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Cost recovery subject to significant regulation and government oversight. Settlements are generally transparent.
Network operators provide transmission, possibly with service enhancements.
Settlements based on traffic flows and charged on minutes of use. (May include a fixed component to recover non-traffic sensitive costs.)
International traffic settled on measured traffic volumes, and a "half-circuit" approach to sharing the costs of the international link.
Settlements typically operate on a destination specific basis.
Under the accounting rate settlement model, the same system applies for all network operators, regardless of size, traffic volume, or geographical reach. (As traffic moves away from the accounting rate model, larger operators will be able to negotiate cheaper access arrangements.) |
Little or no regulatory oversight. ISP contracts are typically subject to non-disclosure agreements, making it difficult for outsiders to determine access terms and conditions.
ISPs combine transmission and content, making it difficult to decouple the costs of each element.
Cost recovery based on link capacity. Charged on bandwidth and derived throughput of the link.
ISP network access provides onward transit to many other networks and destinations. In the extreme this provides global reach. ISPs can exploit this access to reduce their costs, using "hot potato routing."
ISPs use different charging models, depending on the characteristics (and bargaining power) of the ISPs involved. |