What do we mean when we say "competition?"

Thu Nov 17 07:35:54 UTC 2005

--On November 16, 2005 9:25:29 PM -0800 David Barak <thegameiam at yahoo.com> 
wrote:

>
>
>
> --- Owen DeLong <owen at delong.com> wrote:
>
>>
>> > Windows 98 price (in 1997) -> $209
>> > Office 97 Standard (in 1997) -> $689
>> > Windows XP price (now) -> $199.
>> > Office 2003 (now) -> $399.
>> >
>> > Want to try that again?
>> >
>> Yes... Here's some more accurate data:
>>
>> Windows 3.1 price $49
>> Windows 3.1.1 price $99
>> Windows 95 (Personal) price $59
>> Windows 98 (Personal) price $99
>> Windows ME (Home) price $99
>> Windows NT WS price $99
>> Windows 2000 Pro price $299
>> Windows XP Pro Price $299
>>
Just because I didn't quote the emails from my history, does
not mean these are not accurate.  These are
the list prices quoted by vendors of M$ products over the years
in my mail history file.  It's not an assertion, it's actual data.
True, they are not the "street" or "discounted" prices, but,
they are the MSRP.

> So it goes from 209 to either 199 or 299 depending on
> whether you want "home" or "pro."  That's hardly an
> egregious markup for a better OS, several years later.
>
Without getting into the argument about which version of
Windows is or is not an improvement, it's certainly the
most expensive OS in the market today:

MacOS X: $99 (List) -- Includes HTTP, DNS, DHCP servers and
other basic essentials like SMTP and LDAP servers, etc.
http://www.apple.com

Windows XP Pro $299 (List) -- Includes HTTP (sort of), but,
no ability to be DNS, DHCP, SMTP, or, LDAP server without
additional software.
http://www.microsoft.com (pricing link)

Solaris x86 $49.95 (CD) -- $9.95 DVD, $0 download
http://www.sun.com (downloads->get solaris 10) Full Server
or desktop Version

Red Hat Enterprise Linux Basic $179 -- Includes all Server
software, but, missing some GUIs for managing, limited support.
http://www.redhat.com/en_us/USA/rhel/compare/client

Fedora Core $0 -- Full server/desktop version
http://fedora.redhat.com

FreeBSD $0 -- Full server/desktop version
http://www.freebsd.org

So... Microsoft has a monopoly on Windows and the basic OS costs
you $299 with virtually no server capabilities.

In the POSIX-style OS world, where you have multiple competitors,
prices range from $0 to $179.

Next?

> I was doing a similar apples-to-apples comparison.
> Look, just accept that not all data points will line
> up with your assertions - find some others instead.
> If there are so many, then there have to be better
> examples than these.
>
True, but, this one does.  There are multiple ways to skin a cat,
and, multiple versions of Windows pricing.  Any way you slice it,
MicroSoft remains the most expensive OS in the market.
Everyone elses OS prices have come down since the days of Win 3.1,
Microsoft's have gone up (about 600% -- $49 to $299).

>
>> Finally, the price of the client software is
>> actually not the primary
>> problem with M$ monopolistic pricing.  It is the
>> back-end software
>> where they really are raising the prices.  Compare
>> NT Server to
>> 2K or XP Server or Advanced Server.  XP AS is nearly
>> double 2000 AS
>> last time I looked.
>
> Microsoft hardly has a monopoly on servers.  If their
> prices are too high, use something else.
>
Microsoft has a monopoly on Active Directory servers.
Microsoft has a monopoly on Exchange servers.

If you are unfortunate enough to need either of these things
(I thank my lucky stars every day that I am not), you have to
buy them from Micr0$0ft.

>
>> > The argument regarding ILECs is reversed.  I
>> > appreciate the citation of Standard Oil, but it is
>> a
>> > fallacy to think that there is a one-to-one
>> mapping
>> > between SO and any/all of the ILECs.
>> >
>> True.  What is the point?
>
> Standard Oil is a strawman argument.  The ILECs are
> dissimilar in nature and behavior from Standard Oil.
> An assertion otherwise requires evidence.
>
I think that the anti-competitive behavior of SBC and that
of SOCA are, indeed, very similar.  If you prefer a more
similar example, we can compare Comcast and SBC, or, perhaps
you would prefer to compare Pacific Bell and US West (prior
to them all becoming part of SBC).

Pick your poison, there's certainly a record of anti-competitive
practices available.

> "History doesn't repeat itself.  Historians do."
> -unknown (to me at least)
>
Unknown and untrue... History is replete with examples of history
repeating itself.  In many ways, WWI and WWII are examples of history
repeating itself.  Korea, Viet Nam, Iraq are examples.  Sure, slightly
different results, but, if you roll dice more than a couple of times,
you usually get different numbers, too.  Many Many Many similarities
in costs, casualties, efficacy, etc.

If you want closer examples:  US Involvement in Viet Nam vs. Soviet
involvement in Afghanistan.  VERY similar results all the way around.

> Don't fight the last war, and especially don't fight
> it in a way which will impede future innovation.
>
Agreed.  Instead of granting further monopoly positions and first-arrival
advantages and again allowing the first provider into the market to
prevent all future comers, let's avoid the fight and separate the
LMI from the overlying service.

>
>> Since the market is risky to deploy LMI once, you
>> will have a hard
>> time that the market exists to pay for multiple
>> copies of a given
>> LMI in order to support competition.
>
> If there's money in it, then someone will fill the
> need.
>
> I still haven't seen the justification for treating
> layer-1 last mile differently from layer-2 last-mile,
> or for that matter layer-3 last mile.  Why shouldn't
> the city just say "everyone hop on our citywide IP
> network, and then everyone can compete at higher
> layers of the stack?"
>
That's certainly a viable option, however, like you, I think that we should
preserve as much as possible of the competitive landscape.  I don't want to
pick "IP" as the winner for everyone.  I think IP is the winner, and, I 
think
it will continue to be the winner for some time.  Moving that far up the
stack means you are dictating a lot more of the solution and removing a lot
more opportunities for innovation.

If you limit it to the scope I speak of, you are limited to an area where
very little innovation has occurred in the last 50 years, or, is likely to
occur in the next 50.  Category 3 UTP hasn't changed in more than 50 years.
Fiberoptics date back to the 1840s with singlemode being introduced in 1961
and adapted for telecommunications in 1966 and it's current form being
perfected around 1970.  75 ohm TV Co-Ax has also been pretty standard
for a very long time (RG58 is, I believe, the most common)

Given universal household access to singlemode, UTP3, and RG58, I don't 
believe
there is a single terrestrial facilities based communications service 
available
today that would be impossible (obviously, the current cost of DWDM hardware
and supporting backbone equipment makes OC-192 to the home impractical 
today,
but, not impossible given the facilities above).

I cannot deny that there is a possibility someone will come up with some
super-innovative media for terrestrial facilities-based transmission, but,
I can say that there is very little effort being put into such research
at this time because single-mode fiber is so economical at this point that
nobody really feels there is a need for or significant benefit to such
an improvement.  Were a compelling new media to come along, I'm sure that
someone would deploy it.

Bottom line, we have achieved market competition and fair access to all
other portions of the network.  LMI at layer 1 has proven to be the sticky
wicket that remains a natural monopoly no matter how hard we try to change
that.  As such, I think it is time to accept the fact and deal with it
accordingly, instead of continuing to allow it to preserve destructive
monopolies in other areas.

Owen

-- 
If this message was not signed with gpg key 0FE2AA3D, it's probably
a forgery.
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: application/pgp-signature
Size: 186 bytes
Desc: not available
URL: <http://mailman.nanog.org/pipermail/nanog/attachments/20051116/b76c8845/attachment.sig>