Subject: Cable Co's view: NAT is bad because we want to charge per IP

From: stanislav shalunov <[email-masked]>
Date: 27 Nov 2001 17:51:03 -0500

NAT is an ugly hack that's impairing people's connectivity, right?
For some, it might be.  Others find different faults with NAT.
A highly unusual for an IETFer (and very disturbing) perspective of
cable companies is provided in an article in CED magazine "The CAT and
the NAT" by Leslie Ellis, Technology Analyst:

http://www.cedmagazine.com/ced/2001/1101/11d.htm

(Link appeared on Slashdot.)

This article proceeds to describe NATs as incarnations of everything
evil.  One of the reasons they are so evil, according to Leslie Ellis,
is that they allow users to avoid paying for extra IP numbers:

> What's the value of the stolen goods?  Revenues associated with
> additional IP addresses, for one.  Let's say one in 10 of the 5
> million U.S. cable modem subscribers are usurping IP addresses
> without paying the $4.95 per month fee that's typically charged
> (beyond a pre-specified limit, which varies MSO to MSO.)  Right off
> that bat, that's just shy of $30 million lost, annually.

[I replaced the Microsoft character for the apostrophe with ASCII in
the paragraph above.]

I can see it: "So, you'd like to purchase a /48 with your
eye-pee-vee-sex package?  Are you saying it should be the default
allocation?  I don't know who told you that it should be the default,
but we can do that for you.  It would be for our everyday low price of
$6044629098073145873530880 per month, first month prepaid.  Yes,
that's six septillion, forty-four sextillion, six hundred twenty-nine
queen-... quintillion...  Are you there?  Hello?  We actually do have
a 15% discount package!  Hello?!"

The article then proceeds to describe some snake oil "solution" (the
CAT part) that would "go one step further, essentially saying,
`Pardon, NAT, but what's that behind you?'" (Microsoft characters
replaced with ASCII, again).

The important thing to realize here is that there are many people who
read "THE PREMIER MAGAZINE OF BROADBAND TECHNOLOGY" and absorb the
infinite wisdom of its Techology Analysts.

Boy, am I glad I don't have to deal with a cable company!

"Cable...  Where idiotic business models and complete lack of
understanding of networks are combined!"

P.S.: Just to be clear, the other problem that the article finds with
NAT is that it enables you to share your connection with neighbors.

-- 
Stanislav Shalunov		http://www.internet2.edu/~shalunov/

"Nuclear war would really set back cable [television]."  -- Ted Turner

---

From: "Anthony Atkielski" <[email-masked]>
Date: Wed, 28 Nov 2001 01:05:55 +0100

You'd think that an ISP, cable-company or not, would tend to charge by volume or
connection time rather than the number of IP addresses in use.  The last of
these makes about as much sense as charging for all the one bits transmitted,
and leaving the zeroes free.

---

From: Ed Gerck <[email-masked]>
Date: Tue, 27 Nov 2001 22:20:17 -0800

Trying to make NAT guilty by association would be funny if
it weren't ridiculous.  Of course, one can misuse even water --
what else is new? And there are those who would much rather
have an Internet  control center, as long as it is their own and
they get paid for it.

But the whole idea of limiting connections at the end of a
TCP/IP connection is misguided.  The cable operators are
trying to sell seats in my own house.  By this kind of thinking,
I can't have my family sit around the TV set when I buy a DVD
movie.

Trying to mud the waters by having a diagram with other houses
using a NAT connection was also misleading.  The essential point
missed here is that users have the right to use the Internet TCP/IP
connection in their  home, and as a TCP/IP connection is extensible
so be it. Users may not be able to resell that connectivity but they
surely are entitled to use it. Also with wireless interfaces around the
house.

Ellis' article also missed the opportunity of clarifying the abuses by
the cable companies in trying to control what users do with the
Internet connectivity they buy. Those cable companies call
themselves "broadband" but they are just an old pay-per-view
TV network.  A TV network is not an internet. And maybe that is why
broadband is not advancing as people predicted -- not because of
NATs but because of lack of vision of those companies.  They
want to promise the moon but they wish to deliver a rock.

I regret that Ellis must now be found guilty by association ;-)

Cheers,

Ed Gerck

---

From: "Francois D. Menard" <[email-masked]>
Date: Wed, 28 Nov 2001 09:37:11 -0500

Cable companies in Canada charge "per computer" connected to the cable
modems.

This is the subject of several procedures in the CISC HSWG.

See http://www.crtc.gc.ca/cisc/eng/cisf3g8b.htm for a list of
contributions.

-=Francois=-
[email-masked]

-----Original Message-----
From: [email-masked] [mailto:[email-masked]] On Behalf Of
Anthony Atkielski
Sent: Tuesday, November 27, 2001 7:06 PM
To: [email-masked]; stanislav shalunov
Subject: Re: Cable Co's view: NAT is bad because we want to charge per
IP

You'd think that an ISP, cable-company or not, would tend to charge by
volume or connection time rather than the number of IP addresses in use.
The last of these makes about as much sense as charging for all the one
bits transmitted, and leaving the zeroes free.

----- Original Message -----
From: "stanislav shalunov" <[email-masked]>
To: <[email-masked]>
Sent: Tuesday, November 27, 2001 23:51
Subject: Cable Co's view: NAT is bad because we want to charge per IP

> NAT is an ugly hack that's impairing people's connectivity, right? For

> some, it might be.  Others find different faults with NAT. A highly
> unusual for an IETFer (and very disturbing) perspective of cable
> companies is provided in an article in CED magazine "The CAT and the
> NAT" by Leslie Ellis, Technology Analyst:
>

---

From: Joe Touch <[email-masked]>
Date: Wed, 28 Nov 2001 09:12:36 -0800

> is that they allow users to avoid paying for extra IP numbers:

Interesting spin, esp. given the promotion of NATs _BY_ the cable cos 
and ISPs specifically to prohibit users from running web servers out of 
their home.

Live by the (rusty) sword, die by it, apparently.

Joe

---

From: Fred Baker <[email-masked]>
Date: Wed, 28 Nov 2001 11:19:24 -0800

At 04:05 PM 11/27/2001, Anthony Atkielski wrote:
>volume or
>connection time rather than the number of IP addresses in use.

dumb question.

I see a longish thread about "so why does one need IPv6, there is in fact 
no shortage of IP addresses, and IP addresses are not in fact a scarce 
resource in the network today".

I see a longish thread about the fact that some cable companies apparently 
are desperate to charge per IP address (something one can only do if IP 
addresses are in fact a scarce resource) and want to nullify a technology 
that might mask the scarceness of that resource.

It seems to me that these two can't both be true. IP Addresses cannot at 
once be scarce enough to charge for and non-scarce enough that scarcity is 
a non-issue.

Does anyone else see something schizoid about this discussion?

---

From: Alex Zinin <[email-masked]>
Date: Wed, 28 Nov 2001 11:57:52 -0800

> Does anyone else see something schizoid about this discussion?

The amount of time and BW people spend on it...

Alex.

---

From: Eric Rosen <[email-masked]>
Date: Wed, 28 Nov 2001 15:28:48 -0500

Fred> I  see a  longish  thread about  the  fact that  some cable  companies
Fred> apparently are desperate  to charge per IP address  (something one can
Fred> only do if IP addresses are in fact a scarce resource)

I think  you miss the  point here.  The  cable companies want to  charge per
computer, and  the only way they  can do this is  to count the  number of IP
addresses they  see.  If you use NAT,  they only see one.   This has nothing
whatsoever to do with scarcity of addresses.

Even  with IPv6, they  would still  want to  charge by  the IP  address, and
people would still use NAT to save money.

---

From: Daniel Senie <[email-masked]>
Date: Wed, 28 Nov 2001 15:40:31 -0500

>Does anyone else see something schizoid about this discussion?

Yes.

To add even more of a schizoid flair, ATT Broadband is selling a "business 
service" in New England now (and probably elsewhere). For a few hundred 
bucks a month, and a one time charge for equipment, they set you up with a 
router of some sort running NAT which they can remotely manage, an SLA that 
says they'll possibly support you better than they do the home users, and 
the option of paying more for extra downstream bandwidth. So here we have 
the cable company SELLING the NAT box... I'd hoped they'd offer routed 
subnets when they got to offering business service, but no.

The other interesting oddity about the discussion threads is the assumption 
on the part of many that the only way it'd be useful for a water meter, 
kitchen appliance or other device in the house to interact with the 
Internet is for it to be polled from outside. It's quite feasible for 
devices to initiate the communication instead. Interestingly, if the device 
initiates, this would just happen to work with most NAT boxes on the 
market. Of course that eliminates the address-space-shortage argument, so 
it's more fun to talk about polling the devices, even if impractical at 
present.

-----------------------------------------------------------------
Daniel Senie                                        [email-masked]
Amaranth Networks Inc.                    http://www.amaranth.com

---

From: "Dr. Carsten Bormann" <[email-masked]>
Date: Wed, 28 Nov 2001 21:42:30 +0100

> once be scarce enough to charge for and non-scarce enough that

Fred,

scarcity is not the point.  Differential pricing is.
ISPs need a way to charge vastly different prices for "business" and
"consumer" access.
Or, in other words, they need a way to devalue consumer access to be able to
continue charging more for business access.
One dynamic vs. multiple static addresses gives them that way.
That's all -- no scarcity needed.
(Though it's convenient to have a "technical" reason to explain this
business decision.)

Gruesse, Carsten

---

From: Robert Moskowitz <[email-masked]>
Date: Wed, 28 Nov 2001 15:39:53 -0500

Fred,

I do not see the action of the cable companies to charge per IP 
address.  Even with plentiful addresses, they would want a model that got 
them the most revenue.  They would like to charge for each TV you connect 
to the cable too, but the PSCs and FCC stop that.  And that is what it will 
take.  Consumers taking this to the gov and getting rulings on acceptable 
practice.

As much as I might like to think otherwise, IPv6 won't stop this 
crazyness.  Might even feed it.

---

From: Keith Moore <[email-masked]>
Date: Wed, 28 Nov 2001 15:51:26 -0500

> IP Addresses cannot at once be scarce enough to charge for and 
> non-scarce enough that scarcity is a non-issue.

IPv4 scarcity is an issue, at least for customers.  Whether it's
an issue for large ISPs is a different question.

The cable ISP isn't really charging per-IP addresses; rather it's
charging per-residence.  The motiviation is not the scarcity of IP 
addresses, but the scarcity of available dollars per customer -
in other words, they have an assumption that the amount of income they 
can get from residental Internet service is more-or-less a constant
times the number of residental customers served.  

So they use flat-rate, per-residence pricing to attract the largest 
number of residential customers.  But they get annoyed when the 
service is shared over multiple residences.  They'd get just as 
annoyed if the mechanism were IPv6 instead of NAT.

Keith

---

From: Lloyd Wood <[email-masked]>
Date: Wed, 28 Nov 2001 21:30:14 +0000 (GMT)

On Wed, 28 Nov 2001, Fred Baker wrote:

> addresses are in fact a scarce resource)

that's where I think your reasoning goes awry.

> and want to nullify a technology

No. Consider local utility.

ip addresses are not a scarce resource, but they're not all
immediately useful; ip addresses that are useful to talk to your cable
company down your cable company's wire are immediately useful to you,
so that you'd be willing to pay for them.

It's in the cable company's interests to create an artificial scarcity
of addresses from the pool of selected-to-be-useful ip addresses that
they have, to maximise revenue from that pool. And it's their pool, so
they can charge as much as they can get away with for them.

Or, the ocean is full of water, so why should you have to pay for
the stuff that comes out of your tap? Because having it is useful
locally for you, so you pay your local utility to supply it to you.

Universality does not imply utility. Global abundance of raw materials
does not imply local abundance of suitable materials for use.

L.

the only really schizoid thing is comparing macroeconomics with
microeconomics.

<[email-masked]>PGP<http://www.ee.surrey.ac.uk/Personal/L.Wood/>

---

From: "Anthony Atkielski" <[email-masked]>
Date: Wed, 28 Nov 2001 22:46:06 +0100

Fred writes:

> It seems to me that these two can't both be true.
> IP Addresses cannot at once be scarce enough to
> charge for and non-scarce enough that scarcity is
> a non-issue.

They are becoming scarce in the way that they are managed; they are not yet
scarce in absolute terms (total number of possible addresses).  This is the same
problem that the telephone system has and has had in the past; that's why North
American area codes can now contain digits other than 0 and 1 as the second
digit, and local exchange prefixes can now contain 0 and 1 as the second digit.

---

From: "Anthony Atkielski" <[email-masked]>
Date: Wed, 28 Nov 2001 22:49:03 +0100

Eric writes:

> The  cable companies want to  charge per computer
> ...

Why?  Their costs are based on the amount of capacity used, not the number of
computers connected.  A transfer volume of 1 GB per month costs the company the
same whether it is carried out by one computer or ten computers.

---

From: "Tony Hain" <[email-masked]>
Date: Wed, 28 Nov 2001 14:25:20 -0800

Eric Rosen wrote:
> The  cable companies want
> to  charge per
> addresses they  see.

They will eventually learn that with IPv6 there is no predictable
correspondence between machine and the number of addresses it has. Since
their customers will insist on using the privacy option to avoid
traceability as they move around, every node will have as many addresses
per day as the customer believes are necessary to mask that movement. In
this context, movement does not only imply physically moving the device,
but the logical movement from one web shopping site to another. It is
reasonable to expect the paranoid to set their policy to randomize the
address on every new connection.

Tony

---

From: Richard Shockey <[email-masked]>
Date: Wed, 28 Nov 2001 17:31:05 -0500

>times the number of residental customers served.

This is in fact correct and backed up by a vast body of consumer 
research...for various services there are well know "break points" by which 
consumer behavior begins to change irrespective of the perceived value of 
the service.

One of those is $35.00. The cable industry was able to resist intrusions by 
satellite dishes until they began to raise prices above the $40 range 
..that price point became a trigger in the minds of consumers that they 
should at least look at alternatives and it was then that dishes started to 
take off. Consumers essentially do not price shop services below the $40 
range which is why residential telephone prices are deliberately kept close 
to that point thus preventing CLEC from gaining access to the 
market.  Business lines are another matter ..and those CLEC' that focused 
on business lines have done OK.

There are lots of ISP offering good DSL service with static IP addresses 
(usually 4) for 99.00 +  but that is a price point consumers are resistant 
to pay for the perceived value of the service.

Another well known point is $199 once consumer electronics start to hit 
that price point ..such as VCR's or DVD the rate of adoption sharply rises.

This is Consumer Marketing 101 offered at fine business schools everywhere.

Richard Shockey, Senior Manager, Strategic Technology Initiatives
NeuStar Inc.
45980 Center Oak Plaza   Bldg 8     Sterling, VA  20166
1120 Vermont Ave NW Suite 400 Washington DC 20005
Voice 571.434.5651 Cell : 314.503.0640,  Fax: 815.333.1237
<mailto: [email-masked]> or
<mailto: [email-masked]>
<http://www.neustar.biz>
<http://www.enum.org>
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

---

From: Tony Hansen <[email-masked]>
Date: Wed, 28 Nov 2001 20:23:22 -0500

I wish it were per-residence pricing. Here, if you want a 2nd (3rd, 4th,
...) IP address, the cable ISP expects you to connect a 2nd (3rd, 4th,
...) cable modem to the cable line. And they then charge additional fees
for each such additional connection.

	Tony Hansen
	[email-masked]

---

From: "Donald E. Eastlake 3rd" <[email-masked]>
Date: Wed, 28 Nov 2001 23:58:40 -0500

As a very rough rule of thumb: In a competitive situation, prices tend
towards costs plus some profit margin. In monopoly situations, a
profit seeking monopolist tries to maximize their profits by pricing
at the "benefit" to the customer minus just enough to give the
customer some incentive to buy.

A customer with a NAT arguably gets some more benefit from the network
connection than a customer with just one computer hooked up. If their
provided can successfully impose a substantially higher price on the
NAT customer even when the provider's costs are the same, I would take
this as evidence that the provider was exploiting monopoly power to
increase their profits.

Donald

From:  "Anthony Atkielski" <[email-masked]>
Message-ID:  <[email-masked]>
To:  <[email-masked]>, "Fred Baker" <[email-masked]>
Cc:  <[email-masked]>
References:  <[email-masked]>
Date:  Wed, 28 Nov 2001 22:49:03 +0100

---

From: Matt Crawford <[email-masked]>
Date: Wed, 28 Nov 2001 16:58:57 -0600

> Does anyone else see something schizoid about this discussion?

Not I.  I, as an end user or small site, cannot use just any IP
address.  Not even any old address that has been properly assigned to
me.  I can only use addresses that come from one of my ISP's
aggregates.  And with respect to that kind of address, my ISP is a
monopoly supplier.

---

From: Bob Hinden <[email-masked]>
Date: Wed, 28 Nov 2001 17:09:32 -0800

Anthony,

>same whether it is carried out by one computer or ten computers.

If they charge per computer they get more revenue without, as you point
out,  incurring any additional costs.

Bob

---

From: Brian E Carpenter <[email-masked]>
Date: Thu, 29 Nov 2001 15:41:31 +0100

So the actual question is: how do we ensure that ISPs are motivated
to charge per /64 for IPv6, rather than charge per /128?

Mandating the availability of RFC 3041 addresses would help.

   Brian

---

From: Howard Weiss <[email-masked]>
Date: Thu, 29 Nov 2001 09:43:05 -0500

In the past, why did Ma Bell charge for telephone extensions on a per instrument
basis?  Its was just another way for them to make $$.

--
____________________________________________________________________

Howard Weiss                           (410) 381-9400 x201 (Balt)
SPARTA, Inc.                           (301) 621-8145 x201 (DC)
Suite 300                              (410) 262-1479 (cellular)
9861 Broken Land Parkway               (410) 381-5559 (fax)
Columbia, MD 21046                    email: [email-masked]
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