[e2e] why fair sharing? ( Are we doing sliding window in the Internet?)

[Vadim Antonov]

On Sat, 13 Jan 2007, Dado Colussi wrote:

> I'm not sure I understand your point. Bob's paper describes  
> mechanisms to create an economic regulatory system where individuals  
> are required to pay extra for their unsocial behavior of causing  
> congestion. It is only a part of the economic landscape ISPs and  
> other entities operate and it is akin to the cost of causing  
> greenhouse gas emissions in real world. I don't see why ISPs couldn't  
> adjust congestion prices per customer in order to drive their system  
> to a resource allocation that would maximize profit in times of  
> congestion?
> 
> Dado


Dado - ISPs are not interested in reducing amount of traffic; quite 
opposite. It is their product, and as any producer they are interested in 
increasing volume - if you remember Econ 101, in the long term the 
profitability of all kinds of businesses tends to converge to the same 
norm. (Business segments with higher-than-average ROI attract more 
invenstments - and competition, thus reducing profitability; 
underperforming segments lose capital and consequently have less 
competitive pressure, thus allowing increase in profitability).

In the established markets, where the initial period of rapid growth (on 
the S-curve) is over, the only sustainable way to make more money and 
increase value of business shares is to increase volume.

So it makes no sense for ISPs whatsoever to penalize users for causing
congestion (thus reducing the demand). Instead, they want to encourage
users to pay more for bigger share of the network resources - the
congestion is their friend, if they can differentiate service (who would
pay for premium service when regular service is quite good?)

Also, congested network is the network operating at full capacity - 
meaning that there is no overinvestment.  If a provider has underloaded 
network it, basically, means that its business people made a mistake and 
overinvested (driving ROI - and share prices - lower).

--vadim