Observations of an Internet Middleman (Level3)

McElearney, Kevin Kevin_McElearney at cable.comcast.com
Thu May 15 15:50:56 UTC 2014


There is no gaming on measurements and disputes are isolated and temporary with issues not unique over the history of the internet.  I think all the same rhetorical quotes continue to be reused

      - Kevin

> On May 15, 2014, at 11:43 AM, "Scott Berkman" <scott at sberkman.net> wrote:
> 
> Unfortunately these build-outs are primarily in subscriber facing bandwidth and number of headend locations (to add more customers to the network).  These peering point/transit connection issues have been going on for a long time, evidenced by Level 3 coming out with this post.  Comcast is also suspiciously absent from public exchanges (TelX's TIE would be one example) while many of their competitors participate for the benefit of the Internet as a whole and their customers.
> 
> Measured broadband is also a game, because its very easy for large providers to give priority to (or otherwise "help") known speed test and similar sites, giving customers a false impression of their available capacity or performance.  We've all seen cases where customers have some amazing result on their favorite test site, and then real world performance can't even come close.
> 
> That said, if Comcast does or is making efforts to finally resolve this, more power to them and congratulations to their customers. Unfortunately trying to brute-force the industry and external content providers tells a very different story.  Where is Comcast's official blog post showing evidence as to where they do ensure their peering and or transit to the largest Tier 1 providers are not congested?  Instead all we see are policy arguments about who should pay for what, while users continue to suffer.
> 
> This is really similar to when TV providers have spats with content owners, and the result is the end users missing out on something they are paying for.   It is good for related industries and the large players in each to keep working with each other in open ways to keep pricing reasonable (as opposed to working together in hiding to price fix), but it is not OK to do so by throwing tantrums and making everyone involved suffer.
> 
>  -Scott
> 
> 
>> On 05/15/2014 10:57 AM, McElearney, Kevin wrote:
>> Upgrades/buildout are happening every day.  They are continuous to keep ahead of demand and publicly measured by SamKnows (FCC measuring broadband), Akamai, Ookla, etc
>> 
>> What is not well known is that Comcast has been an existing commercial transit business for 15+ years (with over 8000 commercial fiber customers).  Comcast also has over 40 balanced peers with plenty of capacity, and some of the largest Internet companies as customers.
>> 
>>       - Kevin
>> 
>> 215-313-1083
>> 
>>> On May 15, 2014, at 10:19 AM, "Owen DeLong" <owen at delong.com> wrote:
>>> 
>>> Oh, please do explicate on how this is inaccurate…
>>> 
>>> Owen
>>> 
>>>> On May 14, 2014, at 2:14 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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