November 25, 1998 Web posted at: 10:30 AM EST by Bob Metcalfe, InfoWorld columnist

From...

(IDG) -- One of my least popular ideas, ever, is the Pay-As-We-Go Internet (TM) -- a nextgen Internet with infrastructure for usage metering and billing.

Many of our Internet bills will be paid by advertisers and governments, but with the right infrastructure, we'll be paying more of our own bills. We won't want an Internet in which we get only that for which advertisers and governments are willing to pay.

And although flat rates should not be outlawed, metered rates should be offered and will be chosen by many Internet users to pay as we go for access, services, and content. These will be metered by the second, by the kilopacket, by the megameter, by the message, by the call, by the page -- whatever works.

Why pay as we go? Light users will rebel at paying high flat rates that subsidize heavy users. Internet service providers will find heavy flat-rate users unprofitable; ISPs are already capping unlimited usage plans. Metered prices will help to coordinate supply and demand. And usage metering will deter waste, for example, spam.

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I've had the honor of getting a recent Pay-As-We-Go column picked up by the Cable News Network, which even ran a poll that asked, "Would you be willing to pay as you surf the Net?" That week 93 percent of 3,451 CNN viewers voted no. See cnn.com/TECH/computing/9809/23/paynet.idg/index.html.

Many CNN viewers think that because they need the Internet, it should be free. Many think the Internet is already paid for by the government and should therefore be free. Many think that if the Internet was metered, they would have to stop using it, no matter what the price. So they've been telling me that I'm a heartless, rich, greedy capitalist pig in the pocket of large corporations. Well, I'm not a pig.

One university student wrote that advocating the Pay-As-We-Go Internet makes me "worse than Hitler." I recommended that he read a book, Explaining Hitler (Random House), recently out from my childhood chum Ron Rosenbaum.

I also recommended that this student learn some economics. He said he is, but Marx still haunts American universities, so I'm recommending another book, Eat the Rich, A Treatise on Economics (Atlantic Monthly Press), by P.J. O'Rourke, chief of the foreign affairs desk at Rolling Stone.

Despite all of this rejection of the Pay-As-We-Go Internet, I've heard from many companies preparing to provide metering and billing infrastructure for ISPs. Here's a partial list ranging up the San Francisco peninsula.

• GRIC Communications, in Milpitas, provides metered billing and settlement services to 400 ISPs in 100 countries so they can offer global roaming, remote access, fax, and telephone to 16 million dial-up Internet users.

• XACCT Technologies, in Santa Clara provides an IP billing system that enables ISPs to have flexible pricing models for e-mail, telephone, video, virtual private networks, content -- and to give their customers meaningful bills.

• Portal Software, in Cupertino, provides customer management and billing software to enable ISPs to have varied pricing plans for new services.

• Ipass, in Mountain View, provides 500 ISPs in 150 countries with infrastructure to support roaming services, remote access, and, early next year, exchange point settlements.

• Narus, in Redwood City, will announce its technologies on Dec. 2 and its products in early 1999: wire-speed probes that will enable ISPs to analyze traffic and bill for unified messaging, video, telephone, fax, host services, and content.

I'll be back with more about companies providing infrastructure for the Pay-As-We-Go Internet. Although they seem focused on selling to ISPs, corporate information systems may need Pay-As-We-Go infrastructure, too, perhaps for intranet charge-backs or auditing ISP service-level agreements.

Internet pundit Bob Metcalfe invented Ethernet in 1973 and founded 3Com in 1979. Send e-mail to metcalfe@idg.net. See http://www.idg.net/metcalfe.