Mailing List Archive

On 23/Jul/20 20:08, Nick Hilliard wrote:

>  
>
> The whole idea of having your routing stack poll a remote server with
> a query which essentially asks "should I continue to operate?" with a
> default answer of "No" seems like a unusually stupid way to provision
> a network.  Regardless of the timeout parameters.

Right up there with running your RR in AWS, "because you can".

Mark.
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On 23/Jul/20 21:05, Saku Ytti wrote:

> I think it's well done and I can see applications where it adds real
> value to customers. For us the OPEX of dealing with licenses is too
> much, we want a one-time fire and forget solution, which they offer.
> But if I'd install and decom hundreds of CPEs yearly, with varying
> level of features and I'd immediately transfer feature costs to
> customers, this is really attractive. You buy the boxes without
> licenses and you buy licenses separately, and you ship just-in-time
> the license you actually need, and you return it to your pool once
> you're done. If pools run dry, you get alerts and you procure more.
>
> I also think licenses are a good idea, but often horrible execution.
> Not having licenses means you're subsiding people who use features
> heavily. Not having licenses also means the vendor doesn't know where
> money is pouring in, should they invest in multicast, 6VPE, LISP NRE
> or something else? Licenses mean you don't subsidize other players,
> you pay for features you use, vendor will understand where to invest
> NRE for better return.
> Similarly as a metered Internet is a great idea, with almost
> universally horrible executions. I am a heavy user, who is being
> subsidized by low income moms and pops, doesn't feel fair. For my
> electricity I pay separately for transmission and consumption, which
> is a great and fair model. Transmission is fixed cost, use or not,
> consumption is not. Uncongested Internet would be market driven fact
> for metered, because in flat rate Internet dropping packets increases
> margins, in metered Internet it reduces.

I agree that licenses make sense. I've often got great deals from
vendors because they support license models, both in the Transport and
IP/MPLS worlds.

But like you, I want to deploy a license on a box and forget about it.
Having to regularly "call home" is not cool. That said, if you are a
Consumer network that ships out millions of CPE, this may make sense to
you, and I won't be the one to shoot it down.

As long as the vendors know not all sizes fit in on hole, I'm good.

Mark.
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Saku Ytti wrote on 23/07/2020 20:05:
> I think it's well done and I can see applications where it adds real
> value to customers.

There are areas where licensing can make sense, but agreed that most
implementations are awful. The case in hand here is akin to having a
chainsaw constantly threatening to cut the branch your business is
sitting on unless you actively stop it from doing so. If other people
want to build and operate networks on this sort of premise, then they
are welcome to do so and I will cheerily wish them all the best.

> Similarly as a metered Internet is a great idea, with almost
> universally horrible executions. I am a heavy user, who is being
> subsidized by low income moms and pops, doesn't feel fair.

in this specific case, you're confusing the total cost of customer
ownership with cost of service delivery. The main individual components
of residential ip service access are fixed business costs and whether
people avail of customer support; bandwidth consumption usually only
has a marginal impact on overall service costs, to the point that
creating the accounting and billing systems to handle the difference
usually isn't worth it.

Nick
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On Fri, 24 Jul 2020 at 16:24, Nick Hilliard <nick@foobar.org> wrote:

> in this specific case, you're confusing the total cost of customer
> ownership with cost of service delivery. The main individual components
> of residential ip service access are fixed business costs and whether
> people avail of customer support; bandwidth consumption usually only
> has a marginal impact on overall service costs, to the point that
> creating the accounting and billing systems to handle the difference
> usually isn't worth it.

Yes. Transmission cost would be fixed and cover the cost of delivering
the first bit, consumption cost would be variant and cover the cost of
adding capacity, this is the model for electricity in some markets and
I think it's a great model. In some markets transmission you can buy
only from one player, depending on location, but consumption you can
buy from anyone.

--
++ytti
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Saku Ytti wrote on 24/07/2020 14:36:
> Yes. Transmission cost would be fixed and cover the cost of delivering
> the first bit, consumption cost would be variant and cover the cost of
> adding capacity, this is the model for electricity in some markets and
> I think it's a great model. In some markets transmission you can buy
> only from one player, depending on location, but consumption you can
> buy from anyone.

yep, that works fine for electricity because the cost of generating
electricity is a significant percentage of the amount that the end user
pays. I.e. the marginal cost is significant, so it's worth billing per
kWh. If this model had been a better way of charging for residential ip
data delivery, it would have been deployed a long time ago, but the
marginal cost per bit isn't worth it in the majority of cases because
the cost of mass billing is so high.

Nick

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On Fri, 24 Jul 2020 at 16:52, Nick Hilliard <nick@foobar.org> wrote:

> yep, that works fine for electricity because the cost of generating
> electricity is a significant percentage of the amount that the end user
> pays. I.e. the marginal cost is significant, so it's worth billing per
> kWh. If this model had been a better way of charging for residential ip
> data delivery, it would have been deployed a long time ago, but the
> marginal cost per bit isn't worth it in the majority of cases because
> the cost of mass billing is so high.

I've had few upgrades since LS1010+VXR network and there is a
statistically relevant correlation to more bandwidth demand related to
the upgrade cycles. If you remove the heavy users, you can skip entire
cycles, putting your CAPEX in 50%, 33%, 25% of less of what it is.
Also your wave and transit costs decrease rapidly over time, as they
become cheaper faster than your user traffic increase, if you
cherry-pick the lowest 70% users.
Consumption is a significant cost driver.

--
++ytti
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On Friday, 24 July, 2020 14:52, "Nick Hilliard" <nick@foobar.org> said:

> yep, that works fine for electricity because the cost of generating
> electricity is a significant percentage of the amount that the end user
> pays. I.e. the marginal cost is significant, so it's worth billing per
> kWh. If this model had been a better way of charging for residential ip
> data delivery, it would have been deployed a long time ago, but the
> marginal cost per bit isn't worth it in the majority of cases because
> the cost of mass billing is so high.

Not forgetting the cost of billing *disputes*.

It's been a couple of decades since I worked in residential Internet, but when I did, if the customer called you, ever, for any reason, the contract was essentially running at a loss. I can't imagine margins have got better...

Regards,
Tim.


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Saku Ytti wrote on 24/07/2020 14:56:
> I've had few upgrades since LS1010+VXR network and there is a
> statistically relevant correlation to more bandwidth demand related to
> the upgrade cycles

For sure, everyone's bandwidth consumption has increased over the years
and that's what's driven backhaul and last mile upgrades. Even Granny
uses Netflix these days.

None of these usage patterns would have been significantly impacted by a
change in billing model in the longer term because the marginal cost per
bit is low enough that any organisation attempting to charge per bit was
undercut / outmaneuvered by other organisations who didn't. It's only
on very high cost services like airline IP that you end up paying per
bit, but that's because it's pretty expensive to deliver that service to
start with.

In the very early days of internet commercialisation, there was a case
for per-use billing, but that was when people were using IGS for core
and blended costs per meg for ip transit were hovering around the $250k
mark, i.e. a not-insignificant portion of an organisation's annual
turnover. I was very happy to configure "no ip accounting". And
disable the per-connected-time accounting scripts for the dialup pool
(€12.30 per hour in 1992, if you were wondering. POTS charges not included).

> if you cherry-pick the lowest 70% users.
This is the cost / billing model that most last-mile access providers
use: send acceptable-use reminders to the top 0.5% of users rather than
getting excited about the other 99.5% who are already costed into the
model. Then make your service quality reasonable enough that people
don't ever need to call support.

Nick
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On 24/Jul/20 15:24, Nick Hilliard wrote:

> There are areas where licensing can make sense, but agreed that most
> implementations are awful. The case in hand here is akin to having a
> chainsaw constantly threatening to cut the branch your business is
> sitting on unless you actively stop it from doing so. If other people
> want to build and operate networks on this sort of premise, then they
> are welcome to do so and I will cheerily wish them all the best.

They'll be happy to see the back of our necks. Or not. Who cares :-)...

Mark.
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On 24/Jul/20 16:43, tim@pelican.org wrote:

>
> Not forgetting the cost of billing *disputes*.
>
> It's been a couple of decades since I worked in residential Internet, but when I did, if the customer called you, ever, for any reason, the contract was essentially running at a loss. I can't imagine margins have got better...

Just like NMS's, 40 years of the Internet and we still can't bill as
easily as we should.

There is also a correlation between the types of customers that keep
your phones off the hook, and their contract value to you. In almost all
cases, that contract value is eroded after 10 minutes with them on the
phone, because soon, they will need a truck roll, or an escalation. Or both.

Mark.
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On 24/Jul/20 16:52, Nick Hilliard wrote:

>  
> This is the cost / billing model that most last-mile access providers
> use: send acceptable-use reminders to the top 0.5% of users rather
> than getting excited about the other 99.5% who are already costed into
> the model.  Then make your service quality reasonable enough that
> people don't ever need to call support.

I think the CRM people call it the "segmented model" :-).

The top 25% of the customers get all the bells & whistles, because they
are paying for that priviledge.

Mark.
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