Sprint peering policy

Tue Jul 2 01:10:42 UTC 2002

>>> There is no way for a company to price transit below their peering
>>> costs and make money.
>> this may be true, but it's the level(3) business model.  and the
>> rest of the industry got suckered into dropping their drawers to
>> match.  kinda like a bunch of old men drinking poison to see who
>> dies first.
> So, what's it going to take to make everyone wise up?

the large ones are.  this year's strategy is to use chapter 11 to
shed the stockholders and lower the debt service burden, see
<http://www.thestreet.com/markets/marketfeatures/1359535.html>, or
to be bought by an rboc.  after kpn/quest and wcom, doing a clean
chapter 11 will be seen as honest business.

at the same time, the market will continue to narrow and get even
more bi-modal, with a few large players and many very small ones.
think of it like video stores, you think there is variety at a
local level, but blockbuster owns the lion's share of the market.

then prices go back up, as it is easy to make the point that then
current pricing is not supportable.  the large folk make money at
last.  the small fry, with much higher cost structures struggle
along, not making real money, but making good enough statistics to
keep government intervention at bay, or even better, to focus the
government on protectionism, fixed profits, and/or subsidization.

this is a grim picture.  but i am confident that the brilliant
engineering minds here can come up with an innovative technical
solution to this depressing business and social problem.

randy