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Pricing and Internet Architecture

Frisky070802 writes "The Politech list recently posted a pointer to a new paper (pdf) by UMN prof Andrew Odlyzko, which compares the telecom industry to the historical transportation industry (railroad, bridges, and such). One quote, from the conclusion, is particularly interesting: '... the networking industry [has] devoted inordinate efforts to technologies such as ATM and QoS, even though there was abundant evidence these were not going to succeed. One can go further and say that essentially all the major networking initiatives of the last decade, such as ATM, QoS, RSVP, multicasting, congestion pricing, active networks, and 3G, have turned out to be duds. Furthermore, they all failed not because the technical solutions that were developed were inadequate, but because they were not what users wanted.'"

17 of 225 comments (clear)

  1. 3G a dud? by SinaSa · · Score: 4, Informative

    In traditional /. style, I havn't read the article, so I don't know how this guy can already claim 3G as a dud. Here in Australia, Hutchison is doing fairly well, almost all of their handsets sold out within a couple of months of opening their "Three" stores and I'd say thats a pretty big indication of being exactly "what users wanted".

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    1. Re:3G a dud? by TheRaven64 · · Score: 4, Informative

      I recently looked at getting a 3G phone here in the UK. The only operator (as far as I know) that offers them is imaginatively enough called `3'. All of their price plans are geared towards people who want to use video features, and make calls. Not only do they not offer any kind of plan aimed at people who just want to be able to send data, I couldn't even find out how much it would cost /MB. I can't help thinking that the biggest market for this kind of thing in the short term is going to be people who need to be able to connect to the 'net on the road, but so far these people have to use GSM/GPRS.

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    2. Re:3G a dud? by rsborg · · Score: 4, Informative
      Isn't it effectively flat-rate pricing when they give you X minutes for Y dollars a month? Most people pick a plan that gives them more minutes than they'll use, so they never incur the overage charges.

      No, Flat rate, means there IS no overage. Flat rate is usually synonymous with "unlimited usage" (tho lots of ISPs have their own ideas about what "unlimited" means). Flat rate service is like your local calling plan from your RBOC (unlimited local calls for a fixed price), or for example, as the article states, cable/DSL providers who charge fixed monthly fees for effectively unlimited bytes. X minutes for Y dollars is by no means flat rate. Overage exists, and most mobile users have been burned by it.

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  2. telling the user what it is by UnderAttack · · Score: 4, Informative

    One issue is that companies do not tell users what they are actually buying. Users do not want to buy "GPSM" or "3G" or "ATM". They want a fast network for a good price. Somehow companies have to tell them just that.

    For example, here in the US 3G services are sold by AT&T as "MWave" and Sprint as "Vision". Neither vendor actually explains users why they want these services.

    On the other hand, Verizon is doing pretty well by just simply explaining users that they provide clearer calls /better coverage. Users don't care that part of the trick is 3G and such.

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    1. Re:telling the user what it is by Anonymous Coward · · Score: 1, Informative

      Gentlemen, hold your horses. You ought to check the definition of 3G from http://www.3gpp.org/. What US operators call "3G" is just 2G GSM/GPRS branded as "3G." However, relatively speaking US operators are correct. When compared to US wireless patchworks, those 2G GSM/GPRS networks are so much advanced that can be called "3G." US only, though.

  3. ATM is a dud? by cavebear42 · · Score: 3, Informative

    DSL is a form of ATM. I don't know if I would call that a "dud". I agree that we were hoping to move all forms of notworking to ATM and that didn't pan out, but still is one of the widest forms of notworking currently in use.

    1. Re:ATM is a dud? by sxpert · · Score: 3, Informative

      yeah, atm is used for DSL only to link the modem to the provider because the transport operator's network is atm based for some reason. ATM in itself is not useful in this context, and eats up to 10% of the available bandwith with pure non-necessary overhead

  4. It's the sweeteners that are selling 3G by dbIII · · Score: 4, Informative
    Here in Australia, Hutchison is doing fairly well
    Mobile call pricing in Australia is set very high, and the 3G phones have a price cap - once you go beyond a certain number of calls you don't have to pay any more charges. There have been serious technical issues with Hutchison's 3G network - lot's of dropouts, no-one getting any sound for hours in some exchange areas, people being able to recieve but no send etc. Whether this comes down to lack of resources, bad planning, poor implementation or the actual hardware isn't clear yet from the stories on the issue. Perhaps they just oversold the service and are getting serious congestion problems?

    They're also selling it like phone sex - the posters each have a photo of a person not wearing much and the line "Call me" in big letters - funny really.

    1. Re:It's the sweeteners that are selling 3G by SinaSa · · Score: 2, Informative

      I think you'll find that pretty much all cellular providers had similar problems to the ones you described when they started up. If you look at the 3g forums for australia, youll notice the complaints on things like that have dropped significantly, as time has gone on.

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  5. ATM... by An+Anonymous+Hero · · Score: 2, Informative
    the networking industry [has] devoted inordinate efforts to technologies such as ATM and QoS

    The paper seems quite light on the subject ("ATM" only occurs twice)...

    but indeed Marconi sank billions of cash into it.

    Not everyone was happy ;-)

  6. HOWTO: Write a stupid paper by jd · · Score: 5, Informative
    • First, pick a technology that has never been seriously deployed. It greatly helps if none of the readers have any practical, real-world experiences with the subject.
    • Second, always compare with an only marginally related industry or discipline. There has to be enough of a connection to convince the readership, but not enough of one to disprove your preconceived notions.
    • Third, Always tell the audience that they have The Right Thing. It makes them happy. It also makes the usual sponsors of such work (the ones who run the status quo) very happy, too. Happy enough to pay you, for example.

    Seriously, multicaasting is enabled on most of the majopr backbones, but none of the major ISPs supply it - even to broadband customers - at any price. UUnet is one of the few that does. Their links aren't cheap, and from all accounts it can be very hard to get multicasting enabled, simply because a good number of their front-line support people don't know anything about it.

    QoS is likewise serioulsy hindred. Oh, it's used in the field. The transatlantic link between the UK and the US has CBQ (Class Based Queues) enabled to maximise the throughput of important traffic, simply because there's so much.

    Britain's JANET network has a highly extensive network of web caches. The theory being that one of the biggest loads on the transatlantic link is web traffic, and that the same site is often accessed repeatedly (eg: for University coursework), so that the most efficient solution is to cache everything.

    While not strictly "QoS", caching can reduce access times for a web page at peak time from maybe an hour to down to 15 seconds, whilst also massively reducing the load on the network.

    RSVP is a different case. That is known to not scale well over very large, complex multicast networks. (Too much overhead.) However, it is great for local networks, and I'm sure that it will gradually filter its way into Universities and mid-sized corporations, where videoconferencing is useful but bandwidth issues make it impossible to do without some QoS.

    ATM is used by many xDSL companies, as it is a very efficient way to run a fixed-point to a fixed-point. To say it's not used is absurd and shows a degree of ignorance. It's also very popular in Europe, where people perhaps put a little more investment into infrastructure.

    Quick note: I'm a little irritated by hearing some American politician label maglev trains as "sexy science fiction" and "stupid". To me, it's part of a worrying trend I'm seeing in all too much of the US, where there is an apparent phobia of making any actual progress in anything. To me, progress is the certain bit. What happens to those who reject it - that's not so certain.

    How does this fit in? There's only so much bandwidth. Sure, Lucent is up to 3 Terabits per second, but with collapsing R&D funds and Lucent in enough of a financial mess, don't expect either a rollout, or a refinement, any time soon.

    That's the absolute upper cap. The real limit is much smaller. Backbone connections are probably not much more than four or five hundred gigabits per second. (That is to say, about the capacity of two or three hundred well-made Pentium IV-based PCs.)

    A relatively small Beowulf cluster could totally saturate a decent chunk of the Internet backbone. Most cluster-based computers, such as the Origin 3000 or the Altix 3000, with sufficient network links, could easiy max out the capacity of any part of the Internet, without much effort.

    Why isn't the technology used? Because the customer doesn't want it? The customer has never been offered it!! Very, very few customers even know about it!! And ISPs, in particular, are keen to keep it that way. There is much more money to be made from serving people badly, because the customer'll keep paying for improvements and/or support. The ISPs can gouge the more foolish for years

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    1. Re:HOWTO: Write a stupid paper by beezly · · Score: 2, Informative

      Britain's JANET network has a highly extensive network of web caches. The theory being that one of the biggest loads on the transatlantic link is web traffic, and that the same site is often accessed repeatedly (eg: for University coursework), so that the most efficient solution is to cache everything.

      Not any more it doesn't... webcache.ja.net passed away Dec 2002.
  7. Re:Exactly... by xigxag · · Score: 2, Informative

    The no carrier joke is quickly becoming a standard one.

    You're kidding, right? The "NO CARRIER" joke has been around much longer than the Natalie Portman joke. Hell, it's been around longer than Natalie Portman!

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  8. Re:Railroads... by Babstar · · Score: 2, Informative

    Try http://www.telephonetribute.com/

  9. Re:Railroads... by td · · Score: 3, Informative

    He might mean "A History of Science and Engineering in the Bell System", a series of many volumes. A google search reveals this link, which gives these isbns: 0-932764-07-X, 0-932764-06-1. I'm pretty sure there were 5 or 6 volumes in the series.

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  10. Re:Subscriber Fatigue: Right Features, Wrong Price by Ironica · · Score: 2, Informative

    For the cell phone, I would use the new services, but it is so hard to upgrade. I have to buy a new phone, sign up for two years, and maybe even pay an activation fee. What the hell do they think? That after several years of staying with the same company I am going renew a plan and then quit after a few months. They have to create a reasonable path so that old customer can migrate to thier new services.

    Have never had a problem upgrading with Cingular. Every 12-18 months, I wander into a convenient Cingular store, find out what new phone I can get for free, find out what the new bells and/or whistles are on the contract that has the same price as my existing one, sign a couple pieces of paper, pay the sales tax and nothing else, then take home my brand-new phone and, after charging it as the instructions say, pop in my trusty SIM card. Then the next day I find myself a new faceplate I can stand.

    In fact, anyone who *doesn't* upgrade their contract every year or so is paying way more for way less than they should be. If your service provider makes this too cumbersome, that's what number portability is for. ;-)

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  11. Unlimited service by Anonymous Coward · · Score: 1, Informative

    AT&T offers a $99/month plan on their GSM network, unlimited use, no roaming, no long distance.