Transaction Based Settlements Encourage Waste (was Re: BBN/GTEI)

[Mike Leber <mleber () he net>]

On Fri, 21 Aug 1998, Bruce Hahne wrote:
> For every packet
> you have to determine a packet owner who is responsible for paying.  The
> owner could vary per application, per site, and/or per end user.  I could
> even imagine that responsibility for payment could be split between sender
> and receiver: 50/50, 90/10, choose your favorite.

If your split isn't 50/50 (in other words settlement free) I guarantee
anybody with half a brain will balance out their traffic by hosting the
correct type of applications so that you owe them money.

Repeated from my earlier post: Transaction based settlements will have the
effect of subsidizing one form or another of transactions, in this case
either requesting web pages or serving web pages, and clueful providers
will act accordingly to maximize revenue by hosting the appropriate
applications (for example a web crawler).

In fact, TRANSACTION BASED SETTLEMENTS ENCOURAGE WASTE to the point where
it should be obvious to the casual observer that anybody reasonably
informed would never suggest them. 

The factors that are the cause of the inherent problem with transactions
based settlements are: 

1) Either party can end up paying.
2) Transactions are generated by machines.
3) Machines can generate transactions which are either positive flow or
negative flow.  (web servers vs web crawlers as two simplistic examples).

Oh, and before anybody comes up with a simplistic (and flawed) rebuttal
such as banning the large web crawlers from settlements, there are plenty
of other legitimate automated methods of getting flows in either
direction. 

Mike.

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