Consider the average cost of the NSFNET backbone in 1993:
about $
per month, for about
packets per
month. This implies a cost per packet (around 200 bytes) of about
1/600 cents. If there are 20 million users of the NSFNET backbone (10
per host computer), then full cost recovery of the NSFNET subsidy
would imply an average monthly bill of about $0.08 per person. If we
accept the estimate that the total cost of the U.S. portion of the
Internet is about 10 times the NSFNET subsidy, we come up with 50
cents per person per month for full cost recovery. The
revenue from congestion fees would presumably be significantly less
than this amount.
The average cost of the Internet is so small today because the
technology is so efficient: the packet-switching technology allows for
very cost-effective use of existing lines and switches. If everyone
only sent ASCII email, there would probably never be congestion
problems on the Internet. However, new applications are creating huge
demands for additional bandwidth. A video e-mail message
could easily use
more bits than a plain text ASCII e-mail with
the ``same'' information content and providing this amount of
incremental bandwidth could be quite expensive. Well-designed
congestion prices would not charge everyone the average cost of this
incremental bandwidth, but instead charge those users whose demands
create the congestion and need for additional capacity.