It strikes me that there are lots of legitimate, but conflicting, views
on this topic - all of which come down to there being no clearly
established principles for peering, traffic exchange, or settlements
(either de facto or imposed by law or regulation ---- and different
player are coming from worlds with very different existing models.
Traditional package delivery:
- sender pays, shipping costs paid by purchaser
- COD model - purchaser pays on delivery
There's the traditional telecom model:
- end users pay for basic connection and local facilities (which, for
corporate users includes PBX or Centrex costs)
- caller pays for end-to-end connection
- caller pays local carrier - with money flowing to both the long-haul
carrier and the far-end local exchange carrier (somewhat modified, for a
time, when it was common to have a separate long distance carrier, and a
separate bill)
- and then there's the whole realm of 900 numbers - money is collected
by the telco, but forwarded to 3rd party providers
Wireless:
- pay by the minute for connection, at both ends - settlements up and
down the chain
Cable:
- end user pays for connection and content
- cable company pays content providers
Internet:
- users pay for access, pay more for a larger pipe
- access networks pay for connections to backbone networks
- some formal exchange points
- lots of back-room peering arrangements
- general principle of settlement-free peering when traffic flows are
equal in both directions
- big problem with large one-way flows (e.g., the purported 1/3 of
Internet traffic that consists of Netflix video streams - not sure I
completely believe that statistic, but video sure seems to dominate the
net these days, with a lot of it coming from Netflix and maybe YouTube)
So... which model to apply:
- shipping model: sender pays shipping, bundled in price (we all pay
Netflix, Netflix pays all the carriers)
- COD model: (we're still paying Netflix, but Verizon collects and
forwards the dollars)
- telephone model: caller pays (but the notion of caller is kind of
tricky in a P2P
- cable model: customer pays local carrier, local carrier pays all the
upstream costs for both content and carriage (Verizon becomes Netflix
customer, pays Netflix)
And that's before we get into settlements - whomever pays the initial
bill, and whomever collects it - who pays the folks in them middle.
There are real costs, ultimately the end user pays the bill - so it
comes down to who collects the dollars and how they get distributed.
Where it gets muddied up is when:
- we try to avoid models that are "unfair" and/or "anti-competitive"
and/or threaten to Balkanize the net ("Fast Lanes," "net neutrality,"
"common carriage") - a rather important set of considerations to most of us
- big players start pointing fingers in the interests of pushing costs
onto others while maximizing their own profits
All in all, one big mess.
Miles Fidelman
--
In theory, there is no difference between theory and practice.
In practice, there is. .... Yogi Berra