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Re: cost of residential ISDN (fwd)

  Marty Tennant writes:
  > ...
  >>Congestion costs are social costs that a user imposes on others based on 
  >>their usage.  For example, if I am a heavy user and tie up the switching 
  >>fabric, then I can cause blockage of other users.  The congestion cost is 
  >>the cost of unrealized usage.
  >>Jeff Mackie-Mason and Hal Varian have written an excellent intro paper on 
  >>this theory.  It is available from their web site as well as in the IEEE 
  >>Journal on Selected Areas in Communication (September or October 1995).
  >>Martin Weiss
  >> ...
  >Martin, this holds true in a network that has the potential for bottlenecks.
  >Unless contradicted by someone with direct technical knowledge, I contend
  >that current ISDN switches, from Nortel, AT&T or whoever, are non-blocking
  >switches.  This does not allow for blocking within the immediate switch.
    There may also be some models which are "virtually non-blocking", and
  some which are installed in configurations which can't supoort as much
  use as might be thought from the specs.  But the bottom line which I see
  is that the blocking bottleneck has been removed almost completely from
  the importance which it once had.
  >If you are speaking about interoffice trunking of ISDN calls, then there
  >*is* a potential for heavy users tying up the connections between the
  >central offices.  In most large cities, there are sufficient fiber optic
  >connections between all CO's that this isn't a problem.
    But there still can be a cost attributable to this heavy usage - in
  that smaller trunks could have been installed if less usage was
  anticipated.  However these trunks are typically high capacity fiber -
  i.e., they are very cost-effective and don't contribute much to cost.
  >So I'm not sure your congestion costs are a real problem in the real world.
    I'd like to suggest that "problem" is not the correct measurement -
  but that we should focus on "how much" of the cost is reallly usage 
  dependant.  My suspicion is that it is reasonably low for ISDN.  None
  of us would be objecting to usage charges if they were 0.01 cent/minute.
  I think that we are objecting to the high proposed usage charges because
  we think that they are based on "value to the buyer", rather on the
  (reasonable) "cost to provide" - such a difference is a hallmark of 
    The work by Jeff Mackie-Mason and Hal Varian (U. Mich) covers these
  topics, and is worth serious consideration.  They are economists who
  have decided to look at data communications very seriously.  Look at URL
  http://www.ipps.lsa.umich.edu/ for more info.
  --henry schaffer