Pricing the Internet

One common concern about pricing the Internet is that “poor” users will be deprived of access. This is not a problem with pricing itself, but with the distribution of wealth; we could ensure that certain users have sufficient resources to purchase a base level of services by redistributing initial resources through vouchers or lump sum grants. Indeed, total costs will be lower in an efficient network, so it will be less costly to meet distributional objectives than in an unpriced network.

Pricing the Internet

One problem with usage-sensitive pricing is the cost of accounting and billing. The cost would be astronomical if network providers were required to keep detailed accounts for every packet sent (comparable to call accounting by phone companies), because packets are very small units. However, the accounting load could be greatly reduced. First, … charges based on a statistical sample of packets sent might be acceptable. Second, if usage is priced only during congested periods, most packets need no accounting. Third, traditional phone company accounting systems, which seem like the natural comparison, may not be a good model. They are centralized and off-line; we think breakthroughs are likely in the area of in-line, distributed accounting, which will substantially lower costs.

Pricing the Internet

Although the cost of adding capacity is declining rapidly, we think it is very likely that congestion will continue to be a problem, especially as new very-high-bandwidth uses (such as real-time broadcast video) become common. It is becoming increasingly important to consider how congestion in networks such as the Internet should be controlled, and much work is needed.

Pricing the Internet

Some contemplated uses, such as real-time video and audio transmission, will lead to substantial increases in the demand for bandwidth, and congestion problems will only get worse unless there is substantial increase in bandwidth.

Pricing the Internet

The Internet is characterized by “the problem of the commons,” and without instituting new mechanisms for congestion control it is likely to soon suffer from server “overgrazing.”

Issues in the Development of Community Cooperative Networks

The future economic health of the United States lies squarely in our citizens’ ability to use telecommunications for productive ends. Telecommunications infrastructure investments must be matched with investments in citizen teleliteracy training and support for citizen innovations. The government’s biggest benefit from community networks will be the national tap on local innovations. Widespread grassroots innovations will be necessary for the potential of electronic delivery of government services to become reality and for our nation to be an economic leader in the information age.

Issues in the Development of Community Cooperative Networks

The government should be active in: Providing citizens friendly, low-threat opportunities to learn about verifiable networking benefits; Broadly sharing success stories that demonstrate the economic value of connectivity; Providing citizens free local access and mentored training in use of the on-line medium; Providing global telepreneurship training to the home via modem or other media; Providing public access computers and community learning centers to help all Americans in all communities prepare for survival in this transitional decade. Loaner laptop programs represent one feasible first step; Providing federal support for grassroots innovations to create the diversity of applications required for a successful NII; Soliciting citizens’ input regarding the NII to establish a sense of ownership, understanding, and a desire for participation; Advocate through government leadership ‘a national mission for citizen teleliteracy centered on community networking for the national good.

Issues in the Development of Community Cooperative Networks

If corporations do not see billion-dollar projects that promise large future profits, they may not support community innovation networks. Citizen input to federal decision making is necessary to assure that citizens’ best interests are not forgotten as the National Information Infrastructure begins to take form … If control of information represents power, resistance to making information more broadly available is to be expected. Incentives and ongoing evaluations for strategic partnering among federal, state, and local agencies is needed.

Issues in the Development of Community Cooperative Networks

Full Internet connections cost about $17,000/year for a dedicated 56 kb line, plus a one-time charge of $10,000 for the router and initial connection. A 56 kb line will adequately meet the low-end needs of most schools and many colleges. Price wars should begin steadily dropping prices. Full Internet connection is the option of choice, but realistically, if we all had full Internet connections tomorrow, it would take months or even years for most of us to begin to tap their real potential, resulting in a major waste of money for underutilized full access. In addition, as the Internet currently stands, it could not handle the additional load of all 83,000 schools and their communities jumping on the Internet all at once.

Issues in the Development of Community Cooperative Networks

The most cost-effective Internet connection would be e-mail exchange through a local bulletin board system. Installation in a community would cost roughly $3,000 for hardware and software and $3,000 for initial training of the system operator and local trainers. The monthly cost for an entire community to use Internet e-mail … would be roughly $100 … A monthly budget of $100 for remote technical assistance is recommended. These costs would be the same for both urban and rural communities.