nelson@sun.soe.clarkson.edu (Russ Nelson) (06/21/91)
In article <WORLEY.91Jun21102706@sn1987a.compass.com> worley@compass.com (Dale Worley) writes:
Up until now, The Net has been like the Hippie Movement. We get a
great playground, while businesses and the government pay for it. The
trouble is that The Net is not just a plaything anymore. If we want
to have it become an "information infrastructure" for the country,
it's got to grow much, much larger than it is now, and it won't be
able to live as a parasite. It's got to go commercial, and that means
that people are going to have to pay for their usage.
You mean we don't pay for it now? Does that mean somehow we're not paying
$20,000/year to NYSERNet?
Ahhhh, you mean pay-per-usage.
set Pontification-mode=on
When a shared resource is not being overused, flat rates work fine.
People prefer flat rates. When that resource becomes scarce,
either the flat rate must rise to increase the resource, or
pay-per-usage becomes necessary. The timing of the transition
from flat rates to pay-per-usage is difficult.
Whole books have been written to explain the previous paragraph, so I
don't expect you to absorb it all at once.
set Pontification-mode=off
Now, when you decry those who think information should be free, you
are partly saying that you don't like flat rates. That's fine, but I
think you'll find yourself in the minority.
--
--russ <nelson@clutx.clarkson.edu> I'm proud to be a humble Quaker.
I am leaving the employ of Clarkson as of June 30. Hopefully this email
address will remain. If it doesn't, use nelson@gnu.ai.mit.edu.worley@compass.com (Dale Worley) (06/24/91)
In article <NELSON.91Jun21110142@sun.clarkson.edu> nelson@sun.soe.clarkson.edu (Russ Nelson) writes:
You mean we don't pay for it now? Does that mean somehow we're not paying
$20,000/year to NYSERNet?
Well, you are probably paying $20,000/yr, but that probably doesn't
cover the fraction of the backbone that you're using. What is the
total budget of the backbone?
Ahhhh, you mean pay-per-usage.
Not necessarily.
Whole books have been written to explain the previous paragraph, so I
don't expect you to absorb it all at once.
I'm glad to know that you think so highly of me. In fact, the point
you make is pretty obvious and is referred to in about a thousand
articles in the popular press on such topics as air pollution,
land-use management, and transportation policy.
Now, when you decry those who think information should be free, you
are partly saying that you don't like flat rates. That's fine, but I
think you'll find yourself in the minority.
Well, as far as flat rates go, I seem to remember that the Internet is
perennially plagued by over-utilization. Or perhaps the most recent
upgrade to the backbone capacity (paid for by NSF) has solved that
problem for all times...
On a more subtle level, flat rates have an interesting effect -- they
price small users out of the market. For instance Clarkson can afford
$20k/yr for network access, but my company can't, because it only has
50 employees. (See "barriers to entry" in your Econ book.)
--------------------
Unfortunatly, you're missing my central point. (Although that may be
because I didn't explain myself well.) The question isn't the payment
for *communication capacity* but payment for *information*. The
expensive part about comp.archives is not *distributing* the
information in it, it is *creating* that information. And while
technology will make the distribution ever cheaper, the creation will
never become cheaper (relative to the average person's income).
We need to start considering how to efficiently pay people for
creating information, if we're going to have increasing amounts of
useful information created. Fortunately, we have certain
possibilities available to us that have not been available to people
before. For instance, in many businesses, the costs of advertising
and billing consume a large fraction of the customer's dollar, leaving
very little money to pay for the creation of the product the customer
wants. This is inefficient, in the economic sense -- the customer
pays far more for the product than the producer demands to produce it.
With an electronic network, it is possible that the process of billing
could be 100% automated. (For instance, each query to the database
charges your credit card 1 cent.) If the infrastructure of billing
for small transactions were well-developed, it is possible that 90%+
of the customer's dollar could go to the producer.
An example of how this works is the long-distance telephone business,
where calls are remarkably cheap, even though they are billed
individually, but ATT, MCI, and Sprint are making serious bucks
anyway...
Dale
Dale Worley Compass, Inc. worley@compass.com
--
Q: Why does Internet raise issues of academic freedom and free
speech?
A: Anything you can write publish, broadcast, or yell from the
top of a building, Internet can propagate further, faster, more
elegantly. Thus, age-old issues of freedom of speech and
expression vs. public safety and moral sensibilities have moved
into this high tech arena. -- Joe Abernathy
[And in an intensified form.]