[2663] in Commercialization & Privatization of the Internet
Re: Settlements
daemon@ATHENA.MIT.EDU (Stephen D Crocker)
Sun Apr 5 14:50:55 1992
To: Ken Laws <LAWS@ai.sri.com>
Cc: com-priv@psi.com
In-Reply-To: Your message of Sun, 05 Apr 92 08:13:15 -0700.
Date: Sun, 05 Apr 92 14:49:11 -0400
From: Stephen D Crocker <crocker@TIS.COM>
I have heard the airlines use a statistical settlement scheme. But
the *mechanism* for settlement isn't the main issue. The main issue
is the *model* for charging each other for service. In general, there
isn't a single right answer. The minimum requirement is that each
party recover its marginal cost of operation. (Anything less than
that and it's more economic for it to go out of business.) There's
usually a lot of room left over after marginal costs are reimbursed.
Allocating these "excess" funds is what it's all about. One man's
"fair" is another man's "extortion".
Steve
