REFERENCE

z5

\

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NBS TECHNICAL NOTE 845

S^£AU Of *

IOC

.US753

no. ^5"

H74
NATIONAL BUREAU OF STANDARDS

The National Bureau of Standards 1 was established by an act of Congress March 3, 1901. The Bureau's overall goal is to strengthen and advance the Nation's science and technology and facilitate their effective application for public benefit. To this end, the Bureau conducts

research and provides: (1) a basis for the Nation's physical measurement system, (2) scientific and technological services for industry and government, (3) a technical basis for equity in trade, and (4) technical services to promote public safety. The Bureau consists of the Institute for Basic Standards, the Institute for Materials Research, the Institute for Applied Technology,

the Institute for Computer Sciences and Technology, and the Office for Information Programs. THE INSTITUTE FOR BASIC STANDARDS provides the central basis within the United

States of a complete and consistent system of physical measurement; coordinates that system

with measurement systems of other nations; and furnishes essential services leading to accurate and uniform physical measurements throughout the Nation's scientific community, industry, and commerce. The Institute consists of a Center for Radiation Research, an Office of Measurement Services and the following divisions: Applied Mathematics — Electricity — Mechanics — Heat — Optical Physics — Nuclear

Sciences 2 — Applied Radiation 2 — Quantum Electronics " — Electromagnetics 3 — Time

and Frequency 3 — Laboratory Astrophysics 3 — Cryogenics *. THE INSTITUTE FOR MATERIALS RESEARCH conducts materials research leading to improved methods of measurement, standards, and data on the properties of well-characterized

materials needed by industry, commerce, educational institutions, and Government; provides

advisory and research services to other Government agencies; and develops, produces, and

distributes standard reference materials. The Institute consists of the Office of Standard

Reference Materials and the following divisions: Analytical Chemistry — Polymers — Metallurgy — Inorganic Materials — Reactor

Radiation — Physical Chemistry.

THE INSTITUTE FOR APPLIED TECHNOLOGY provides technical services to promote

the use of available technology and to facilitate technological innovation in industry and Government; cooperates with public and private organizations leading to the development of

technological standards (including mandatory safety standards), codes and methods of test; and provides technical advice and services to Government agencies upon request. The Institute consists of a Center for Building Technology and the following divisions and offices: Engineering and Product Standards — Weights and Measures — Invention and Innovation — Product Evaluation Technology — Electronic Technology — Technical Analysis — Measurement Engineering — Structures, Materials, and Life Safety * — Building Environment * — Technical Evaluation and Application ' — Fire Technology.

THE INSTITUTE FOR COMPUTER SCIENCES AND TECHNOLOGY conducts research and provides technical services designed to aid Government agencies in improving cost effec- tiveness in the conduct of their programs through the selection, acquisition, and effective

utilization of automatic data processing equipment; and serves as the principal focus within

the executive branch for the development of Federal standards for automatic data processing equipment, techniques, and computer languages. The Institute consists of the following

divisions: Computer Services — Systems and Software — Computer Systems Engineering — Information Technology.

THE OFFICE FOR INFORMATION PROGRAMS promotes optimum dissemination and

accessibility of scientific information generated within NBS and other agencies of the Federal Government; promotes the development of the National Standard Reference Data System and

a system of information analysis centers dealing with the broader aspects of the National Measurement System; provides appropriate services to ensure that the NBS staff has optimum

accessibility to the scientific information of the world. The Office consists of the following

organizational units: Office of Standard Reference Data — Office of Information Activities — Office of Technical

Publications — Library — Office of International Relations.

1 Headquarters and Laboratories at Gaithersburg. Maryland, unless otherwise noted; mailing address Washington, D.C. 20234.

2 Part of the Center for Radiation Research.

3 Located at Boulder, Colorado 80302.

* Part of the Center for Building Technology.
B/tA

Cost Analysis for Computer Communications

Robert P. Blanc

Institute for Computer Sciences and Technology

\J,$ • National Bureau of Standards

"• Washington, D.C. 20234

t.T.|£aluMOAj y]o1<L Y\o, %^^

Sponsored by

National Science Foundation

Washington, D.C. 20550

'\u^V

U.S. DEPARTMENT OF COMMERCE, Frederick B. Dent, Secrefary

NATIONAL BUREAU OF STANDARDS, Richard W. Roberts, D;"rec»or

Issued September 1974
Library of Congress Catalog Card Number: 74-600140

National Bureau of Standards Technical Note 845

Nat. Bur. Stand. (U.S.), Tech. Note. 845, 40 pages (Sept. 1974) CODEN: NBTNAE

U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1974

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 (Order by.SD Catalog No. CI 3.46:845). Price 75 cents.
FOREWORD

This report is one of a series of publications produced by the

Institute for Computer Sciences and Technology, National Bureau of

Standards, under Grant AG-350 from the National Science Foundation.

This grant supports a broad program of investigation into the

foundations of computer networking in support of scientific and related

educational efforts . A listing of completed and planned publications produced by the

Institute under this grant follows:

1. Primary Issues in User Needs

D. W. Fife

Chapter 10 in Networks for Research and Education:

Sharing of Computer and Information Resources

Nationwide

MIT Press, Cambridge, Mass.

Expected Publication April 1974

2. Some Technical Considerations for Improved Service

to Computer Network Users

T.N. Pyke, Jr. COMPCON, 1973

Seventh Annual IEEE Computer Society International

Conference

3. Computer Networking Technology - A State of the Art

Review

T.N. Pyke, Jr. and R. P. Blanc

COMPUTER Magazine

Computer Society of the IEEE

August, 1973

4. Review of Network Management Problems and Issues

A.J. Neumann

NBS Technical Note 795, October 1973

5. Annotated Bibliography of the Literature on Resource

Sharing Computer Networks

R. P. Blanc, I. W. Cotton, T.N. Pyke, Jr., and

S.W. Watkins

September, 197 3 NBS Special Publication 384

iii
6. Network Management Survey

I. W. Cotton

NBS Technical Note 805, January 1974

7. User Procedures Standardization for Network Access

A. J. Neumann

NBS Technical Note 799, October 1973

8. Review of Computer Networking Technology

R. P. Blanc

NBS Technical Note 804, January 1974

9. Microeconomics and the Market for Computer Services

I. W. Cotton

Submitted for publication

10. Cost Analysis for Computer Communication

R. P. Blanc

NBS Technical Note, June 1974

11. Network User Information Support

A. J. Neumann

NBS Technical Note 802, December 1973

12. Quality Service Assurance Experiments

R. Still man

NBS Technical Note 800, December 1973

13. A Guide to Networking Terminology

A.J. Neumann

NBS Technical Note 803, March 1974

14. Research Considerations in Computer Networking

D.W. Fife

NBS Technical Note 801, June 1974

IV
CONTENTS

Page

1Introduction , 1

2. Configurations to be Analyzed t. 3

3. Communication Networks Used ...... 4

4. Cost Factors 6

1) TYMNET CommercialRates 6

2) PCI Illustrative Rates 7

3) Teleprocessing Systems Model . . . . 8

5. Traffic Calculations 9

6. Communications Costs 13

7. Comments ........... 20

8. References ........... 21

Appendices

A. Cost Calculations ........ 22

B. Common Carrier Tariffs ...... 33

COST ANALYSIS FOR COMPUTER COMMUNICATIONS

Robert P. Blanc

This report summarizes a communication cost study relevant

to the needs of the NSF Networking for Science Program. The primarypurpose of this report is to provide an approximation to the communications costs of connecting a specified number of host computers in

selected locations with a specified number of interactive user terminals

.

Cost factors from existing, proposed, and modeled value-added networks are applied to hypothetical traffic demands to arrive at cost

estimates

.

Keywords: Computer networking; cost study; interactive terminals;

value-added networks.

1. INTRODUCTION

This report summarizes a communication cost study relevant

to the NSF Networking for Science Program [1]. The primary purpose

of this report is to provide an approximation to the communication

costs of connecting a specified number of host computers in selected

locations with a specified number of interactive user terminals. The

actual numbers and locations are hypothetical, but the methodology

presented can be applied to refine this, and similar studies, as actual

numbers and locations become known.

Two actual and one modeled communication network will be

considered. The two actual communication networks are "value-added'

networks" (VAN). A VAN utilizes the existing common carrier networks for transmission while providing the added data service features

with separate equipment [2]. These added service features include:

store-and-forward message switching, which provides for statistical

multiplexing of common carrier circuits among multiple terminals and

host computers; terminal interfacing which can provide for multiplexing of terminals, speed recognition, and code conversion; host

interfacing to the network which thus completes the interconnection of

the hosts, the terminals, and possibly other host computers. The third

network considered is a hypothetical one configured by a computer program using traffic demands, size, and locations as inputs, and cost and

topology as output. Once configured, this network exhibits the same

properties in terms of value-added data services as the VAN's and will

be so considered.
The functional capabilities and the inherent limitations of the

communications networks for application in the Networking for Science

Program have been discussed in detail in the technology review [3].

This report, therefore, will concentrate on costs. Sample network

sizes and host and terminal locations are chosen, and communication

cost factors reflective of the three networks are identified. Then those

cost factors are applied against the sample configurations, using

hypothetical traffic demands, to arrive at cost approximations for the

application of the selected VAN'S. The traffic demands are reflective

of the line utilization of interactive terminals, for which data is available [4,5].

Before presenting the analysis and derived costs, the following

will be discussed: the hypothetical configurations relative to numbers

and locations of hosts and terminals selected for this study; a rationale for the communication networks used and the identification of

their associated cost factors; the derivation of traffic demands

generated by the selected terminals.

NOTE: The identification of certain commercial networks in this

report is done in order to adequately identify the network

technologies and cost factors discussed herein, and in no

sense does it imply recommendation, endorsement, or

criticism by the National Bureau of Standards.
2. CONFIGURATIONS TO BE ANALYZED

For this study the important elements of configuration are the

numbers of host computers and user terminals that must be interconnected. Other typical elements such as network topology,

components, and circuits are predetermined in the VAN'S. The price

structures of two of the VAN's used are distance independent, i. e. , charges are based on the amount of data transmitted, not the distances

of transmission. Actual locations will not be important for these. The

hypothetical network does, however, depend on actual locations . Therefore, when there are multiple hosts, they are distributed in the largest

cities throughout the country to make the configuration somewhat typical

of a national network. Terminals are assumed to be located in large

cities other than those in which hosts exist.

Six sample configurations, differing in size, have been selected

for cost analysis. The sample configurations are as follows:

A. 1 server / 10 terminals

B. 1 server / 100 terminals

C. 10 servers / 100 terminals

D. 10 servers / 1000 terminals

E. 25 servers / 250 terminals

F. 25 servers / 2500 terminals

Servers are those locations that have a host computer providing

service through the communication network. Terminals are typical 110

baud full-duplex or half-duplex interactive terminals. It is assumed

that all terminals are remote from the host computers, that is, local

traffic for a host computer will not enter into the analysis.

A widespread national distribution is assumed for both servers and terminals. Further, the configurations allow any terminal to connect

to any host. Computer -to -computer communication is omitted from the

traffic demand and cost considerations.

The sample configurations and associated costs, used in

combination with the incremental costs which will also be derived,

should be useful for indicating approximate costs for other similar

configurations

.
3. COMMUNICATION NETWORKS USED

The cost study reflects the technologies of two existing networks,

TYMNET and ARPANET, and of one hypothetical network. In the case

of TYMNET, the cost factor data is derived from the TYMNET commercial rates. However, lacking cost data from the ARPANET, the

illustrative rates of the Packet Communications Inc. (PCI) proposal are used [6]. The third set of cost factors is derived using the Teleprocessing Systems model developed under contract by General Electric

Corporation for the Office of Telecommunications Policy [7]. The

TYMNET and PCI costs will be used to give an approximation to the

costs of using a commercial value-added network for computer communication service and the Teleprocessing Systems Model will be used to approximate the equipment and circuit costs of constructing a valueadded network. All three communication networks have widely varying

capabilities. The three selections are briefly discussed below.

TYMNET is a logical selection since it is already in the business

of offering a commercial value-added communication service with user

supplied hosts. Among its present customers are the National Library

of Medicine, Massachusetts General Hospital, Ohio State University,

University of Illinois at Chicago, University of Colorado Medical Center,

National Medical Audio and Visual Center, and many others.

The ARPANET, because of its extensive capabilities, is also

used. Lacking an economic study of the ARPANET, there are no good,

comprehensive figures for its actual cost of usage. PCI, however,

has made a formal filing to operate a commercial packet switching

network based on ARPANET technology. In that proposal are specified

some illustrative rates which are comprehensive in the coverage of

the important facets of network communication including host and

terminal interfacing. Although the proposal is not identical to ARPANET

technology, it is similar. For this reason, although the rates are

estimates, it is believed by this author that they represent reasonable

approximations for a commercial offering utilizing ARPANET technology. It is important to note that PCI illustrative rates are used,

but that it is the present state of the ARPANET and its present limitations

that are considered to determine traffic handling capabilities. This will

be most apparent in the succeeding sections where the costs of servicing

echoplex terminals are considered.

The Teleprocessing Systems Model was also used to generate

communication networks used in the analysis. The communication

networks generated are in many ways similar in structure to the GE

Information Services communication network, except that the technology

4
used in the GE central communication complex is applied to a nationallydistributed configuration (see technology review [3]). The networks

generated can be considered to be composed of off-the-shelf components

(concentrators, multiplexers, and common carrier provided circuits)

although the concentrators have some relatively simple message

switching capabilities which might require development. The cost

figures 'which will be used include no overhead for operation costs, no

software development costs, and no profit margin. They are essentially

direct operating costs for an "off-the-shelf" system. This is an important distinction when comparing the costs of using the modeled network with those of using the commercial packaged offerings.
4. COST FACTORS

The purpose of this section is to show the cost factors which were

used in the cost analysis for the six (6) sample configurations. These

cost factors were obtained from: TYMNET commercial rates; the

illustrative rates of the PCI proposal; and component costs and common

carrier tariffs from the data bases of the Teleprocessing Systems

Model.

(1) TYMNET Commercial Rates

The factors below express a breakdown of TYMNET communication charges. The accumulative connect time includes that of all

terminals together connected to the host or hosts of a customer for a period of one month. The TYMCCM is the minicomputer which acts as

a host computer interface to the TYMNET and requires usually minor

modifications for different host systems. The cost of those modifications is reflected in "other charges. " Note that the cost per unit of

connect time decreases as the total connect time in a month increases.

DESCRIPTION

Each log-on

Accumulative connect time per

month for all terminals:

to 500 hours

next 1500 hours

next 3000 hours

next 5000 hours

each hour over 10,000

Transmission of characters

TYMCOM-III rental (up to 30 ports)

OTHER CHARGES

One-time engineering installation

charge

Programming assistance for changes

to TYMCOM- III

CHARGE

50

3. 00/hour

2. 50/hour

2. 00 /hour

1. 50/hour

1. 00

. 125/1000 chars.

2150. 00 /month

1000.00/TYMCOM

300. 00/day plus

travel and

living

expenses
(2) PCI Illustrative Rates

PCI illustrative rates are based on the amount of traffic in terms

of packets generated to and from a host computer on a monthly basis,

the cost of the host computer interface, and the terminal connect time.

In the next section on "traffic calculations" a derived transition from

terminal input and output to packets is shown, but in general a packet

is a unit composed of from zero to 1000 data bits. The accumulative

number of packets is reflected of the amount of traffic to and from a customer's host computer. Traffic accumulations across multiple

hosts of a single customer are not additive in the rate per packet

calculation. The host interface costs, in addition to reflecting connectivity and maximum instantaneous throughput, also include a hardware channel (CIU) and host resident control program (NCP) development and usage. It should be noted that in the following illustrative

rates, the rate per 1000 packets is traffic volume dependent. It should not be assumed that the rates of PCI or any other VAN

will exhibit this dependency when actually operational.

TRAFFIC

M-F, 8:00 a.m. - 8:00 p. m Rate /l 000 packets

first 1 . 5 million $4.00

next 1 . 5 million 3. 50

next 3. million 3.00

next 3.0 million 2. 50

additional 2.00

All other times Rate/]1000 packets

first 1 . 5 million $2. 00

next 1 . 5 million 1.75

next 3 . 1. 50

next 3 . 1.25

additional 1.00

HOST INTERFACE

Description Peak Data Rate Installation Monthly

single connect 9. 6 Kbps $2500 $2000

single connect 50. Kbps 3000 2500

double connect 9.6 Kbps 3000 2500

double connect 50. Kbps 3500 3000

computer interface

unit (CIU) 2000 500

network control

program (NCP) 3500 750
CONNECT TIME

Asynchronous, switched (duplex)

300 baud or less (full or half)

300 - 1800 (half)

300 - 1800 (full)

300 - 1800 (receive), 150 or less

(transmit)

Synchronous, switched

2000 or 2400 (half)

2000 or 2400 (full)

4800 (half)

4800 (full)

Rate /minute /te rminal

$0.03

0.04

0. 05

0. 04

Rate

$0. 08

0. 09

0. 10

0. 11 FULL-TIME

Asynchronous, leased Installation Monthly

300 or less

300 - 2400 (half)

300 - 2400 (full)

300 - 2400 (receive), 300

or less (transmit)

$100

200

200

200

$150

200

200

200

Synchronous , leased

2000 or 2400 (half)

2000 or 2400 (full)

4800 (half)

4800 (full)

Installation

$300

300

300

300

Monthly

$350

350

450

450

(3) Teleprocessing Systems Model

The Teleprocessing Systems Model structures a tree or ring net

according to demand requirements, using presently available concentrators, multiplexers, simple store-and-forward switches and common

carrier offerings. Leased lines compatible with demand requirements

are used between computers, concentrators, and multiplexers, and

dial-up facilities are used between user terminals and the interface to the configured network.
5. TRAFFIC CALCULATIONS

For the purpose of this analysis, it is assumed that network

traffic will be generated by interactive terminals operating at a data

rate of 110 baud. Interactive terminal input and output is assumed

because it is believed to represent, at least in the early stages, the

primary mode of user interaction with the network. The data rate

selection of 110 baud is due to the pragmatic consideration of being the

data rate for which the most line utilization data is available. The

estimated line utilization generated by interactive terminal users is based upon the Jackson and Stubbs "data stream" model and derived

data for scientific users [4] and from preliminary data generated by

the NBS-ICST Network Measurement Machine [5].

The line utilization is expressed in terms of the average

characters per second transmitted by the user and the average characters

per second transmitted by the system, and also the combined average

transmitted by both. This line utilization will be some fraction of the

maximum possible utilization. For example, the maximum possible

for a 110 baud terminal is 10 characters per second. Since terminals

may not be constantly connected to a system port during a period, what

is actually being calculated is the line utilization during a terminal port

second or port hour. However, since statistics are not available

covering actual terminal-port connect time for the wide variety of users and usages in the Networking for Science Program, an excess demand

situation will be assumed. Therefore, a terminal will be connected

and in use during the entire period of interest. This will allow us to equate line utilization per terminal to line utilization per port hour.

Total network traffic will be the amount of traffic generated by one terminal (calculated from line utilization) multiplied by the number of

terminals in the network.

Line utilization will be expressed in units which are useful for

cost analysis in relation to the respective communications cost factors

of the VAN's. Bits per second input and output are useful for specifying

a task description for the Teleprocessing Systems Model. Characters

per second and total characters generated are most relevant to the

TYMNET commercial rates. For the PCI illustrative rates, it is the

number of packets generated that is the important variable. The

latter , since it can only be speculated how PCI would map interactive

terminal traffic into packets, is derived by assuming that buffer sizes

in the terminal interface will be similar to those of the NBS TIP and

that interactive terminals will be handled similar to the manner in
which they are presently handled on the ARPANET. The actual

transition between interactive terminal traffic and ARPANET packets

is described in the literature [3, 8].

It is important to point out that the following calculations for

packets per month in the full duplex case are based strictly on the

current ARPANET mode of operation. At this time efforts are

directed toward a new Telnet protocol, which when used in the optional

"Remote Controlled Terminal Echoing (RCTE)" mode, is expected to have a substantial effect on the numbers of packets which will be

required in full-duplex operation. PCI's plan has been to make available a terminal protocol similar in effect to that expected from the new

protocol. Lacking statistics as to the actual blocking of data into

packets under such a protocol, the current ARPANET mode is used in

the analysis. This does not imply that PCI, other potential commercial

offerings, or a revised ARPANET protocol will operate in that same

mode.

For all cases it is necessary to know the number of connects

made by the terminal, the duration of connection, and the actual times

of the day (prime time or otherwise). Therefore it is assumed that

terminals are used continuously during prime time (9:00 a.m. - 5:00 p.m. , Monday - Friday) for 16 one-half hour sessions. Enough

data is given in the report to permit a similar analysis under different

assumptions

The different transformations for the same flow of traffic is shown below:

10
LINE UTILIZATION PER TERMINAL

(1) Characters per month = 2300K:

_ , char - /0.- sec „ hour __ day „--.,»,> char

3. 6 x 3600 x 8 x 22 —z—- = 2300K t- sec hour day month month

(2) Connects per month = 352:

„ hour _,_ day _ connects _,._ connects

8 x 22 '—r x 2 — = 352 -r- day month hour month

(3) Packets per month - half-duplex = 88. 7K:

2300K (char) = 180K (input) + 2120K (output)

2

180K 2120K

+

10 (input buffer) 30 (output buffer)

18K (input) + 70. 7K (output) = 88. 7K ^month

(4) Packets per month - full -duplex = 430. 7K:

180K (input) + 180K (echo) + 2120K (output) = 2480K (char)

180K 180K c 2120K

1 (input buffer) 1 (echo buffer) 30 (output buffer)

430. 7K£^£ month

11
(5) Input /output bits per hoar = 11. 9K input, 1 30. 7K output:

3 . 6 £M£ = 39 .6^ = 142. 6K^ sec sec hour

bits , _ „„ bits

inputs 11.9K- output = 130. 7K hour " hour

NOTES:

1. Derived from data used with the "data stream" model [4] for

scientific users on a moderately loaded system.

2. Input/butput ratio is derived from data of the "data stream" model.

3. Buffer sizes are those of the NBS TIP. It is assumed that

message sizes are such that the buffers are fully utilized.

4. Echoing here is, in quantity, one-to-one with input. It is assumed

that the action of echoing will not significantly alter input and output demands

5. The system will try to transmit characters immediately rather than

batching characters which would result in choppy echoing (see the

technology review [3] for a complete discussion of this concept).

6. This is the number of bits seen at the terminal interface.

7. These ratios are derived from the "data stream" model.

12
6. COMMUNICATIONS COSTS

The previous sections describe the configurations used, the

cost factors for the three communication networks, and the traffic

demands of interactive terminals. This section shows the derived

communications costs applying the cost factors of each of the three

communication networks to the selected sample configurations using

the hypothetical terminal traffic demands. First, two sample calculations are shown and then the costs from all calculations are summarized in tabular and graphical format. For comparative

purposes, some typical common carrier offerings are summarized.

For the details of each cost calculation, see Appendix A, and for a

listing of typical common carrier rates, see Appendix B.

In the following calculations, the costs of the terminals themselves, the local loops and modems, and the host computers are assumed constant across networks and are factored out of the analysis.

The cost of running the network control program, that software in the

host computer that enables it to communicate with the network, is relevant, but there are no useful data to describe this cost in terms of

main memory and CPU utilization. It is, therefore, also omitted.

These sample calculations are based on the configuration requiring 10

host computers or server systems and 1000 interactive terminals.

The calculations are performed for TYMNET rates and PCI illustrative

rates. The reader should refer back to sections 4 and 5 for the cost

factors and traffic assumptions.

In the case of TYMNET, the cost for interconnecting 10 servers

with 1000 user terminals consists of: an installation charge composed

of a one-time engineering charge and a programming assistance

charge; and a monthly charge based on the total number of connects,

the number of characters transmitted and received, and the accumulative connect time for all terminals. The engineering installation

charge can be calculated as

$1000 x 34 = $34, 000 or $3400 per host

which is the cost of 34 TYMCON-III's, giving a capacity of 1020 ports

(30 ports per TYMCON-III). Assume an average of $4000 per

TYMCON-III for programming assistance for unique host systems. If, in the worst case, we have 10 unique host systems (hardware and/or

software), then the charge can be calculated as

$4000 x 10 = $40, 000 or $4000 per host

13
or a total installation charge of $7400 per host. The rental charge for

the TYMCOM Ill's is $73, 100/month ($2150 x 34) or $73. 10 per

terminal and the log-on charge is

$, 50 x 352 (1 log-on per connect) = $176 per terminal.

The charge for transmitting characters can be calculated as

$. 125 x 2300K = $287. 50 per terminal.

The accumulative connect time per month for all 1000 terminals is 176, 000 hours which, using the sliding scale on page 6 gives a total

cost of $184, 750 or $184. 75 per terminal. Therefore, the monthly

charge adds to $721. 35 per terminal. The minimum possible communication charge per terminal occurs when the accumulative connect time

for all terminals is great enough such that the effective rate per hour

approaches the minimum value of $l/hour. In that case the connect

time charge per terminal would approach $176/month. The cost is further

decreased by allowing the number of ports (terminals simultaneously

connected) to be an even multiple of 30 (30 ports per TYMCOM- 111),

giving a TYMCOM-111 rental charge of $71.67 per terminal. The

minimum monthly cost is therefore given as

$71.67 + $176 + $287. 50 + $176 = $711. 17 per terminal.

A similar calculation can be performed using the PCI illustrative

rates. The configuration of 10 servers and 1000 terminals is again

used, and for the purposes of this calculation, the terminals operate

in half-duplex mode. The charges consist of: an installation charge

for the host interface; and monthly rental charges for the host interface,

terminal connect time, and terminal traffic. The reader should note

that the following calculations are based only on the illustrative rates of

PCI and that these rates are subject to change before a service is

actually offered. The installation charge for each host interface,

assuming that single connectivity between the host and the network and

a peak data rate of 9600 baud are sufficient, is calculated as

$2500 + 2000 + 3500 = $8000 per host.

This includes the computer interface unit and the network control

program. The monthly charge for the same is

$2000 + 500 + 750 = $3250 per host.

With 10 hosts and 1000 terminals the host interface cost per terminal

14
averages to $32. 50. The monthly connect time charge is —'- x — x 176 hours = $316. 80 per terminal. mm hour

The monthly charge for terminal traffic is accumulative on a host

computer basis, but is non-accumulative across hosts. Therefore

using the traffic estimates from section 5 we have

88. 7K x 100 = 8870K packets per host

which is the average number of packets per terminal multiplied by the

average number of terminals per host. Applying the sliding scale on page 7 leads to a monthly traffic charge of $27,425 per 100 terminals

or $274. 25 per terminal. The total monthly charge is therefore

$32. 50 + $316. 80 + $274. 25 = $623. 55 per terminal.

The minimum cost per terminal is calculated by allowing the amount

of traffic to be great enough such that the rate per 1000 packets

approaches the minimum on the sliding scale. At the limit the

monthly cost is

$32. 50 + $316. 80 + $177. 40 = $526. 70 per terminal.

15
The following summarizes the communications costs derived

by applying the cost factors of the two VAN'S against the sample

configurations. In addition the costs of the communication networks

generated by the model are shown. The model, however, is limited

to a maximum of twenty (20) servers. The numbers in parentheses are

the costs of operating in full-duplex mode with echoing. As stated in

section 5, these calculations assume the use of currently implemented

ARPANET protocols for handling echoplex traffic. This should not

imply that PCI will operate on echoplex in this inefficient manner.

SUMMARY

TYMNET PCI Illustrative

(full -duplex)

Model

1 server/10 terminals 1143. 50 996.60 (2158. 90) 2220.00

1 server/100 terminals 813. 00 623. 55 (1308.20) 341.00

10 servers/100 terminals 942. 00 996.60 (2158. 90) 605.00

10 servers/1000 terminals 721. 35 623.35 (1308.20) 262.00

20 servers /200 terminals

not

calculated

not

calculated

557.00

20 servers/2000 terminals 179.00

'25 servers /2 50 terminals 889. 50 996.60 (2158.90)

not

derivable

from model

25 servers/2500 terminals 715. 24 623. 55 (1308.20)

f • • minimum cost 711. 17 526. 70 (1210. 70)

MONTHLY COMMUNICATION COST PER TERMINAL

16
Figure 1 below shows the monthly communications cost per

terminal with increasing size networks and a fixed host to terminal

ratio of 1 to 10.

2200

pci (fd;

2000

1800

1600

1400

1200

1000

PCI (HD)

800 TYMNET

600

400 MODEL

200

1 ! 1

1 1 1 10 15 20 25

number of hosts

COST PER TERMINAL (1:10)

Figure 1

17
An economy of scale is evident in two of the networks. This is also apparent when the host to terminal ratio is increased to 1 to 100

as in Figure 2 below. It is also clear that the overall costs are substantially lower indicating that in the case of each network, there

exists an economy of scale as the terminal to host ratio increases.

COu

a

i—

i

,—

i

o

800

700

600

500

400

300

200

100

TYMNET

PCI (HD)

MODEL

10 15 20 25

number of hosts

COST PER TERMINAL (1:100)

Figure 2

18
To put this information in perspective, Figure 3 below shows

some costs for using common carrier provided facilities for one host

and one terminal using the calculated traffic, connects, and holding

times. Without multiplexing, costs for additional terminals are

additive. The WATS portion of the graph is approximate since rates

vary with location and WATS areas are non-symetric.

LEASED

(HD)

500 1000 1500 2000 2500 3000

250 750 1250 1750 2250 2750

Interstate Mileage

COMMON CARRIER FACILITIES

Figure 3

19
7. COMMENTS

This report has been intended to derive a set of approximations

to the costs of networking using selected potential configurations and

a particular type of common network traffic. The costs derived are

to be reflective of the networking communications costs and do not

include host computers, terminals, or local loops, but do include the

interfaces between them and the network. It has been assumed, that

in each configuration, every terminal has equal access to every host

computer on the network.

It has not been the intent of this report to compare the cost of

using alternative value-added networks. Although all of the networks

are flexible in design and can accommodate geographically distributed

connections, the networks cannot be directly compared for the following

reasons:

1) TYMNET exists and is being used commercially.

2) ARPANET exists but the actual costs of using it are unknown. It is partially subsidized by ARPA, wide-band

circuits are leased at a substantial volume discount,

and costs associated with host interfacing have not been

derived.

3) PCI has not yet created the proposed network, and if and when it is operational, it is not certain that the

rates would be the same as the illustrative rates.

4) The network generated by the model, or the "do-ityourself" approach, does not include operational

overhead, marketing costs, installation charges, and

a profit margin as do the commercial networks. It is strictly the equipment and circuitry costs that are

generated. In addition some of the components would

have to have special purpose software, and these

developmental costs have not been included.

In addition to these pragmatic considerations, there exists a wide variety of support capabilities and performance differences.

For a complete discussion see the technology review [3].

20
8. REFERENCES

1. Aufenkamp, D.D., "National Science (Computer) Network,"

Proc. Educom Spring Conference , Educom, Princeton, N. J. , pp. 29-35.

2. Enslow, Philip H. , "Network Viability: Economic, Legal, and

Social Considerations," COMPCON 73 -International Conference

of the IEEE Computer Society, February 1973, pp. 7-9.

3. Blanc, R. P. , "Review of Computer Networking Technology, " NBS Technical Note 804, January 1974.

4. Jackson, P. and C. Stubbs , "A Study of Multi-access Computer

Communications," Proc. SJCC 1969 , pp. 491-504.

5. Abrams, M.D., G.E. Lindamood, and T.N. Pyke, Jr.,

"Measuring and Modeling Man- Computer Interaction, " Proc.

First Annual ACM Symposium on Measurement and Evaluation , Palo Alto, California, February 1973, pp. 136-142.

6. Application to the Federal Communications Commission by

Packet Communications, Inc. , FCC No. P-C-8533, January

1973.

7. Teleprocessing Systems Study for Office of Telecommunications

Policy, Executive Office of the President, Washington, D. C. , Final Report, Contract Number OTP-SE-72- 1 1 5.

8. Pyke, T. N. , Jr., and R. P. Blanc, "Computer Networking

Technology- -A State of the Art Review, " Computer, IEEE

Computer Society, August 1973, pp. 13-19.

21
APPENDIX A

Cost Calculations

In the following the cost per server node and the cost per

terminal for each communication network is shown. Costs express

one time installation charges and continuous monthly charges. Fixed

scale costs, those for which the rate per unit is constant, and sliding

scale costs, those for which the rate decreases with quantity, are

identified separately. Traffic costs are the costs of transmitted data

for one month for the number of specified terminals. Connects are

the number of connections to the network made by the number of

specified terminals in one month. The connect time is for the combined total of the specified number of terminals for one month.

The calculations are done differently for each communication

network because the cost factors are different. The cost factors are

identified in section 4. At the end of each set of calculations for a communication network, the minimum cost per terminal is shown. This

is the cost when the network is large enough to approach costs based on

the minimum rate of the sliding scale.

(1) TYMNET

Cost per server node - fixed scale:

installation = $5000 (approximate)

monthly = $2150 (30 ports maximum)

Cost per terminal - fixed scale:

traffic = $287. 50

connects = $176.00

total = $463. 50

22
Cost per terminal - sliding scale

connect time = - 500 - 2000

2000 - 5000

5000 - 10,000

10,000 +

500 hour = $1500

= $3750 $5250

= $6000 $11, 250

= $7500 $18, 750

= $l/hour

Single server system:

A. 10 Terminals

installation

monthly

programming

monthly

server

fixed terminal

connect time

monthly cost/terminal -

$5000

server $2150

fixed terminal $4635

connect time $4650

$11,435

monthly cost/terminal = $1, 143. 50

B. 100 Terminals

installation

engineering $1000

x4 (120 ports)

$4000

$4000

$8000

$8600

$46, 350

$26, 350

$81, 300

$813.00

23
Ten Server System:

A. 100 Terminals

installation

monthly

server

fixed terminal

connect time

monthly cost/terminal

B. 1000 Terminals

installation

engineering

programming

monthly

server

terminal

connect time

monthly cost/terminal =

$50, 000

$21, 500

$46,350

$26, 350

$94,200

$ 942.00

$ 1,000

x34 (1020 ports)

$34,000

$40,000

$74,000

$73, 100

$463, 500

$184,750

$721, 350

$721. 35

24
Twenty-five Server System:

A. 250 Terminals

installation $125,000

monthly

server $53, 750

fixed terminal $115, 875

connect time $52, 750

$222, 375

monthly cost/terminal = $889. 50

B. 2500 Terminals

installation

engineering $1,000

x84 (2520 ports;

$84,000

programming $100, 000

$184,000

monthl y

server $180,600

terminal $1, 158, 750

connect time $448, 750

$1, 788, 100

monthly cost/terminal = $715.24

Minimum cost/terminal:

server $71.67

fixed terminal $463. 50

connect time $176. 00

$711. 17

25
(2) PCI Illustrative Rates

Cost per server node - fixed scale:

installation = $8,000

monthly = $3, 250

Cost per terminal - fixed scale:

connect time = $316.80

Cost per terminal - Sliding scale:

- 1500K packets = $6000

1500K - 3000K packets = $5250 $ 11,250

3000K - 6000K packets = $9000 $ 20,250

6000K - 9000K packets = $7500 $ 27,750

9000K + packets = $2/1000

26
Single server system:

A. 10 Terminals

installation

monthlyserver

fixed terminal

traffic

monthly cost/terminal

B. 100 Terminals

installation

monthly

server

fixed terminal

traffic

monthly cost/terminal =

$8,000

$3, 250

$3, 168

$3, 548 ($15,171)

$9,966 ($21,589)

$996.60 ($2,158.90)

$8,000

$3, 250

$31,680

$27,425 ($95,890)

$62,355 ($130,820)

$623.55 ($1,308.20)

NOTE: The number in parentheses is the cost of operating in full duplex mode with echoing. See comments on page 10.

27
Ten Server System:

A. 100 Terminals

installation

monthly

server

fixed terminal

traffic

monthly cost/terminal

B. 1000 Terminals

installation

monthly

server

fixed terminal

traffic

monthly cost/terminal

$80,000

$32,500

$31,680

$35,480 ($151,710)

$99,660 ($215,890)

$996.60 ($2,158.90)

$80,000

$32, 500

$316,800

$274,250 ($958,900)

$623,550 ($1,308,200)

$623. 55 ($1, 308. 20)

28
Twenty-five Server System:

A. 250 Terminals

installation $200,000

monthly

server $81,250

fixed terminal $79, 200

traffic $88, 700 ($379,275)

$249,150 ($539,725)

monthly cost/terminal = $996.60 ($2,158.90)

B. 2500 Terminals

ins tallation $200,000

monthly

server $81,250

fixed terminal $792, 000

traffic $685,625 ($2,397,250)

$1,558,875 ($3,270,500)

monthly cost/terminal = $623. 55 ($1,308. 20 ) Minimum cost/terminal:

server $32. 50

fixed terminal $316.80

traffic $177.40 ($861.40)

$526.70 ($1,210.70)

29
(3) Teleprocessing Systems Model

The costs for the concentrators and multiplexers are projected for 1974 from present costs and may in some cases be 10-15%

less than the actual 1973 costs. Costs do not reflect host computer,

local loop, or any special concentrator software. Below are examples of some typical equipment used and the related costs.

Multiplexers: monthly cost = $70 (8 ports)

Concentrators: monthly cost = $1080 (64 ports)

Switches (special concentrators): monthly cost = $1600

Circuits: interstate rates for voice grade and wideband

Concentrators can have two output ports giving them a limited

message switching capability. Switches are concentrators that connect

to all servers and have global knowledge of the network.

Single server system:

A. 10 Terminals

monthly

equipment $ 2, 700

circuits $19, 500

$22, 200

monthly cost/terminal = $2,220.00

B. 100 Terminals

monthly

equipment $ 6, 630

circuits $27, 500

$34, 130

monthly cost/terminal = $341.30

SO
Ten Server System:

A. 100 Terminals

monthlyequipment $11,500

circuits $49, 000

$60, 500

monthly cost/terminal = $605. 00

B. 1000 Terminals

monthly

equipment $49,600

circuits $212, 000

$261, 600

monthly cost/terminal = $261. 60

31
Twenty Server System (model is limited to 20 servers maximum):

A. 200 Terminals

monthly

equipment $21,600

circuits $89, 800

$111,400

monthly cost/terminal = $557. 00

B. 2000 Terminals

monthly

equipment $94, 700

circuits $263, 000

$357, 700

monthly cost/terminal = $178.85
APPENDIX B

Common Carrier Tariffs

Some typical common carrier tariffs are shown below. These

are included to provide a comparison between common carrier rates

and VAN rates used for this analysis.

Monthly charge interstate leased lines - voice grade:

MILES HALF-DUPLEX (2-wire) FULL-DUPLEX (4-wire)

$82. 50

+ 173.25 = 255.75

+ 247. 50 = 503. 25

+ 288. 75=792. 00

+ 412. 50=1204. 50

+ 825. 00 = 2029. 50 + 1500=3500 +1125.00=2970.00 +1237.50 = 3267.00

Interstate rates per month for dial-up service (assume 352, 1 /2 hour

calls) 8:00 a. m. - 5:00 p. m. , Monday-Friday:

25 $75. 00

+ 75 = 100 + 157. 50=232. 50 + 150 = 250 + 225. 00=457. 50 + 250 = 500 + 262. 50=720. 00 + 500 = 1000 + 375. 00=1095. 00 + 1000 = 2000 + 750. 00=1845. 00

MILES COST

100 $1826. 88

250 2675. 20

500 3203. 20

1000 3731. 20

2000 4752.00

3000 4752. 00

Wide Area Telephone Service (WATS) rates per month for all six areas, full-time, based on Maryland location:

Al A2 A3 A4 A5 A6_

$510 $765 $1175 $1530 $1735 $1940

(180) (500) (1030) (1500) (2060) (3000)

NOTE: Number in parenthesis is the approximate maximum mileage.

In the immediately preceding, the Al, A2, . . . , A6, refer to area zones in which calls are permitted. Every city in the country

has 6 WATS areas associated with it; the smallest being Al and the

largest, A6, giving national coverage. Specific coverage and mileages

are city dependent.

33
NBS-114A (R^V. 7-73)

U.S. DEPT. OF COMM. BIBLIOGRAPHIC DATA

SHEET

1. PUBLICATION OR REPORT NO. NBS TN-8452. Gov't Accession

No.

3. Recipient's Accession No.

4. TITLE AND SUBTITLE Cost Analysis for Computer Communications

5. Publication Date September 1974

6. Performing Organization Code

7. AUTHOR(S)

Robert P. Blanc

8. Petforming Organ. Report No.

9. PERFORMING ORGANIZATION NAME AND ADDRESS NATIONAL BUREAU OF STANDARDS DEPARTMENT OF COMMERCE

WASHINGTON, D.C. 20234

10. Project/Task/Wotk Unit No. 6502372

11. Contract/Grant No. AG-350

12. Sponsoring Organization Name and Complete Address (Street, City, State, ZIP) National Science Foundation

Washington, D.C. 20550

13. Type of Report & Period Covered Jfinal July-October 1973

14. Sponsoring Agency Code

15. SUPPLEMENTARY NOTES

Library of Congress Catalog Card Number: 74-600140

16. ABSTRACT (A 200-word or less factual summary of most significant information. If document includes a significant bibliography or literature survey, mention it here.) This report summarizes a communication cost study relevant to the needs

of the NSF Networking for Science Program. The primary purpose of this report

is to provide an approximation to the communications costs of connecting a specified number of host computers in selected locations with a specified number

of interactive user terminals. Cost factors from existing, proposed, and

modeled value-added networks are applied to hypothetical traffic demands to arrive at cost estimates.

17. KEY WORDS (six to twelve entries; alphabetical order; capitalize only the first letter of the first key word unless a proper name; separated by semicolons) Computer networking; cost study; interactive terminals;

value-added networks.

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