From: jim bell <jimbell@pacifier.com>
Date: Tue, 13 Aug 1996 06:29:07 +0800
To: cypherpunks@toad.com
Subject: Re: Unmetered Net Usage
Message-ID: <199608121741.KAA11226@mail.pacifier.com>
MIME-Version: 1.0
Content-Type: text/plain


At 02:20 PM 8/11/96 -0700, Timothy C. May wrote:

>
>Will "unmetered" usage go away? It depends on a lot of factors. Right now,
>unmetered usage is a big enough marketing draw that it appears to
>outcompete metered usage plans. Sure, there are people like me who pay a
>flat rate (in my case, $20/month) and yet who are on for several hours a
>day. But the subscribers who also pay the $20/mo and yet who are on only
>briefly to check their mail are not clamoring to switch to metered usage.
>
>If Internet telephony becomes a big deal, I still suspect unmetered usage
>will be common. If the capacity isn't there, from the ISP through the
>various links to the other person's ISP then there will be stalls and
>delays. Think of it as evolution in action, like crowded freeways.

We need to consider separately costs of unmetered access to the ISP, and 
unmetered access to the Internet.  I expect that the main reason for these 
limited-time plans have little to do with Internet traffic, and a lot to do 
with local phone link limits.

One big cost for at least small ISPs is local telephone lines.  Due to the 
"infinite wisdom" of rate commissions, business-line charges are 
substantially higher than residential.  (and ISP's are businesses...)   A 
person who uses 6 hours per day of connection to his ISP is occupying at 
least 1/4th of the capacity of one phone line, and given typical circadian 
usage patterns, in practice he's using 1/3rd or more.  If the ISP's cost for 
that telephone line is $30 per month, then that user must be charged $10 per 
month for this service just to cover this cost.  That customer, however, 
might only be using a rather tiny fraction of the ISP's actual Internet-line 
capacity, except possibly when his Internet telephone is operating.  Also, 
the customer isn't inclined to occupy his own telephone for this length of 
time, either, especially if he has only one line.

So it seems to me that within 5 years or so, there ought to be a powerful 
incentive to wire up apartment complexes and business parks with alternative 
Internet/Internet-telephone connections, ones which bypass the phoneco for 
at least the first few hundred feet.  This, possibly in concert with a 
ISDN-driving concentrator or a cable-modem, should reduce the cost of the 
customer-to-the-ISP line to a very low value.  


Jim Bell
jimbell@pacifier.com