Internet Economics

Shi-Chung Chang Yi-Nung Yang

Lecture #1: Outline• Today

– Internet Overview— Internet Background and Organization

— ISP and Services

— Future Trend

– Economic Problems of Internet— network infrastructure

– congestion, efficient pricing

— content

– intellectual property, pricing information goods, decency, encryption and transaction security,

– Course Overview

Lecture #1: Outline (Cont)

• Next Time

• Basics of economics– wk4: 需求面理論 Demand Side

Reading Assignments[MaV97] J. K. Mackie-Mason, H. R. Varian, “Economic FAQs about the Internet” available at < http://www-personal.umich.edu/~jmm/ papers.html>

Yi-Nung Yang, “An Introduction to Network Effects” available at < http://yaya.it.cycu.edu.tw/online/ch1.htm >

Why Offering at EECS

User

Goals Engineering

Design Goals

System

Design

System

Performance

User

Statistics

Tech. Performance loop

User performance loop

• User Centered vs Tech. Centered Design

Definition of Internet Economics

• Definition: the Study of the Market for Internet Services

==> Economics of Transport Aspects as Emphasis

• Information and Computing Economy ==> a Larger Scope

What Are Special?

• Zero Marginal Cost

• Unknown User Demands

• Negative and Positive Externalities==> Tragedy of Commons ?

• Very Fast System Evolution : Users, Services and Technologies

Economic FAQs about Internet

• Background– What is Internet?

– Where did it come from?

– What do people do on the Internet?

– How big is the Internet?

Internet Structure

WAN - ISP

Sending 48 data bytes to rpcp.mit.edu [18.172.0.244]

1:Rcvd ICMP pkt type 11: [129.2.114.1] ? in 4 msec.2:Rcvd ICMP pkt type 11: [128.8.1.223] ? in 3 msec.3:Rcvd ICMP pkt type 11: [206.205.243.1] ? in 14 msec.4:Rcvd ICMP pkt type 11: [165.117.50.86] ? in 13 msec.5:Rcvd ICMP pkt type 11: [198.32.186.2] ? in 247 msec.6:Rcvd ICMP pkt type 11: [4.0.1.93] ? in 27 msec.7:Rcvd ICMP pkt type 11: [4.0.1.89] ? in 20 msec.8:Rcvd ICMP pkt type 11: [4.0.2.126] ? in 35 msec.9:Rcvd ICMP pkt type 11: [4.0.2.34] ? in 35 msec.10:Rcvd ICMP pkt type 11: [4.0.2.122] ? in 36 msec.11:Rcvd ICMP pkt type 11: [4.0.2.86] ? in 54 msec.12:Rcvd ICMP pkt type 11: [199.94.205.102] ? in 42 msec.13:No packet received from intermediate hop.14:Rcvd ICMP pkt type 11: [192.233.33.3] ? in 62 msec.15:Rcvd ICMP pkt type 11: [18.168.0.11] ? in 38 msec.16:Rcvd ICMP pkt type 0: [18.172.0.244] ?, 48 bytes in 58 msec.

TraceRoute Statistics for rpcp.mit.edu16 packets transmitted, 15 packets received, 6% packet lossround-trip (ms) min/avg/max = 3/45/247

For help on packet types, see Help Tab.

IAPIAP

LAN LAN

mss.umd.edu rpcp.mit.edu

What Do People Do on Internet?

• Traffic (by Bytes, Sept. 1994)– 32% file transfer

– 13% information discovery (gopher/WWW)

– 11% Usenet news

– 10% overhead (IP, DNS)

– 6% email

– 5% remote login

Updated Statistics ?? HW1

How Big Is the Internet?(to be updated)

• Size: transmission capacity & traffic

• U. S. : 60 - 70% of Internet users and host computers

• Study long distance instead of local traffic

• Distinct Growth Rates– Interstate voice traffic 8% (in minute of use)

– Capacity/traffic of private links 15-20%

– Capacity/traffic of public Internet 100%

• Factor of distance decreasing in tariffs/costs but increasing with link capacity

• Local traffic stays significant (social behavior)

• Data overtaking voice in 2002 predicted

D:\Courses\Netnomics\Lecture2\internet_size.ps (p20-)

Economic FAQs about Internet• Organization

– Who runs the Internet?

– What is the structure of the Internet?

– What are the backbone networks (in Taiwan) ?

– What was the NSFNET ( are TANET, HINET& SEEDNET) ?

– How much did NSFNET (do these nets) cost?

– Who provides access outside of Taiwan?

Internet Governance

• Standards– Internet Engineering Task Force (IETF)

– "We reject kings, presidents, and voting. We believe in rough consensus and running code.” - IETF Credo

• Architecture– 99% distributed (Gillett and Kapor)

– Centralized IP address & Domain names

How Much Did NSFNET Cost?

• $11.5 M/year to Merit/ANS– 80% as lease payment for lines + routers

– 7% for Network Operations Center

• $7 M/year as subsidies to regionals

• If 10 million US users ==> $2/user-year

Q:Do you want to bill the users?

Services provided by ISP

• Internet access service– connect service

— dial-up

— leased line

— FramRelay

– E-mail,WWW,FTP,Gopher,Telnet,Archie,IRC(Internet Relay Chat),Usenet

– Web Hosting,Share Disc

• Other service– Network System Consultant & Project

– WWW Setup & Home Page Design

– Software Development & Resell

– Hardware Resell & Setup

– Hardware Rental

– Magazine & Media

• provide WAN connection

PPP,SLIPdial up line

Back-Bone

LANLeased line

Leased line to other ISP (Interconnection agreement)

Router

Mail Server

Name Server

WWW Server

Proxy Server

FTP Server

ISP architecture:

Shell account

ISP Back-Bone Architecture

• Back-Bone– routers connected with one another by private line

– leased line from telephone company

– cost:leased line tariff,routing hardware and soft ware

WAN Service provide by telecommunication company

(Carrier Service)

• Point to Point– Analog phone line

– Digital data service

– Circuit switched

• Multi-point to Multi-point– Fast Packet Switching

– Frame Relay

– SMDS(Switched Multimegabit Data Service)

– ATM

全國 ISP使用人口

• 本次調查，各 ISP可承載撥接用戶數總和為 2,531,674 人

• 據 NII科技專案 88年 6月調查，台灣地區網路總用戶為 4,020,000 人，其中撥接用戶為 2,440,000 人

ISP公司服務項目與特色

• 全國統一撥接門號 9家• 電子郵件信箱 37家• News25家• 網路傳真 14家• 個人化首頁空間 23家• 主機代管 35家• 過濾垃報郵件 17家• 24 小時諮詢 13家

11吉立 通

12年代 影視

6王友 科技

7NEC台灣

24悉達 資訊

37廣通 科技

9立通 科技

23香港 電訊

14和信

4元碁 資訊

22英普 達

13協志 科技

TIPO

HKT

30新絲 路8

台灣 網易

31新網 資訊

18金融 家

20信易 通

29微傳 電訊

32瑪凱 電信

33福將 昌

1上合 資訊

2大眾 國際

5太聯 科技

10仲琦 科技

15易訊

16昇源 資訊

17東森

21南訊 企業

25智躍 科技

26華訊 網路

27隆傑 資訊

28鈦格 科技

34精業

35網宇 國際

39震亞 國際

40翰傑 科技

41隨通 電訊

GIP

36網達 國際

38Seednet

TTN

Acer

3Hinet

TANET

Aunet

TWIX

ISP全 國連 網 架 構 圖

香港

韓國

新加坡

法國澳洲

日本

USA

HiNet

SeedNet香港電訊

精業

廣通

台灣NEC

英普達

南訊

大眾

年代

王友

微傳

仲琦

瑪凱

震亞

長榮吉利通

中國

荷蘭英國

泰國

協志512K

T1

T1

T1

T1衛星

2 T1條T1

512K

3 T1條

2 384K條

512K

+衛星6 T1條

T1

DS1

3 T1條

2 T3條

512K

2 512K條

110M

T3

T1

384K

NEC日本

T1

T1

T1

T1

T1

2.048M10.256M 2.048M

1.544M2.56M

3.088M

512K

4 T1條

T1

T1

:製作者 王仁昌

ISP國內 對國外連網圖

國外聯網頻寬

43%

30%

12%

2%

2%

1%

1%

2%2%

1%1%1%2% 中華電信

數位聯合電信

年代影視事業網路事業部

協志科技

和信超媒體

英普達資訊科技

香港商香港電訊

廣通科技

仲琦科技

大眾國際電信加值網路服務

吉立通電訊網路

南訊企業

I SP其它各家 總和

服務品質目標

• ISP公司一般資料– 服務品質目標：封包遺失率、封包來回時間、撥接成功率及其他

– proxy容量• 例子

服務品質目標

封包遺失率 封包來回傳送時間公司名稱 Proxy容量

國內 國外 國內 國外

中華電信Hinet

400GB頻寬流量 40Mbps ≦ 5% ≦ 10% ≦ 15ms ≦ 250ms

撥接費率

• 撥接費率試算– 輕量級用戶，中量級用戶，重量級用戶– 用量：每月 10小時， 20小時， 60小時

• 觀察– 各 ISP收費標準差距頗大– 較小型 ISP有多家提出不限時數方案以吸引顧客，可能不敷成本，或服務品質無保障