best effort has economic problems

Sun May 30 18:50:38 UTC 2004

On Sun, 30 May 2004, Stephen Sprunk wrote:

> This problem has little to do with BE vs. QoS.  It's a temporary market
> imbalance caused by providers willing to sell service for less than cost; in
> the absence of external factors, eventually enough providers will go under
> for prices to rise back above cost.

I am actually not sure that someone actually have to go under. When the 
spare capacity sold under cost is all used up, it doesn't make sense to 
build out to sell, so nobody will want to sell at these under cost prices 
any more. Either demand will make the prices go up and then people will 
start building again, or companies will start to cancel contracts that 
gives them the smalles amount of money, and sell that at a slightly higher 
price.

Or... technology will catch up and the cost of producing the capacity 
needed will match the current prices.

What will happen is probably a combination of all the above.

-- 
Mikael Abrahamsson    email: swmike at swm.pp.se