Level 3 Communications Issues Statement Concerning Comcast'sActions

Ben Butler ben.butler at c2internet.net
Mon Nov 29 20:29:10 CST 2010


Hi,

Agreed if they are cost recovering in full for end to end delivery of the packet.  But I suspect that market forces haven driven things to a point where there business models depend on peering ratios and SFI.  It is not double billing, it is shared billing.  The simple fact is that consumers do not pay enough and are unwilling to pay enough for their access circuit.  This cost disparity between access, packet delivery and content / advertising / subscription revenues is highlighted in high bandwidth services that break the cost averaging utilization model.

I know the content providers hate this, I know the consumers will not pay more for their access, but the money pie is a certain size and the costs need to be born by all parties for end to end service delivery.  Sorry content providers, you need to suck it up and come up with a more compelling commercial offer, or, if you already have one you need to start spreading the love.

Sorry but this is a shared problem that needs to be collectively and collaboratively addressed rather than the normal ill informed commercial winning that I hear repeatedly about how it all not fair.

-----Original Message-----
From: William Herrin [mailto:bill at herrin.us] 
Sent: 30 November 2010 02:19
To: Patrick W. Gilmore
Cc: NANOG list
Subject: Re: Level 3 Communications Issues Statement Concerning Comcast'sActions

On Mon, Nov 29, 2010 at 5:28 PM, Patrick W. Gilmore <patrick at ianai.net> wrote:
> <http://www.marketwatch.com/story/level-3-communications-issues-statement-concerning-comcasts-actions-2010-11-29?reflink=MW_news_stmp>
>
> I understand that politics is off-topic, but this policy affects operational aspects of the 'Net.

Patrick,

The way I explain it to folks is this:

It's a question of double-dipping. If company A has a customer B who
pays A for a particular service, company C should not be able to pay
company A to meaningfully change the character of B's service. Such a
pay-to-play interference in A's contract with B is unfair to customer
B at a very fundamental level.

Now, you guys have to get paid. There is no acceptable end result
where C comes along, busts your oversubscription model and blows you a
raspberry. But you can't do it by double-billing the service. That's
usually unethical and in many forms of commerce it's illegal too. IMO,
Comcast is cruising for a bruising here.

So try something else.

Maybe you'll openly peer with all comers but only at 100 mbps in any
single location. You'll open as many locations deep in the network as
they want, but it's the peer's problem to connect there. Naturally
you'll sell a convenience service to backhaul all those connection
points to a convenient location for the peers... or they can make
their own arrangements but either way they don't get to massively
consume your backbone for free. There's probably enough separation
there between what you sell customer B and what you sell customer C to
eke over to the "good" side of the ethics line. And by the way an open
peering policy with those parameters would make you the Chamber of
Commerce's new best friend, enabling small business to vend innovative
products directly to your customers (and then pay you for the
convenience of aggregation once they build up a customer base).

Or maybe you'll just enforce the oversubscription ratio. X bandwidth
for the light users. The same X bandwidth for the heavy users. If
you're in the top 2% you're grouped with the heavy users. But oh by
the way you can buy the Video package for $10 more and we'll put you
in group Y instead where you have a clear shot at Netflix that
consumes a different channel. If the remainder of your usage is
outside the top 2% you can go back to the light users group. Netflix
can't pay us for that; it would interfere with our contract with you.
But you can pay us.

I don't know the final answer here, but it isn't some kind of
ethically-challenged double-dipping the till.

Regards,
Bill Herrin


P.S. I'll see your off-topic politics and raise you an ethics lecture.


-- 
William D. Herrin ................ herrin at dirtside.com  bill at herrin.us
3005 Crane Dr. ...................... Web: <http://bill.herrin.us/>
Falls Church, VA 22042-3004


 
 
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Ben Butler
Director Tel: 0333 666 3332 
Fax: 0333 666 3331
C2 Business Networking Ltd
The Paddock, London Road, Nantwich, Cheshire, CW5 7JL
http://www.c2internet.net/
 
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