Internet Buzz with Richard Wiggins | 10
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| Volume 1, Number 27 | July 9, 1998 | Internet Buzz main page |
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Will You Pay for Bandwidth? The Berkeley INDEX Experiment |
 
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Vint Cerf recently told me in an interview that he thinks it will be pretty difficult to implement quality of service knobs that the user can tune dynamically -- say in the middle of a download. Do you agree? Yes. Even in our simulated QoS we do the adjustment at the TCP level, when the connection is set up. It seems that IP telephony has moved from the fringes, essentially either something like amateur radio, or a way to skirt telephone company tariffs, into something quite legitimate. Many Fortune 500 companies are looking to use IP telephony over their long-haul links, and all the major phone companies are embracing IP telephony as a service they'll offer end consumers. How will your research affect this growing marketplace? There's a lot of confusion among service providers. Should you pay for IP telephony on a per-minute basis, a per-bit basis, or using a flat monthly fee? We've got the technology to try out these different schemes and see what user reaction is like. A lot of users -- individual and institutional -- hate the idea of unpredictable costs. How will schools, libraries, and similar institutions adapt to a world of variable costs? Well, my phone bill, my electricity bill, my gas bill, etc., etc. all vary from month to month both at home and at work. I've learned to live with it. I can see the manager of a public lab being terrified that her users will always select the highest quality of service. It will be easy to restrict the QoS choices available to a particular user.You're an economist, and one of the basic tenets of your profession assumes rational behavior on the part of consumers and producers. Yet it seems consumers are not always rational when it comes to telecommunications. They pay $1.00 per minute while roaming on their cell phones while fighting to beat the dime a minute rate on home long distance. They pay 90 cents to call Dateline NBC just to participate in a poll. They use private pay phones that cost ten times the going rate for long distance. Will consumers really make rational choices if they're frequently asked which class of service they want? Well, this is one of the things we can test. One of the most interesting experiments will be to see how much people will pay to *avoid* having a meter running. Right now, about 40% of the population pays more for unlimited local calling than for metered calling. Will the same hold true for Internet users? Personally, I'm happy with ISDN at home. But my wife would like a T1 every Sunday to do videoconferencing with her son in Michigan. If we could choose our bandwidth on demand, both of us could be happy. Who will be the winners, and who will be the losers, if pay-for-quality-of-service is widely implemented? It depends on the QoS dimension that is charged for. If it is bits, those who transmit and receive large quantities of data will end up paying more. If it is congestion, those who use the net during congested times will pay more. Related LinksDr. Varian is an internationally noted author and lecturer on the subject of the information economy. He is the co-author of a forthcoming book, Information Rules: A Strategic Guide to the Network Economy (Harvard Business School Press, 1998), which explores issues business confront as they market their "ICE"  information, communication, and entertainment  products in the networked world. See these related sites: |
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Comments are welcome
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Created: July 9, 1998
Revised: July 9, 1998
URL: http://webreference.com/outlook/column27/index.html
