While I'm not sure if either of these would qualify under an "open source movement," they seem to uphold many of those ideals
There was a paper, Coase's Penguin. The author considered "open source" a subset of what he labled commens-based peer-production. Other examples he included in the paper are the NASA clickworkers, wikipedia, ODP, and even slashdot.
It is an interesting read. However, it is not light reading. It is a 70+ page article that was written for the Yale Law Journal by an economist.
It does not say "ONE", it says "another", and it doesn't say anything about "backups".
Thanks for the link. I was doing it from memory so the "one" probably came from me muddling with some EULAs which give permission for only one.
As for the backups, it limits it "copies" for two purposes: copies "created as an essential step in the utilization of the computer program" (117(a)(1)) and copies which are "for archival purposes only" (117(a)(2)) aka backups.
I'm looking at the boxes of three pieces of software. . . right now - there is nothing on them that says this.
If there is no lable on the box, it is definately a purchase. It was on the software in the ProcCD case. The ProcCD case would probably have had a different outcome if it hadn't been. Out of couriousity, I dug out my old Windows software and checked them. Everything from Microsoft has them. None of the games do. The non-microsoft apps are spotty. Some do, some don't.
Going by Judge Easterman's opinion, I would say that you are not bound by any EULA that that comes with software without the label.
Even MD, which passed UCITA, requires the label on any mass-marketed software in order to consider the EULA a binding contract.
I'd have thought that handing over money for a box with a CD in it implies purchase of the software.
I would have to. Unfortunately, Judge Easterman did not agree. He placed great weight on the "Refund Clause" in the EULA. It was never under judical notice that it is nearly impossible to get the refund since the defendant never tried. Another problem the defendant had was that he purchased the same software with the same license the previous year.
The good news is that not all courts accept Judge Easterman's logic.
This means that Microsoft have forgiven me for pirating it, and allowed me some use of the software.
Interesting spin. The next time I am bored, I will read an EULA to see if they stuck in some clause to cover this.
It is, however, true that terms in a contract that are generally opposed to the public interest are voidable in court _if_ they occur in a contract of adherence
Actually, courts can void clauses of any contract on those grounds. The NDA clause in other contracts is limited to trade secrets. Something the courts also feel is in the public interest. The clause in the EULA only acts to prevent the consumer from getting objective information about their potential purchases.
If copyright law does permit you to copy the software to memory, and store a permanent copy onto a hard disk,
Copyright law explicitly gives the lawful owner of a copy of software the right to use and make one backup copy without the permission of the author.
typical EULA is a requirement to surrender certain rights in exchange for the software removing a block that prevents your legitimate use of a piece of software.
It is a more obtuse than that. The software company is alleging that you did not buy the software, only the license to use it. That is why there is a little fine-print box on every software package stating "You must agree...". Otherwise, it would be an outright purchase.
Judge Easterman, the judge who upheld EULAs in ProCd, noted that it is possible to lawfully acquire the software without being bound by the EULA. The example he gave was "finding it on the street". Since it is abondened property, you are now the lawful owner of the software and are not bound by the EULA.
Also, there is a clause buried in the EULA that says you do not own the media or the software. The software company does. You only purchased the license to use the software.
Another example: today, I received an MSN CD in the mail. The next time I boot into windows, I will have to see if there is an EULA with a similar clause. If so, Microsoft is implicitly admitting that the clause is a legal fiction. The courts have already ruled that anything that is arrives in my mailbox addressed to me is my legal property. I did not enter into a previous agreement with the sender since I never requested it. The copy of software is mine with no strings attached. I can violate any or all of the clauses as long as I do not violate copyright law itself.
isn't "a meeting of the minds" an essential aspect of a contract?
That is one of my objections to EULAs. Even my lawyer, who lives in MD which passed UCITA, doesn't read them because "there are too many of them". Although he would never sign a contract without reading it.
I suspect that they are designed to discourge people from actually reading them. Don't put a printered version in package. Disable the ability to print it. Put a multipage contract in a little scroll box that only shows 6 lines at a time. Use monotype and heavy leagelese.
And aren't there exceptions made in contract law when the parties have "unequal strength", or some such thing?
There are; but, I am not sure what the test for it is. All the cases that challenged them on "material modification of the original contract" grounds. The defendant in the ProCD case unsuccessfully argued that the purchase was the original contract. In Stepsaver, they successfully argued that the Purchase Order was the original contract. In a CA case, they are arguing that there is not contract because they did not run the software or click on "I Agree".
Regardless of the reasoning of the judge, the wording was clear.
That is because you are missing the point of the case. This is not a continuation of the contract dispute between them. This is a seperate action that is brought under antitrust law, not contract law. The actual settlement reached in the contract dispute is not relevant to this case.
You seem to feel that this case somehow "violates" the settlement agreement. It does not since the settlement agreement explictly retained the right to sue again under antitrust law. Microsoft agreed to it. You can't cry "foul" now that Sun is excersing the option.
You sued MS to stop distributing it in the first place!
Actually, they didn't. They sued because Microsoft violated the contract. They would have preferred that Microsoft lived up to the contract. One of the reasons they agreed to the settlement they did was that they knew they could come back at a future time and sue them again on antitrust grounds. Had Microsoft insisted they waive that right, Sun would have asked for more in the original settlement.
I've read the settlement quite thoroughly thank you.
If you did, you would have noticed that it settled all claims between Microsoft and Sun except the antitrust ones. When Microsoft signed off on the settlement, they knew Sun could come back and sue them on antitrust grounds.
Notice the word "allowed" MS was under no legal obligation whatsoever to distribute their version for the full 5 years.
You should read the Judge's opinion to understand his reasoning. When java came out, Microsoft knew it would be a threat to their Window monopoly. However, they had nothing to compete with it. So they entered the contract in order to "pollute" (Microsoft's word, not mine) jave. They added extensions not contained in the spec and their development tools automatically used those extenstions without informing the developers that the resulting code would only work with the windows JVM.
Microsoft achieved their goal.
They were able to slow down the adoption of java's acceptence until they couldd come with.NET to compete with Java.
seems that the decision gives a license to Congress to extend copyright term indefinitely, so there will be an effort within the next 20 years to make another extension. We can oppose that politically.
If the SCOTUS ruled that it is constitutional for Congress to retroactively extend copyright, wouldn't it also be consititutional for congress to retroactively decrease the term?
Everyone who disagrees with the extension should immediately write their Senators and Representatives explaining their dislike of the extension. They should put their Congress Critters on notice that they will vote against any one who does not work to roll back the extension.
As for bnetd, their server was shut down due to violations of regular old copyright law in addition to DMCA violations. All the DMCA did here was keep Blizzard from being allowed to sue the ISP.
Have you read the complaint? (it is available at EFF? The DMCA plays a big part of it and they are using it to go after both the ISP and writer of the software. The large portion of their complaint is that the bentd servers do not check for a valid CD key.
As for your third link, I think it's quite a stretch to say that the DMCA is responsible, since the DMCA does not even apply.
It isn't a stretch since the letter threating Felten specifically cited the DMCA.
Without the DMCA the RIAA just would have threatened to sue under some other law.
Am I correct, that when using the word "speech", you have broader meaning in mind?
Yes, the Right to Free Speech includes any communications that convey a message. This is not limited to the spoken word. It includes writings, paintings, and even actions like burning a draft card.
isn't libel and slander protected by the first amendement?
No. Libel and slander are deliberate lies to hurt a person. However, libel and slander are not easy to prove. You must not only prove that the statement is false; but, that the person making it knew it was false. And, you must show that you have been harmed by the statement.
no one is prohibiting them to say what they want.
Actually, they are. The activist is using a law that only applies to corperations. The activist is saying that since Nike "lied" they should be sued. However, the activist can legally lie as long as it is not slander or libel.
I deliiberately used the word "sign". I don't consider EULAs a binding contract. Even the courts are divided on this question. Unfortunately, I live in Maryland and the legislature doesn't agree with me.
For the printer companies, allowing third party inks in means that they have to do the hard part including formulating the inks and then someone else picks up the profit without having to make any of that investment.
RTFA! This case has nothing to do with ink, per se. Nobody is arguing that Lexmark has to give their ink formula or specs to compeitors. It is about whether Lexmark should be guarenteed a government enforced monopoly in Link replacement cartridges for Lexmark printers.
I think they do.... any printer I've bought always says "Use only HP model 644 Brand Cartridge Replacement". It's not HP's responsibility to remain compatible with other brands of printer cartridges. Is it Apple's fault if you go out and buy a new sound card that states it's mac compatible and it isn't?
Your arguement is totally irrelevent to the case. It isn't about a competitor suing Lexmark because they keep changing the cartridge. It is about Lexmark suing to shut down a competitior.
I know many companies engineer the cartridges to fit their printer in just such a way as to provide the best image. Recylers make the cartridge just to fit, and most of the time they don't provide a good image, or start to drop toner after a few hundred images, etc.
Isn't that a choice for the consumer rather then the manufacturer? If the consumer cares more about price then quality, shouldn't he be allowed to make the tradeoff?
It certainly was a little wierd to have to agree to an EULA for a piece of hardware.
Expect more of it. Klocek v. Gateway, Inc. and Hill vs Gateway, Inc., dealt with the "shrinkwrap" that comes with Gateway computers. Although both had similar facts (they questioned the "mediation clause") they reached opposite conclusions. Hill said they were binding contracts. Klocek said they weren't.
Only if you signed a contract with Ford that stated you would only buy their tires. Otherwise, you own the car and have the right to use whatever tires you want.
I don't have a problem with Lexmark making it technically difficult for competitors. I do have a problem when they use copyright, a government enforced monopoly on the software, to extend that monopoly into another market, i.e. the ink cartridge replacement market.
Now, you don't own a name, you just have rented its excusivity for some time.
Let's follow this line of reasoning to its logical conclusion. If you are only renting the use of the name, the "seller" of the service has the right to not renew the contract or change the price based on the popularity of the domain name. Network Solutions could tell Time magazine that they are now charging $10,000 per year instead of the $35 we charged you last year.
Domain names are similar to trademarks. Web site owners may invest a lot of money promoting their web sites. As it become more valuable, the registars can extort more money from the web site owners. This "extra value" is not based on anything the registrar did; but, what the domain holder did.
Has anyone ever audited the operation costs of an ISP and see what the true costs are? Dose it really save them money if they place caps on users bandwidth? Of course, if everyone was a bandwidth hog, we would be lagged to hell. So this leads me to think that the reason why they impose caps, and penalty fees, is because they KNOW their network can't handle excessive traffic. And the reason is because they overbook, which was discussed before.
If you want T1 speeds without a cap, you can get it. It is called a dedicated line. It will only cost about $1,000/month.
Too expensive? You have too choices. Either get a lower bandwidth cap or pay with a traffic cap. You apperantly want to get a dedicated T1 for the price of a DSL, which is why so many DSL providers have gone belly up.
It seems their systems are very keen on noticing when one over-uses their alloted bandwidth, but why don't contracts give refunds or credits when your throughput slows to a crawl?
They do. It is called SLAs (Service Level Agreements), however, they also cost more.
I can guarantee you that the cost is not minimal since we HAVE to have enough circuits on stand-by so you crappy non-forecasting ISPs can order them with a 3-day turn-around.
ROTFLMAO! If that is a true statement, you sure as hell don't work for Verizon! Frame Circuits take 3 to 6 weeks to install. The first time I ordered a PRI, they wouldn't give me an install date. They said all the circuits were filled and couldn't predict when addictional ones would be installed. Could be one month. Could be six months. Could be a year.
The last PRI I ordered took 5 days for them to return the call.
And, if I have a billing question, forget about it! The last time I had a billing question, it took over a month to talk to someone who could answer my question. Every time I called, I would get transfered to three or four different people before getting dumped into voice mail.
The situation with internet bandwidth may be a bit more complicated by fact of the matter is that it's an industry where things are unsettled and changing rapidly, both from an economic and regulatory point of view so making predictions is likely to be a lot riskier.
Good analogy and good points. Power companies know the cost of building a power plant of any particular size. The trick is to estimate the capacity required. Build one too large and you have to pass the cost of the unused capacity onto your users. Build one too small, and you have brownouts and blackouts. ISPs can also calculate the exact costs associated with supplying bandwidth.
There are several differences between the two industries. One is that most power companies are government regulated industry. If they guess too high, they can pass the cost of the unused capacity directly along to the users. The only choice the user has is to pay the higher costs or reduce their use of electricity. They can't switch providers. If they guess too low, the consumer has to put up with the brownouts until more generating capacity can be built.
ISPs don't have that luxury. If they guess to high, they have to eat the cost of the unused capacity since their users can easily switch to cheaper providers. Guess too low, and they lose customers to providers that aren't maxed out.
It's the unsettled nature of the business that makes predictions difficult.
This is true in both industries also. I am sure that the power companies calculations were shot to hell when air conditioning, TVs, etc were introduced. The advantage the power companies have is that they are stictly usage based. They will earn more money as people increase their usage.
ISPs pricing is a mix of flat rate and usage based pricing. The flat rate portion is based on the "average user". When something occurs to change what the average user consumes, the ISP has to eat the cost of the additional usage until they can adjust their prcing plans. Due to the compeition, it is not as easy for them to increase their costs.
DSL is an example of this. The original pricing models were based on the assumption that residential users would download the same amount of traffic as they did when using dialup. They assumed that the only difference would be in the "burstiness" of the traffic. However, P2P made that assumption invalid.
Not sure I follow that reasoning; 1500 Kbps 1000 Kbps?
Typo. That should be 150 Kbps. What I was trying to say was that a customer who only uses 10% of the line will cost less outgoing bandwidth, due to the Law of Large Numbers, then one who averages 80% of the line.
"Burstable" is a marketing concept for part fixed, part measured.
That is nothing unique to the ISP industry. Rental cars do the same with a fixed daily charge plus milage charge.
The term "bandwidth" actually has two components: speed of the link and traffic through the link. The first is a fixed cost. It is the local loop fee that you pay to the telco to run the line from the ISP to the customer.
The latter is a variable cost due to the packet switching nature of the internet. A residential DSL or cable user who just wants faster down loads of their web pages require less upstream bandwidth then someone running a P2P server. A low usage web site requires less upstream bandwidth then a highly popular website even if they have the same network speed.
The burstable pricing allows the two costs to be seperate from each other.
it's important to understand that burstable models are more of a marketing concept than a network costing one.
I disagree. A T1 customer who only averages 1500 Kbps costs less then one who avereages 1 Mbps. An ISP can put about 5 of the former customers on one outgoing T1 while it could only have one of the latter customers on an outgoing T1 line.
Burstable pricing is a way to ration the outgoing bandwidth. The more you consume, the more you pay.
Do the larger ones set up networks then charge the smaller ones (like my ISP) for bandwidth which is then passed on?
Yes. Only the big boys have free peering between themselves. And, even they have costs associated with peering: cost of colocation at a peering point, bandwidth between the two service providers, etc.
Or do they have 'back and forth' arrangements where the ISPs only pay for the difference between in and out traffic?
Some do this. However, it has always been a hot button issue with ISPs. Some ISPs, e.g. UUNET, have a higher percentage of web servers. While others, e.g. Earthlink, have a higher percentage of users. Who exactly is providing more value to the other. Is Earthlink supplying the viewers to the web sites? Or, is UUNET supplying the web sites to the viewers?
Slashdot Mirror
There was a paper, Coase's Penguin. The author considered "open source" a subset of what he labled commens-based peer-production. Other examples he included in the paper are the NASA clickworkers, wikipedia, ODP, and even slashdot.
It is an interesting read. However, it is not light reading. It is a 70+ page article that was written for the Yale Law Journal by an economist.
Thanks for the link. I was doing it from memory so the "one" probably came from me muddling with some EULAs which give permission for only one.
As for the backups, it limits it "copies" for two purposes: copies "created as an essential step in the utilization of the computer program" (117(a)(1)) and copies which are "for archival purposes only" (117(a)(2)) aka backups.
I'm looking at the boxes of three pieces of software. . . right now - there is nothing on them that says this.
If there is no lable on the box, it is definately a purchase. It was on the software in the ProcCD case. The ProcCD case would probably have had a different outcome if it hadn't been. Out of couriousity, I dug out my old Windows software and checked them. Everything from Microsoft has them. None of the games do. The non-microsoft apps are spotty. Some do, some don't.
Going by Judge Easterman's opinion, I would say that you are not bound by any EULA that that comes with software without the label.
Even MD, which passed UCITA, requires the label on any mass-marketed software in order to consider the EULA a binding contract.
I would have to. Unfortunately, Judge Easterman did not agree. He placed great weight on the "Refund Clause" in the EULA. It was never under judical notice that it is nearly impossible to get the refund since the defendant never tried. Another problem the defendant had was that he purchased the same software with the same license the previous year.
The good news is that not all courts accept Judge Easterman's logic.
This means that Microsoft have forgiven me for pirating it, and allowed me some use of the software.
Interesting spin. The next time I am bored, I will read an EULA to see if they stuck in some clause to cover this.
Actually, courts can void clauses of any contract on those grounds. The NDA clause in other contracts is limited to trade secrets. Something the courts also feel is in the public interest. The clause in the EULA only acts to prevent the consumer from getting objective information about their potential purchases.
Copyright law explicitly gives the lawful owner of a copy of software the right to use and make one backup copy without the permission of the author.
typical EULA is a requirement to surrender certain rights in exchange for the software removing a block that prevents your legitimate use of a piece of software.
It is a more obtuse than that. The software company is alleging that you did not buy the software, only the license to use it. That is why there is a little fine-print box on every software package stating "You must agree...". Otherwise, it would be an outright purchase.
Judge Easterman, the judge who upheld EULAs in ProCd, noted that it is possible to lawfully acquire the software without being bound by the EULA. The example he gave was "finding it on the street". Since it is abondened property, you are now the lawful owner of the software and are not bound by the EULA.
Also, there is a clause buried in the EULA that says you do not own the media or the software. The software company does. You only purchased the license to use the software.
Another example: today, I received an MSN CD in the mail. The next time I boot into windows, I will have to see if there is an EULA with a similar clause. If so, Microsoft is implicitly admitting that the clause is a legal fiction. The courts have already ruled that anything that is arrives in my mailbox addressed to me is my legal property. I did not enter into a previous agreement with the sender since I never requested it. The copy of software is mine with no strings attached. I can violate any or all of the clauses as long as I do not violate copyright law itself.
That is one of my objections to EULAs. Even my lawyer, who lives in MD which passed UCITA, doesn't read them because "there are too many of them". Although he would never sign a contract without reading it.
I suspect that they are designed to discourge people from actually reading them. Don't put a printered version in package. Disable the ability to print it. Put a multipage contract in a little scroll box that only shows 6 lines at a time. Use monotype and heavy leagelese.
And aren't there exceptions made in contract law when the parties have "unequal strength", or some such thing?
There are; but, I am not sure what the test for it is. All the cases that challenged them on "material modification of the original contract" grounds. The defendant in the ProCD case unsuccessfully argued that the purchase was the original contract. In Stepsaver, they successfully argued that the Purchase Order was the original contract. In a CA case, they are arguing that there is not contract because they did not run the software or click on "I Agree".
That is because you are missing the point of the case. This is not a continuation of the contract dispute between them. This is a seperate action that is brought under antitrust law, not contract law. The actual settlement reached in the contract dispute is not relevant to this case.
You seem to feel that this case somehow "violates" the settlement agreement. It does not since the settlement agreement explictly retained the right to sue again under antitrust law. Microsoft agreed to it. You can't cry "foul" now that Sun is excersing the option.
You sued MS to stop distributing it in the first place!
Actually, they didn't. They sued because Microsoft violated the contract. They would have preferred that Microsoft lived up to the contract. One of the reasons they agreed to the settlement they did was that they knew they could come back at a future time and sue them again on antitrust grounds. Had Microsoft insisted they waive that right, Sun would have asked for more in the original settlement.
If you did, you would have noticed that it settled all claims between Microsoft and Sun except the antitrust ones. When Microsoft signed off on the settlement, they knew Sun could come back and sue them on antitrust grounds.
Notice the word "allowed" MS was under no legal obligation whatsoever to distribute their version for the full 5 years.
You should read the Judge's opinion to understand his reasoning. When java came out, Microsoft knew it would be a threat to their Window monopoly. However, they had nothing to compete with it. So they entered the contract in order to "pollute" (Microsoft's word, not mine) jave. They added extensions not contained in the spec and their development tools automatically used those extenstions without informing the developers that the resulting code would only work with the windows JVM.
Microsoft achieved their goal. They were able to slow down the adoption of java's acceptence until they couldd come with .NET to compete with Java.
If the SCOTUS ruled that it is constitutional for Congress to retroactively extend copyright, wouldn't it also be consititutional for congress to retroactively decrease the term?
Everyone who disagrees with the extension should immediately write their Senators and Representatives explaining their dislike of the extension. They should put their Congress Critters on notice that they will vote against any one who does not work to roll back the extension.
Universal v. Reimerdes.
Have you read the complaint? (it is available at EFF? The DMCA plays a big part of it and they are using it to go after both the ISP and writer of the software. The large portion of their complaint is that the bentd servers do not check for a valid CD key. As for your third link, I think it's quite a stretch to say that the DMCA is responsible, since the DMCA does not even apply.
It isn't a stretch since the letter threating Felten specifically cited the DMCA.
Without the DMCA the RIAA just would have threatened to sue under some other law.
Such as?
Yes, the Right to Free Speech includes any communications that convey a message. This is not limited to the spoken word. It includes writings, paintings, and even actions like burning a draft card.
isn't libel and slander protected by the first amendement?
No. Libel and slander are deliberate lies to hurt a person. However, libel and slander are not easy to prove. You must not only prove that the statement is false; but, that the person making it knew it was false. And, you must show that you have been harmed by the statement.
no one is prohibiting them to say what they want.
Actually, they are. The activist is using a law that only applies to corperations. The activist is saying that since Nike "lied" they should be sued. However, the activist can legally lie as long as it is not slander or libel.
I deliiberately used the word "sign". I don't consider EULAs a binding contract. Even the courts are divided on this question. Unfortunately, I live in Maryland and the legislature doesn't agree with me.
RTFA! This case has nothing to do with ink, per se. Nobody is arguing that Lexmark has to give their ink formula or specs to compeitors. It is about whether Lexmark should be guarenteed a government enforced monopoly in Link replacement cartridges for Lexmark printers.
Your arguement is totally irrelevent to the case. It isn't about a competitor suing Lexmark because they keep changing the cartridge. It is about Lexmark suing to shut down a competitior.
Isn't that a choice for the consumer rather then the manufacturer? If the consumer cares more about price then quality, shouldn't he be allowed to make the tradeoff?
Expect more of it. Klocek v. Gateway, Inc. and Hill vs Gateway, Inc., dealt with the "shrinkwrap" that comes with Gateway computers. Although both had similar facts (they questioned the "mediation clause") they reached opposite conclusions. Hill said they were binding contracts. Klocek said they weren't.
Only if you signed a contract with Ford that stated you would only buy their tires. Otherwise, you own the car and have the right to use whatever tires you want.
I don't have a problem with Lexmark making it technically difficult for competitors. I do have a problem when they use copyright, a government enforced monopoly on the software, to extend that monopoly into another market, i.e. the ink cartridge replacement market.
Let's follow this line of reasoning to its logical conclusion. If you are only renting the use of the name, the "seller" of the service has the right to not renew the contract or change the price based on the popularity of the domain name. Network Solutions could tell Time magazine that they are now charging $10,000 per year instead of the $35 we charged you last year.
Domain names are similar to trademarks. Web site owners may invest a lot of money promoting their web sites. As it become more valuable, the registars can extort more money from the web site owners. This "extra value" is not based on anything the registrar did; but, what the domain holder did.
If you want T1 speeds without a cap, you can get it. It is called a dedicated line. It will only cost about $1,000/month.
Too expensive? You have too choices. Either get a lower bandwidth cap or pay with a traffic cap. You apperantly want to get a dedicated T1 for the price of a DSL, which is why so many DSL providers have gone belly up.
It seems their systems are very keen on noticing when one over-uses their alloted bandwidth, but why don't contracts give refunds or credits when your throughput slows to a crawl?
They do. It is called SLAs (Service Level Agreements), however, they also cost more.
ROTFLMAO! If that is a true statement, you sure as hell don't work for Verizon! Frame Circuits take 3 to 6 weeks to install. The first time I ordered a PRI, they wouldn't give me an install date. They said all the circuits were filled and couldn't predict when addictional ones would be installed. Could be one month. Could be six months. Could be a year.
The last PRI I ordered took 5 days for them to return the call.
And, if I have a billing question, forget about it! The last time I had a billing question, it took over a month to talk to someone who could answer my question. Every time I called, I would get transfered to three or four different people before getting dumped into voice mail.
Good analogy and good points. Power companies know the cost of building a power plant of any particular size. The trick is to estimate the capacity required. Build one too large and you have to pass the cost of the unused capacity onto your users. Build one too small, and you have brownouts and blackouts. ISPs can also calculate the exact costs associated with supplying bandwidth.
There are several differences between the two industries. One is that most power companies are government regulated industry. If they guess too high, they can pass the cost of the unused capacity directly along to the users. The only choice the user has is to pay the higher costs or reduce their use of electricity. They can't switch providers. If they guess too low, the consumer has to put up with the brownouts until more generating capacity can be built.
ISPs don't have that luxury. If they guess to high, they have to eat the cost of the unused capacity since their users can easily switch to cheaper providers. Guess too low, and they lose customers to providers that aren't maxed out.
It's the unsettled nature of the business that makes predictions difficult.
This is true in both industries also. I am sure that the power companies calculations were shot to hell when air conditioning, TVs, etc were introduced. The advantage the power companies have is that they are stictly usage based. They will earn more money as people increase their usage.
ISPs pricing is a mix of flat rate and usage based pricing. The flat rate portion is based on the "average user". When something occurs to change what the average user consumes, the ISP has to eat the cost of the additional usage until they can adjust their prcing plans. Due to the compeition, it is not as easy for them to increase their costs.
DSL is an example of this. The original pricing models were based on the assumption that residential users would download the same amount of traffic as they did when using dialup. They assumed that the only difference would be in the "burstiness" of the traffic. However, P2P made that assumption invalid.
Typo. That should be 150 Kbps. What I was trying to say was that a customer who only uses 10% of the line will cost less outgoing bandwidth, due to the Law of Large Numbers, then one who averages 80% of the line.
"Burstable" is a marketing concept for part fixed, part measured.
That is nothing unique to the ISP industry. Rental cars do the same with a fixed daily charge plus milage charge.
The term "bandwidth" actually has two components: speed of the link and traffic through the link. The first is a fixed cost. It is the local loop fee that you pay to the telco to run the line from the ISP to the customer.
The latter is a variable cost due to the packet switching nature of the internet. A residential DSL or cable user who just wants faster down loads of their web pages require less upstream bandwidth then someone running a P2P server. A low usage web site requires less upstream bandwidth then a highly popular website even if they have the same network speed.
The burstable pricing allows the two costs to be seperate from each other.
I disagree. A T1 customer who only averages 1500 Kbps costs less then one who avereages 1 Mbps. An ISP can put about 5 of the former customers on one outgoing T1 while it could only have one of the latter customers on an outgoing T1 line.
Burstable pricing is a way to ration the outgoing bandwidth. The more you consume, the more you pay.
Yes. Only the big boys have free peering between themselves. And, even they have costs associated with peering: cost of colocation at a peering point, bandwidth between the two service providers, etc.
Or do they have 'back and forth' arrangements where the ISPs only pay for the difference between in and out traffic?
Some do this. However, it has always been a hot button issue with ISPs. Some ISPs, e.g. UUNET, have a higher percentage of web servers. While others, e.g. Earthlink, have a higher percentage of users. Who exactly is providing more value to the other. Is Earthlink supplying the viewers to the web sites? Or, is UUNET supplying the web sites to the viewers?