Newsgroups: nz.general
Subject: Re: Local call charging announcement on Thursday?
From: greg@whio.canterbury.ac.nz (Greg Ewing)
Date: 17 Aug 92 11:45:38 +1200
Reply-To: greg@whio.canterbury.ac.nz (Greg Ewing)
 <htweedie.044u@madhat.actrix.gen.nz> <1992Aug15.123218.23273@actrix.gen.nz>
Distribution: world
Organization: University of Canterbury, Christchurch, New Zealand

In article <1992Aug15.123218.23273@actrix.gen.nz>,
Steve.Withers@bbs.actrix.gen.nz writes:

|>  
|> You and I buy a raincoat for the same price. On a rainy day, I chose
to go out
|> side. You chose to stay in. Should your raincoat be cheaper than mine? 
|> 

There is an important difference between raincoats and telephone systems
that Mr. Withers seems to have overlooked. While it is quite possible for
everyone to wear their raincoats simultaneously at all times, it is *not*
possible for everyone to use their telephones in the same manner.
There simply isn't enough interconnection equipment available. Not nearly 
enough.

If Telecom were to provide enough equipment to allow this, they would
probably need to charge $1000 a month or some equally ridiculous figure
for line rental.

The problem is one of resource allocation. I agree with Mr. Withers' view that
some means of fairly allocating the resource is desirable; however, I
think that he has a mistaken idea concerning what that resource is, and
what consitutes a fair allocation.

The resource we are talking about is bandwidth-time. When you talk to someone
on the phone, you use one phone line's worth of bandwidth for however long
the call lasts. Now, the bandwidth of the telephone exchange is much less
than the total bandwidth of all the phone lines connected to it. The reason
this does not usually cause a problem is that each person only uses
exchange bandwidth for a small proportion of time.

Mr. Withers would like to pay a fixed rental and be entitled to a certain
share of bandwidth-time, which he can use or squander as he sees fit,
without affecting anyone else's use of their share. This is fine, as
long as he realises that the share he is entitled to is *not* one phone
line times 24 hours per day. It is much less. If he were to use his
phone that much, he would be exhibiting extreme greed and depriving many
other people of their paid-for share!

The problem is how to fairly allocate bandwidth-time. One way is to rely
on the fact that - as Mr. Withers has pointed out - people do not usually
spend all day using the phone, so just let everyone use it when they want
and hope that things do not get too congested. With local calls, where
bandwidth-time is relatively cheap and plentiful, this system seems to
work reasonably well. 

However, it is not automatically "fair" in the sense that everybody is 
guaranteed an equal share in the resource. It's just that there's mostly 
enough to go around to meet demand, so nobody complains, or even notices
much when some people exceed their "fair share" and are subsidised by
others who do not use all of their share.

Another way of allocating bandwidth-time is to keep track of, and charge
for, the actual amount of bandwidth-time used by each person. This guarantees
that each person gets what they pay for and vice versa; whether it is
any more "fair" depends on your definition of fairness. What is more
certain is that it has the effect of moderating usage, which is important
in the case of long-distance calls where bandwidth-time is very scarce.

Unless technology makes long-distance bandwidth a lot, lot cheaper,
applying the free-for-all system to long-distance calls would result in
it being very, very hard to get a call through. All very fair, but hardly
a desirable situation!

All things considered, I think that the present system - a flat fee for
local usage, time charging for long-distance calls - is a reasonably good
compromise and one that most people seem to be happy with. It's worked
well enough so far, and I don't see any compelling reason to change it.

|> Steve Withers - Wellington, New Zealand | If you don't vote for MMP on 
|> Steve.Withers@bbs.actrix.gen.nz         |  September 19, 1992, then you 
|> withers_s@kosmos.wcc.govt.nz            |  must like things the way they 
|> **** Happy user of OS/2 v2!! ****       |  are.....can I live with YOU?

Greg Ewing, Computer Science Dept, Canterbury Univ., Christchurch, New Zealand
Internet: greg@cosc.canterbury.ac.nz	+--------------------------------------
Spearnet: greg@nz.ac.canterbury.cosc	| A citizen of NewZealandCorp, a
Telecom:  +64 3 667 001 x6367  		| wholly-owned subsidiary of Japan Inc.


Newsgroups: nz.general