Internet partitioning event regulations (was: RE: Sendingvs requesting. Was: Re: Sprint / Cogent)

Wed Nov 5 23:03:51 UTC 2008

> Are you saying that if any part of a network touches US soil 
> it can be regulated by the US govt over the entirety of the 
> network?  For my part, this is not an attempt to change the 
> subject or divert the argument (red herring).  It is a valid 
> question with operational impact.

That's not how companies work. What you see as a single 
company operating a single worldwide network, is actually
a web of companies with interlocking directorships and
share structures. In each country they will probably have
3 or 4 corporate entities. One owns the network assets, 
one employs all the people in Sales, another employs
the network ops people, and 4th one mops up the other
employees and is a holding company for the other three.
None of them do any billing because that is all done by
subsidiary companies in Luxembourg and Ireland. Etc, etc.

This is done for a variety of reasons but regulation is
definitely one of them. In most countries you need a 
licence to operate telecom networks, and the licence
holder will be the local operating company, not the 
head office company that consolidates the ownership
underneath a share symbol traded on your favorite stock
exchange.

Spend some time hanging out with finance and legal people
in a big company. You may find it almost as fascinating
as designing networks.

An additional point is that when one company acquires another
and it gets reviewed for potential antitrust issues, this
often impacts the company structure because a local regulator
wants to see that the local corporate entity is not 100%
controlled by a foreign corporation. This makes it easier
for the government to target regulations at the domestic
entity.

--Michael Dillon