Interesting People mailing list archives
BS and FCC v Us and Comcast v ATT
From: David Farber <dave () farber net>
Date: Sat, 16 Feb 2008 18:15:35 -0800
________________________________________ From: Bob Frankston [Bob19-0501 () bobf frankston com] Sent: Saturday, February 16, 2008 2:11 PM To: David Farber; 'ip' Cc: 'Dave Burstein'; 'Andrew C Burnette' Subject: BS and FCC v Us and Comcast v ATT I apologize for making this about me – but then shouldn’t we all be making it about our use and needs rather than the carriers’? After reading the comments below I realize that we’re playing a game of Whack-a-Mole® -- we aren’t dealing with a well-defined question but a menagerie of woes and confusing very interim practices and problems with long term policy issues. I find it telling that BellSouth (AKA BS) is quibbling over price and arguing about when capacity would be available not whether. Are we simply arguing about temporary relief or intrinsic problems? It’s also striking how differently each of the carriers approach the problem. Is Comcast just arguing about a very transient problem? Is ATT really arguing that they can’t afford a neutral network even if the prices continue to drop? Or does ATT just like to snoop – why are they so interested in judging which bits are good and which are bad? Of course I do take this personally – after all home networking did force the issue. Yet at the FCC hearings on the 25th are framed in terms of the network and not in terms of using the network. Why is the goal is to maximize the value to the operators and not to the community. You maximize the network value by minimizing capacity. It’s also strange to talk about costs and prices when we don’t have a real marketplace – just arbitrary measures and synthetic scarcity. We have companies that think of bytes as consumables. They are telecom companies coming to terms with anti-telecom –Internet connectivity. It isn’t hard to project this out to having zero value in the network itself and all the value in the use – what happens to the idea of a carrier? It’s not a funding problem – it’s cheap and once you see the value you just pay for the infrastructure. It’s a problem created by the FCC’s attempt to create a solution to a problem they don’t understand. Ultimately we have a depression-era creation – the FCC – that is stuck in a time when a 25 Watt light bulb was an extravagance. Today they are seeking to limit the amount of light even as newer bulbs actually consume less power. Even worse they seem to take this metaphor literally and view the Internet itself as a consumable! The question for the hearing shouldn’t be how to manage the network – it should be “whose network”? Why do we define neutrality in terms of what network operators should not do – why can’t we have a simple measure such as my ability to get more (local) capacity rather accepting my allotment? But then I can’t be considered an expert because I don’t accept the premises – even if I played a role in causing the problem. http://www.frankston.com/public PS: I find Andrew’s comments on ATT’s problems very interesting. The woes in dealing with IP addresses are real but for me they are reasons to move beyond today’s prototype rather than treating them as sacred texts to be obeyed. But then if you focus on the network in isolation you find yourself missing the point of the Internet which is that the particulars of networking as practices and not requirements. -----Original Message----- From: David Farber [mailto:dave () farber net] Sent: Saturday, February 16, 2008 07:27 To: ip Subject: [IP] bellsouth quote on $1 per sub cost of bandwidth ________________________________________ From: Andrew C Burnette [acb () acb net] Sent: Friday, February 15, 2008 7:16 PM To: Dave Burstein; David Farber Subject: Re: bellsouth quote on $1 per sub cost of bandwidth Dave, and Dave, Yes, his costs are indeed out of proportion by a wide margin. Perhaps he's too far off the beaten path. (there are still populated places in the US where no major carrier serves cell phones too). As for the quote, ask and you'll get it :-) http://telephonyonline.com/iptv/news/BellSouth_VOD_costs_030706/ FTA: BellSouth’s Chief Architect Henry Kafka quoted: Today’s average residential broadband user consumes about 2 gigbytes of data per month, Kafka estimated, which costs the service provider about $1. As downloading feature films becomes more popular, they might consume an average of 9 gigabytes per month, costing carriers $4.50..... I know some folks inside comcast, and the "bet" they placed on the table in 2004 was that DOCSIS 3.0 would be deployed before they hit the wall, the rational being the CxO didn't want to upgrade the cable plant twice. The bet wasn't a winning hand in retrospect. I do have reputable sources who let me in on this back in 2003 and again in 2005. I simply posed the question over a brew, "so, when do I get 100Mbps symmetrical at my house?" and out came a lot of interesting info. The detachment from AT&T has been and is still an ongoing distraction. Far more work than they first estimated. Stitching together 57+/- MSO's into one autonomous system is a non trivial problem. Everything from collisions in RFC1918 space to IP address exhaustion have taken their toll on efforts to build out their own backbone. Many of the cable operators built 'organically grown' networks creating pockets here and there, with no operational connection between them. Even Time Warner still has email subsystems scattered about with the state's two letter code in front of rr.com. Twenty years ago, the cost driver to bundle the MSO's together was the expense and licensing of satellite downlink sites. Now, it's simply time, materials, and willingness to do so. As most of us know all too well, none of the RBOCs had any better individual strategies, particularly with respect to settlement free peering arrangements, that is, until verizon bought the MCI backbone, and little at&t bought up my old playground, the common backbone. Essentially, they've all bought "up" into an established market. Very interesting stuff, in any case. Best regards, and I do enjoy your informative posts (I sub to your DSL Prime list as well:-) ) andy burnette Dave Burstein wrote:
Andrew
I'd love to know where BellSouth said that publicly. I have it off the
record, but not reportable from anyone in North America. On the record,
I have Liberty Global Cable and direct estimates based on equipment
costs. My off the record sources are authoritative.
I've written the problem with cable upstream is that they are still
essentially using a 1998 design. Dave (who wrote a book on that subject)
knows the details better than I. Both the CEO of Comcast and the CTO of
Scientific Atlanta told me in 2006 we'd have full DOCSIS 3.0 in 2007,
which would address the problem quickly. Unfortunately, the chips still
aren't ready and will probably put this off until 2009.
Some thoughts from my economics training, now very rusty. Brett's
problem actually is "cost", not "value" He really does have higher
costs, so he and his competitors would need to charge more. Prices are
related to cost when there are competitive providers. The value of a
service to most user is higher,but more suppliers drive the price closer
to marginal cost + an "ordinary rate of profit." (Difficult issues here
in telecom with very high fixed costs, but that doesn't change this
argument.) The value of my broadband service to me might be $75/month,
but competition forces Verizon to sell it for $35. When a seller
explains a price is based on "value", that suggests there is demand but
insufficient supply. Otherwise prices would come down. This is
interesting because you can draw an inference competition is weak when
prices move in a way different than cost. For example, DSL costs overall
have been coming down, even including a generous allowance for bandwidth
costs. (Modems are cheaper, support drops significantly when most of
your users have been on the service over a year, scale matters, etc.)
Therefore, when AT&T raised most DSL prices about 20% a few weeks ago, I
took that as confirmation competition isn't working well.
It is possible to run a large broadband network without traffic shaping
like Comcast, because Verizon, AT&T, and Free.fr do it. A key Comcast
claim in the FCC filing is that this is impossible. Source: Verizon SVP
Tom Tauke, AT&T SVP Jim Cicconi, AT&T CEO testifying at the Senate,
numerous technical sources.
Internet growth rates per subscriber are little changed for the last
five years at 35-45%, not increasing or a crisis brought on by video.
Source: Odlyzko's excellent MINTS page and Comcast's filing with the
40% number for 2007
Over that same period, the costs of delivering that bandwidth have
gone down at a Moore's Law pace of 25-40% (switches, routers, etc.)
The result is that the carrier's cost of bandwidth has been flat to
down for five years. The total bandwidth cost is typically
$1/month/customer. Multiple sources
It's probably impossible to build a network that never degrades even
in emergencies like 9/11 or Katrina. It is possible to affordably
build a network that virtually never seriously degrades even
demanding applications like highquality web video. Evidence: Free.fr,
Verizon FIOS, AT&T U-Verse, and my home DSL line do that today, by
company claim and all reports I've found.
My conclusion, which allows one to be in favor or opposed to NN, is
that neutral networks aren't free, but are practical at a definable
price.
I respect the opinion of Dave and others that getting the
government involved could create even more problems. My opinion is
grounded on my research that almost any likely scenario puts the
maximum cost of upgrading to a neutral network less than $1/month,
and it's easy to project costs of a few dimes on a $30-50 month
service. I believe that's a good tradeoff for the customer and system.
Dave Burstein
Editor, DSL Prime
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