to the major traffic exchange sites that developed, and agreed to exchange traffic among each other both for their own direct customers and on behalf of the lower-tier ISPs that used them for "upstream" service [11]. Tier 2 providers also had national networks that agreed to peer with each other and with the Tier 1s, though they may have had to pay for "transit" when relaying others' traffic across Tier 1 providers [12]. About two dozen providers probably warranted being viewed as Tier 2. Most regional and retail ISPs purchased upstream service from a Tier 1 or 2 provider. The price of upstream service was, like the price of commercial access itself, usually based on capacity, not on measured traffic. An ISP would have a price per megabit or for a given type of interface, such as DS1 or 10 Mbps Eth- ernet. Since IP was connectionless, there were no calls that could be easily metered. Raw packet or byte count could be, but a packet to an in-house server would be indistinguishable from one going around the world. Geographic rate averaging ("postalized" pricing) was as much a practical necessity as a conscious decision. An Industry Structure Develops The earliest ISPs were, for the most part, in the connectivity business. PSInet, ANS, and BBN were selling businesses and institutions, such as universities, access to the developing global Internet. Their customers had their own com- puters-their own servers-and thus did not need much more than a big pipe. This turned into a commodity business. Although the performance of different networks was not identical, the basic service was quite straightforward. But consumers were a different business altogether. Even before 1993, sev- eral million American consumers had modems and subscribed to on-line service providers such as Compuserve, GEnie, Prodigy, AOL, Delphi, and The Source. These services provided electronic mail, file transfer, chat, on-line forums, and The Great Telecom Meltdown other information services. By 1994, a consumer ISP business was starting to develop. T