Did Internet Founders Actually Anticipate Paid,

Mon Sep 20 17:11:57 UTC 2010

On Sep 20, 2010, at 7:04 AM, Joe Greco wrote:

>>> 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.
> 
Exactly... Have we learned nothing from the Enron experience in
California?

>>> ..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.
> 
You lost me here, Joe. Threat to whom? How is it a bad thing that
consumers gain additional choices for sourcing content they want?
What is wrong with Grandma enjoying Netflix from her built-in interface
in her television?
> 
>>> 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?
> 
Actually a lot of money goes into evolving technologies on the last-mile
side. It's a bit of an arms race. For example, the reason your cable
connections have doubled in speed is some pretty massive hardware
upgrades to get from DOCSIS2 to DOCSIS3.

There's also going to be quite a bit of investment to get the DSL
networks ready for IPv6. The last mile remains an expensive place
to play with minimal margins. The costs there have little to do with
wholesale bandwidth pricing where your statements about once
the network is built it costs less to keep it running are much more
accurate.

> 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.
> 
Yes and no. To some extent, I think the smarter ones (I won't name
names on either side in this message) actually see this as an
opportunity to simplify their network and treat IP as a unified delivery
platform for all of those traditionally disparate services. Yes, there's
got to be some fear, but, a smart and sustainable business turns
fear into opportunity.

> 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.
> 
Yep. Especially when we get the end-to-end model back and subscribers
are able to be publishers just as easily as anyone else.

That's a good thing. We should seek to embrace it.

Owen