competition (was: Level 3 blames Internet slowdowns on Technica)

Fri Mar 21 19:21:17 UTC 2014

On Mar 21, 2014, at 2:21 PM, Jared Mauch <jared at puck.nether.net> wrote:

> 
> On Mar 21, 2014, at 2:08 PM, Keegan Holley <no.spam at comcast.net> wrote:
> 
>> How come no one ever asks if competition is required?
> 
> I think the issue here is there is competition, but those you are seen as competing with are in a different strata providing the same service.

My question is competition and the market the goal at all?
> 
> eg: Cellular data competes with DSL/DOCSIS/FTT*
> 
> Now, due to speed, caps, etc.. it may not be a "fair" comparison, but this isn't about fair, it's about "is there competition in the market".  I know many folks that live outside the wired high-speed boundaries and things are not getting any better there.  Most use some hotspot or similar for their home connectivity.
> 
> Is there a market for high speed there?  certainly, but it's being filled by other technology.  

Again why is the market so important?  The inhabitants of this list operate (some help develop) the most complex system created by our species to date.  It is one of the few truly global systems and brought with it a new era in human development.  We now have more information at our fingertips than at any point in history.  What do we argue about?  How to profit from it?  I’m not saying that profit is bad. I’m arrogant but not arrogant enough to think I can answer such a question.  It just fascinates me that no one questions it.

If an area isn’t considered not to be profitable it’s just fine that the internet doesn’t stretch there.  We don’t even have a definition of what profitable means.  It’s completely up to the ISP’s.  Still, businesses in that area are limited, children don’t do as well in school and in turn don’t have as much opportunity.  All of this happens, unquestioned in the name of profits.

> 
> There are many folks that work around these issues with other solutions, including satellite, fixed wireless and/or microwave or even localized fiber build-outs.  Look at the RUS/NTIA/BTOP focus, it was on getting the anchor institutions well connected to provide a sense of community.  The challenge is not everyone is equally equipped.  Merit (in my area) has fiber close to me, but they don't offer services to anyone but existing members and have no consumer offerings.
> 
> Market segmentation happens for a variety of reasons, sometimes economic, sometimes complete differences in ROI models.

Market segmentation doesn’t happen as much as market consolidation.  There are now three (with a 4th that is close) major carriers in the US with enough market share to compete with each other.  There isn’t much segmentation because segmentation isn’t as profitable.

> 
> Nobody can afford to run universal fiber everywhere as a greenfield build, but there are localized markets where it can make sense.  

That’s totally untrue.  What is affordable to a multi-billion dollar ISP anyway?  Are you saying they’d go bankrupt if they ran fiber everywhere?  No, it’s just that the infrastructure isn’t profitable in the short term.  There’s a reason why energy companies can’t make the same decision.

> Certainly it can make sense to connect some islands to each other via some other technology.  Taking list prices from providers webpages, what cogent used to list $4/meg, so that means (assuming everything is perfect) offering 10Mb/s service at a home could possibly cost $40/mo for a provider, not counting capital costs and other elements (support, customer acquisition costs, bad debt, etc).
> 
> I'm sure folks can build networks for low cost, you can get a 1G active-ethernet NID for sub-$150 with optics, but you still need to aggregate and account for it somewhere.

Again why does everything have to move at the speed of profit?  At least here in the US anything that could remotely benefit society is always first shot through the prism of profit and the so-called free market.  Is a market with three major players and a 9-figure entry cost really free though?

> 
> - Jared