nanog mailing list archives

Re: Question on 95th percentile and Over-usage transit pricing


From: Ryan Malayter <malayter () gmail com>
Date: Thu, 22 Sep 2011 10:31:34 -0700 (PDT)



On Sep 22, 12:54 am, PC <paul4... () gmail com> wrote:
An optimal solution would be a tiered system where the adjusted price only
applies to traffic units over the price tier threshold and not retroactively
to all traffic units.

I have seen a more "optimal" scheme about 15 years ago. Pricing was a
smooth function, but it was for software licensing, not networking.

As I recall, their scheme went something like:
invoice_amount = some_constant * (quantity)^0.75

This seemed smart to me. It gave the customer incentives to invest
more, but also got rid of silly discontinuities that would cause
irrational customer and salesperson behavior.

Has anyone seen something similar in the service provider world? All I
ever see are arbitrary step functions.


Current thread: