[462] in Commercialization & Privatization of the Internet
Re: How will CIX affect rates?
daemon@ATHENA.MIT.EDU (Martin Lee Schoffstall)
Wed Mar 27 17:45:38 1991
To: koreth@ebay.sun.com (Steven Grimm)
Cc: com-priv@psi.com
In-Reply-To: Your message of "Wed, 27 Mar 91 14:13:07 PST."
Date: Wed, 27 Mar 91 17:42:59 -0500
From: "Martin Lee Schoffstall" <schoff@psi.com>
Ever since I read the CIX announcement, I've been wondering how this
interconnection might affect the price of hooking up to the commercial
internet. I can see (to my mind) equally good reasons for AlterNet,
PSI, and friends to raise, lower, or not change their rates. Will we
see a price war, like the U.S. long distance phone companies say they're
conducting? Or, now that there's essentially only one place to get
decent connectivity on a restriction-free net, will all the services
become more expensive?
At the retail level for the three CIX participants, one goal of the agreement
was to insure that there would be no price increases in the short term,
looking at the post NSFNet world of oct92 the CIX partially insures that
there will be no price increase as we go from a long-distance-free-good
to something-else. On the internetworking side of the PSI house
prices have been sliding for 4 years and have never gone up, I believe
this is true elsewhere.
Since the current regionals are subsidized directly through $'s or
indirectly by getting free T3 long-distance (temporarily at least),
it is difficult to project prices since they do not reflect expenses.
I do think that this agreement is probably the most important development
in wide-area networking in quite some time, and I'm really happy to see
it.
Nice to see a postive comment.
Marty
