Did Internet Founders Actually Anticipate Paid,

Joe Greco jgreco at ns.sol.net
Mon Sep 20 14:04:26 UTC 2010

> > Of course the high level of oversub is an issue....
> We'll disagree then.  Oversub makes access affordable.

We don't disagree.  Of course oversub makes access affordable.  The point
here is that carriers aren't willing to commit to supporting some level
of service.  Many people have recognized that a lack of net neutrality is
an incentive for service providers to either tacitly allow congestion
points to evolve in their networks, or, worse, deliberately engineer such
a situation, with dollar signs flashing in Ed Whitacre's eyes at the idea
of being able to bill a third party.  That's pretty much the opposite end
of the spectrum from committing to supporting some level of service.

> >..with the scary boogeyman of evil illegal P2P filesharing
> That just tips the money in the wrong direction.  And it's a real threat 
> (amongst others)...not just that deadly clown hiding under your bed.

A real threat?  Oh, please, get real.  A _real_ threat is what happens as
cable and satellite providers keep jacking their rates, and more and more
of the "next generation" of television viewers stop subscribing to
conventional television distribution because they're able to get content
over the Internet.  That's a real threat.  When your HD television comes
with Netflix Live On Demand built in, even grandma will be clicking on
movies, I'll bet.

> > Consider: the practical reality is that we're seeing more and more
> > gizmos that do more and more network things.  We're going to see
> > DVR's downloading content over the Internet, you'll see your nav
> > system downloading map updates over the Internet, these are all
> > "new" devices that didn't exist ~10 years ago in their current form,
> > and they're changing consumer usage patterns.
> Yeah, I think we all know and see that stuff.  But, unless some 
> technological model changes bit pricing, the premise of oversub still wins. 
> Going 1:1 today (or in the near future) makes no sense unless you layer 
> something on top (advertising, qos, buttercream icing?).

Why is it that you are talking about 1:1?

> >There is no reason to
> > expect that the "business model" will remain useful or that any
> > component of it, such as massive oversubscription, must necessarily
> > be correct and remain viable in its current form, just because it
> > worked a decade ago.
> Well, I'm talking 10 years ago up until present.  How do you see the sub 
> model turning?  1:1?  If so, how?  And, still some profit?

If you want something interesting to ponder:

In the last ~10 years, wholesale bandwidth costs have fallen, what, from
maybe $100/mbit to $1/mbit?  I don't even know or care just how accurate
that is, but roughly speaking it's true.

In the last ~10 years, DSL and cable prices have stayed pretty much
consistent.  Our local cable connections have maybe doubled in speed in
that time.  DSL speeds haven't changed, except for Uverse, which is a
bit of an exception for a number of reasons.

Now obviously building the network costs something, but fifteen years
after they started providing service, I'm guessing that's been paid for.
They don't seem to be dumping lots of funds into increasing their network
speeds.  That suggests profit.  Do you have an alternative explanation?

I'm looking at the current scenario, and what I see are monopolies who
are afraid of the future.  at&t is already witnessing the destruction of
its legacy telephony business, the demise of ridiculous long distance 
rates, etc.  The Comcasts of the world have got to recognize that the
ability for customers to avoid paying a monthly cable fee by getting
video over the net is bad for business.  So you have cable and telco,
both telecom businesses with Something To Lose, both of whom incidentally
are also the gatekeepers of residential Internet service.

The killer point, though, is when you look at what's happening in other
areas of the world.  You can see broadband Internet services elsewhere
evolving.  You can even see rogues here in the US (I'm looking at you,
Sonic!) who are pushing the envelope.

The reality is that the world is changing, and subscribers are going to
be pushing more and more data, often without even recognizing that fact.

... JG
Joe Greco - sol.net Network Services - Milwaukee, WI - http://www.sol.net
"We call it the 'one bite at the apple' rule. Give me one chance [and] then I
won't contact you again." - Direct Marketing Ass'n position on e-mail spam(CNN)
With 24 million small businesses in the US alone, that's way too many apples.

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