Observations of an Internet Middleman (Level3) (was: RIP Network Neutrality

Owen DeLong owen at delong.com
Thu May 15 14:26:43 UTC 2014


I don’t disagree.  However, given the choice between Comcast and broadband services in NL, Chatanooga, or Seoul, just to name a few, Comcast loses badly.

Choosing between Comcast and a legacy Telco is like choosing between legionnaire’s disease and SARS.

Owen

On May 14, 2014, at 5:15 PM, Jared Mauch <jared at puck.nether.net> wrote:

> Owen,
> 
> I've seen a vast difference between Comcast and others in the "marketplace".  Right now, if I had the choice between Comcast and a "legacy" telco, I would pick Comcast hands-down for:
> 
> a) performance
> b) IPv6 support
> c) willingness to work on issues
> 
> - Jared
> 
> On May 14, 2014, at 5:14 PM, McElearney, Kevin <Kevin_McElearney at cable.comcast.com> wrote:
> 
>> Respectfully, this is a highly inaccurate "sound bite"
>> 
>>    - Kevin
>> 
>> 215-313-1083
>> 
>>> On May 14, 2014, at 3:05 PM, "Owen DeLong" <owen at delong.com> wrote:
>>> 
>>> Yes, the more accurate statement would be aggressively seeking new
>>> ways to monetize the existing infrastructure without investing in upgrades
>>> or additional buildout any more than absolutely necessary.
>>> 
>>> Owen
>>> 
>>> On May 14, 2014, at 8:02 AM, Hugo Slabbert <hugo at slabnet.com> wrote:
>>> 
>>>>> 
>>>>> So they seek new sources of revenues, and/or attempt to thwart
>>>>>> competition any way they can.
>>>> No to the first. Yes to the second. If they were seeking new sources of
>>>>> revenue, they'd be massively expanding into un/der served markets and
>>>>> aggressively growing over the top services (which are fat margin).
>>>> 
>>>> Sure they are (seeking new sources of revenue).  They're not necessarily
>>>> creating new products or services, i.e. actually adding any value, but they
>>>> are finding ways to extract additional revenue from the same pipes, e.g.
>>>> through paid peering with content providers.
>>>> 
>>>> I'm not endorsing this; just pointing out that you two are actually in
>>>> agreement here.
>>>> 
>>>> --
>>>> Hugo
>>>> 
>>>> 
>>>>> On Wed, May 14, 2014 at 7:23 AM, <charles at thefnf.org> wrote:
>>>>> 
>>>>>> On 2014-05-14 02:04, Jean-Francois Mezei wrote:
>>>>>> 
>>>>>> On 14-05-13 22:50, Daniel Staal wrote:
>>>>>> 
>>>>>> They have the money.  They have the ability to get more money.  *They see
>>>>>>> no reason to spend money making customers happy.*  They can make more
>>>>>>> profit without it.
>>>>>> 
>>>>>> There is the issue of control over the market. But also the pressure
>>>>>> from shareholders for continued growth.
>>>>> 
>>>>> 
>>>>> Yes. That is true. Except that it's not.
>>>>> 
>>>>> How do service providers grow? Let's explore that:
>>>>> 
>>>>> What is growth for a transit provider?
>>>>> 
>>>>> More (new) access network(s) (connections).
>>>>> More bandwidth across backbone pipes.
>>>>> 
>>>>> 
>>>>> What is growth for access network?
>>>>> More subscribers.
>>>>> 
>>>>> Except that the incumbent carriers have shown they have no interest in
>>>>> providing decent bandwidth to anywhere but the most profitable rate
>>>>> centers. I'd say about 2/3 of the USA is served with quite terrible access.
>>>>> 
>>>>> 
>>>>> 
>>>>> 
>>>>>> The problem with the internet is that while it had promises of wild
>>>>>> growth in the 90s and 00s, once penetration reaches a certain level,
>>>>>> growth stabilizes.
>>>>> 
>>>>> Penetration is ABYSMAL sir. Huge swaths of underserved americans exist.
>>>>> 
>>>>> 
>>>>> 
>>>>>> When you combine this with threath to large incumbents's media and media
>>>>>> distribution endeavours by the likes of Netflix (and cat videos on
>>>>>> Youtube), large incumbents start thinking about how they will be able to
>>>>>> continue to grow revenus/profits when customers will shift spending to
>>>>>> vspecialty channels/cableTV to Netflix and customer growth will not
>>>>>> compensate.
>>>>> 
>>>>> Except they aren't. Even in the most profitable rate centers, they've
>>>>> declined to really invest in the networks. They aren't a real business. You
>>>>> have to remember that. They have regulatory capture, natural/defacto
>>>>> monopoly etc etc. They don't operate in the real world of
>>>>> risk/reward/profit/loss/uncertainty like any other real business has to.
>>>>> 
>>>>> 
>>>>> 
>>>>>> So they seek new sources of revenues, and/or attempt to thwart
>>>>>> competition any way they can.
>>>>> 
>>>>> No to the first. Yes to the second. If they were seeking new sources of
>>>>> revenue, they'd be massively expanding into un/der served markets and
>>>>> aggressively growing over the top services (which are fat margin). They did
>>>>> a bit of an advertising campaign of "smart home" offerings, but that seems
>>>>> to have never grown beyond a pilot.
>>>>> 
>>>>> 
>>>>> 
>>>>>> The current trend is to "if you can't fight them, jon them" where
>>>>>> cablecos start to include the Netflix app into their proprietary set-top
>>>>>> boxes. The idea is that you at least make the customer continue to use
>>>>>> your box and your remote control which makes it easier for them to
>>>>>> switch between netflix and legacy TV.
>>>>> True. I don't know why one of the cablecos hasn't licensed roku, added
>>>>> cable card and made that available as a "hip/cool" set top box offering and
>>>>> charge another 10.00 a month on top of the standard dvr rental.
>>>>> 
>>>>> 
>>>>> 
>>>>> Would be interesting to see if those cable companies that are agreeing
>>>>>> to add the Netflix app onto their proprietary STBs also  play peering
>>>>>> capacity games to degrade the service or not.
>>>>> 
>>>>> So how is the content delivered? Is it over the internet? Or is it over
>>>>> the cable plant, from cable headends?
>>> 



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