On Mon, 30 Sep 2002 11:48:17 -0600, "Derek Scruggs" <[EMAIL PROTECTED]>
wrote:

>> But that confuses the snail-mail concept of fixed cost (homeowner
>> purchases mailbox for a set price, regardless of how much or little mail
>> they receive, since the variable cost if borne by the sender) with the
>> e-mail concept of variable cost (increasing overhead and ISP fees borne
>> by *both* the user and the ISP themselves)
>
>So a company that builds out a mailroom doesn't have any variable cost
>associated with that? 

A facility is a fixed cost, part of overhead. The staff required to run
the facility is either fixed or variable, depending on whether their
work is quantity-driven or not. Most places don't call in extra help
into the mailroom when they get more mail, so most places wouldn't
experience a higher-than typical expense due to additional inbound
sender-paid mail.

>The USPS (or FedEx or UPS) that has a branch office to
>deliver your mail/packages? If more mail/packages are sent, they need more
>facilities/personnel to handle it. There's a reason UPS resists union
>demands...

Yes, but they also get paid for handling those packages. Inasmuch as
getting paid to move mail is their raison d'etre, including them is
hardly a valid comparison.

>> The fundamental question remains - if a commercial e-mail sender pays
>> postage, to whom do they pay it? If they pay my ISP, they have not
>> adequately compensated me for my time.
>
>And Lands End compensates you for your time when you get a catalog from them
>that you didn't request? 

It's Orvis, not Land's End, thankyouverymuch :-) And no, they don't -
and the amount of time I expend on that catalog is de minimus, as it
goes in the trash with the expended envelopes of the mail that I *did*
want. I spend less than 1 second/day on unwanted, sender-paid paper mail
(That's *less* than a person generally spends 'just hitting delete', by
the way). The fact that the sender sent it does not raise my taxes, nor
does it raise my postage. This is the crux of the difference between
e-mail and postal mail. With postal mail, volume does not transfer cost
onto the receipient(s) - only the sender(s).

>Yahoo sends me popup ads through my browser that I
>don't want - should they compensate me for that? In a perfect world, yes.
>Meanwhile, back on planet Earth...
>
>Wait - Yahoo *does* pay extra - to their bandwidth providers. 

No they don't. They pay their bandwidth providers the same monthly bill
that they have to, dependant upon how much bandwidth they've purchased.
Whether or not *you* or *I* get a popup doesn't change the price of an
OC-12 - unless they're configured for bandwidth-on-demand, that is.

>Who in turn
>ultimately shares some of that revenue with *my* bandwidth provider as part
>of their peering agreements, which does *not* share that revenue with me.
>Thieves!  Hmmm... And I *don't* pay (incrementally, per-packet) extra for
>bandwidth - I only pay in large blocks. Perhaps I should demand my money
>back from my ISP since I only use 25GB of my 30GB monthly allocation.

You're confusing the issue, Derek. Consumption of bandwidth is a
relatively unimportant part of the spam cost structure. The disk space
and people are much more expensive, and are more directly relevant. The
cases where an ISP is so inundated with spam runs that they have to go
out and buy more pipe is so rare (if not entirely non-existent) as to be
a non-issue.

>> The concept of adequate protection is at work here, since the sending of
>> e-mail contributes to the depreciation of overhead assets and the
>> increase of overhead costs for both user and ISP.
>
>Yes, but the mere fact that postage is charged *at all* will have a dramatic
>effect on the capacity utilization of these assets.

I agree with you. Back when CompuServe charges a fee for every e-mail
sent, nobody spammed from CompuServe.

>I understand your desire for a perfect market, but the perfect is often the
>enemy of the good. IMO this binary approach to spam - solve the problem
>completely or not at all; block everything or nothing at all - is almost as
>much a barrier to success as the spammers themselves. 

Well, you're certainly not getting an argument from me on that.
Personally, I'm against blocking since I think it deliberately breaks
the network (not that I have any better alternatives, it's just my
opinion). Frankly, the "it all has to stop now or nothing" approach
never gets anywhere in any debate - never has, never will, and this
situation won't be the one to change that trend.

>The goal of e-postage is to provide incentives where none exist. 

To whom is the incentive offered? The recipient ISP, or the recipient?
Or both? That is, after all, my question that started this line of
discussion.

>It *may* not work, but I know
>that *not* doing anything definitely *won't* work. (Actually, incentives
>currently exist, but they're the Wrong Kind.)

Agreed, on both points.

>Until very recently (historically speaking), the idea of fixed price for a
>product did not exist - everything was bartered. 

Well, bartering is not a concept of linear time - rather a
characteristic of a specific period of market maturation, which is not
rigidly fixed to a timeline.. In the YooEss, parts of Asia and much of
Europe, we're past that stage. Much of the rest of the world is not.

>Economically speaking, this
>is usually the most rational approach to determining the true value of
>something. But fixed pricing is rational at the macro level, too, because it
>removes the variable cost (for both sides) of negotiating with every
>potential buyer. BUT it is somewhat unfair at the micro level because some
>people could negotiate better deals for themselves.

Actually, from a business analysis point of view, I might debate that
the additional (macro) variable cost of having barterers ready for every
potential customer would raise the bartered-cost-to-consumer so high
that the consumer would never be able to get a better price than they do
in the (micro) fixed-price world. 

>In the name of scale, and speed, however, society puts up with it. I
>suspect that a similar phenomenon would emerge with e-postage.

How so? E-postage would be a bartered commodity? Or, commercial mailers
would only e-mail to ISPs who required less e-postage, rather than more
e-postage, comparatively speaking?

>The point of all this rambling is to point out that e-postage does not have
>to be perfect to be successful. There are plenty of examples all around us.

Agreed.

By the way, interesting in doing a session on e-postage at the next
SpamCon? Might get some interesting discussion going.


Ted Gavin                http://member.newsguy.com/~tedgavin
------------------------------------------------------------
 Harvard's Memory Loss Clinic - established in 1952, 1967,
 and for the first time, in 1981.
                                 - "Mr. Show", 1995
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