Re: Re: VCC cost models .... (was Re: Limits on SVCCs)

["Charles J. Ludinsky" <[e-mail]>]

Let's pursue the argument that the routed solution is less expensive than a
cut-through solution to its (perhaps) logical conclusion, assuming status quo
on service pricing for the Internet and for telco provided services.

Assume the following: (1) all of the features/services planned for the Internet
are implemented, especially quality of service features; (2) backbone
bandwidths are continually increased to meet demand; and (3) service pricing
remains more or less the same.  Then, one might argue, we will see businesses
migrate services such as video teleconferencing and voice telephone from the
telco services to the Internet. After all, why should a business continue
providing such services over the more expensive, per call services provived by
the telcos when cheaper fixed rate services of equivalent quality are available
elsewhere?

But who provides the underlying transmission systems that support both the
switched telco services and the Internet?  And why would one expect those
providers to, in effect, subsidize one service in favor of the other?  Can the
telcos continue to price their services as they currently do in the face of
potentially large losses of customers to the (future) Internet?  

I agree with Joel's "different way of looking" at the issue.  Current service
pricing models are probably irrelevant and will change drastically as soon as
the Internet begins to offer significant competition.

Regards,
Chuck Ludinsky
[e-mail]

>  
>  >>The recent discussion has been suggesting that a cut-through would
>  >>"cost more" than a routed path across an NBMA fabric.
>  >>
>  >>Maybe I am looking at this differently, but it seems to me definitional
>  >>that a cut-through costs the same or less in real terms.
>  	[..]
>  >>There are many possible charging models for
>  >>IP service, and many possible charging models for lower layer service.
>  
>  There are possible models, and then there are existing models. I'm
>  not aware of any ISPs serving 'the masses' who charge users for
>  how many router hops their outbound traffic uses. I am aware of
>  lower link providers who charge based on the topological 'distance' of
>  the calls. Given such real models, minimizing router hops by
>  making a long distance call comes across as less than obviously
>  beneficial (financially) to the entity that was redirected to perform
>  the cut-through. Sure, it saves router hops, but if I as Joe User
>  can get my web pages either way, I dont care for the incremental charge
>  of this cut-through. 
>  
>  If anyone's done a deeper analysis already, and can release it,
>  perhaps we can start a FAQ on cut-through. I'd be happy to see
>  a more detailed argument refute this straw-man negative scenario
>  constructed above (but based on existing or deployable-in-the-time-
>  frame-of-NHRP charging models, of course).
>  
>  cheers,
>  gja
>  
>