barry,
At Oracle we've been using some "usage-based, not-to-exceed" services. They are
especially valuable in parts of the world where services are very expensive
(seems like almost anywhere except the US). With the state-of-the-art of much
networking software (in switches as well as computers), it is disturbingly easy
for something to trigger a horrendous quantity of data flow. For example, some
TCP implementations do not behave well when faced with satellite delays, and can
end up making many needless retransmissions. Similarly, routing "storms", mail
loops, and other technodisasters can wreak havoc.
Usage-based pricing is attractive for situations, such as small sales offices,
where occasional usage is desirable. It's typically a lot cheaper than "all you
can eat" networking, but holds unbounded financial risk, not only due to user
mistakes but also due to aberrant behavior in the various networking technology.
The "not-to-exceed" services provide a nice compromise, where the financial risk
is capped, and the service provider takes some of the risk - which is what the
20% surcharge is all about. Most of the time your charges are much less than
the "flat-rate" level, but if something goes wrong, at worst it will be 20% more
than that. This allows us to provide user services in more places for the same
cost.
Jack