Interesting People mailing list archives
Re: OPEC 2.0 -- Barrels vs Bandwidth
From: David Farber <dave () farber net>
Date: Wed, 30 Jul 2008 13:08:34 -0700
________________________________________ From: Patrick W. Gilmore [patrick () ianai net] Sent: Wednesday, July 30, 2008 2:01 PM To: Bob Frankston Cc: Patrick W. Gilmore; David Farber Subject: Re: [IP] Re: OPEC 2.0 -- Barrels vs Bandwidth On Jul 30, 2008, at 1:45 PM, Bob Frankston wrote:
Of course there is maintenance. While I can argue that those costs are minimal and far lower than roads the more important point, however, is that bandwidth is the wrong measure.
Again, I agree with part of your statement, but not the other part. The costs are _not_ minimal. The actual %-age ranges depending on the network and how it is run, but for some networks, CapEx is < 50% of their budget. That said, I (probably) agree that raw bits are not the way things should be billed in a perfect world. Until then, though, charging for bits is a convenient proxy, much like toll-booths are sub-optimal, but the best we have right now. (Then again, have you see the toll roads in Los Angeles? They bill different amounts based on the congestion seen on the non-toll roads.)
Like roads we should pay for it as infrastructure – we don’t expect road operators to run the roads through each town as profit centers. That’s one reason why the interstates were so valuable – they reduced the cost of passing through each burb. They might have tolls and speed traps to make a profit but more often the cost was implicit in Main St being congested.
See my last parenthetical. :-) But this is where the analogy breaks down. Perhaps if we separated physical plant from IP transit, we could make a better comparison. Unfortunately, in the US, that is not possible due to the telcos & cable-cos have such a horrifically bad stranglehold on just about every governing body (PUCs, FCC, congress, etc.). :( Anyway, I guess we are mostly in agreement. We both agree the current system is probably broken. (Although I am not certain a pure cost- recovery for physical plant is the way to go.) I'm just trying to point out that running a network (including IP, not just fiber) is far more costly than spending CapEx or digging trenches. -- TTFN, patrick
-----Original Message----- From: Patrick W. Gilmore [mailto:patrick () ianai net] Sent: Wednesday, July 30, 2008 13:13 To: Dave Farber; Bob Frankston Cc: Patrick W. Gilmore Subject: Re: [IP] Re: OPEC 2.0 -- Barrels vs BandwidthFrom: Bob Frankston [bob37-2 () bobf frankston com] Sent: Wednesday, July 30, 2008 12:27 PM To: David Farber; 'ip' Cc: Tim Wu Subject: RE: [IP] OPEC 2.0 -- Barrels vs Bandwidth I agree that we have abundant capacity available but we need to be careful on terminology. A barrel of oil is something we consume and it is distributed form sources. Tim’s essential point is correct though the argument is even stronger if we challenge the concept of "bandwidth". Why are we paying so much for something that isn’t consumed? The basic problem is the billing model – once we treat the infrastructure as a profit center and charge for services we create costs. While the efforts in Amsterdam and Utah are laudable they need to go another step to escape the idea of charging for services and usage. The particular price of bandwidth isn’t as important as the very idea of pricing by bandwidth rather than paying once for the physical infrastructure. It’s even starker when we observe that technology increases the capacity of what we already -- a learning experience for those who bet on scarcity of “bandwidth” for first fiber bubble.There is more to running a network than laying fiber and buying routers, and those additional costs are not trivial.Bandwidth is simply a measure and it isn't meaningful in isolation. You can't really talk about the bandwidth of an inch of wire in isolation. Bandwidth is only a meaningful measure when we deploy a particular technology. But it becomes a billable unit only when we take the next step and a service provider puts a meter on the wire. Nothing is being consumed but billable events are being created.We agree on the first part. Bandwidth should not be considered in isolation. But an argument could be made against the last sentence. Using a road analogy, once a road has been built, does that mean it costs nothing from then on? Rolling over it 'consumes' nothing, but does that mean it does not incur a cost? -- TTFN, patrickEven if we argue there are constrictions at various points in the infrastructure it doesn’t make to use those constrictions as a reason to create false scarcity in every segment of wire. Fortunately I managed to exempt the wires within the home form this form of billing by making sure that home networking was DIY and not a service. This applies to airwaves also. As Tim observes spectrum allocation is an artificial construct based on the technology available in the 1920’s and the lack of a corresponding wired infrastructure to relay the traffic. So we adopted the idea of single hop signaling over long distances and wired for local connections. Nicholas Negroponte observed that with the Internet and digital connectivity this has been turned on its head. Wireless is increasingly used for local connectivity in place of phone wires and network wires. Fiber and other digital paths work far better for distance – a milliwatt radio now reaches the world. If we convert existing access points to transfer points the issue of whitespace may be moot. -----Original Message----- From: David Farber [mailto:dave () farber net] Sent: Wednesday, July 30, 2008 11:21 To: ip Subject: [IP] OPEC 2.0 ________________________________________ From: Ted Dolotta [Ted () Dolotta ORG] Sent: Wednesday, July 30, 2008 10:57 AM To: David Farber Subject: OPEC 2.0 Dave, Interesting analogy. For IP? Ted Dolotta ============================================================= By TIM WU Published: July 30, 2008 AMERICANS today spend almost as much on bandwidth - the capacity to move information - as we do on energy. A family of four likely spends several hundred dollars a month on cellphones, cable television and Internet connections, which is about what we spend on gas and heating oil. Just as the industrial revolution depended on oil and other energy sources, the information revolution is fueled by bandwidth. If we aren't careful, we're going to repeat the history of the oil industry by creating a bandwidth cartel. Like energy, bandwidth is an essential economic input. You can't run an engine without gas, or a cellphone without bandwidth. Both are also resources controlled by a tight group of producers, whether oil companies and Middle Eastern nations or communications companies like AT&T, Comcast and Vodafone. That's why, as with energy, we need to develop alternative sources of bandwidth. Wired connections to the home - cable and telephone lines - are the major way that Americans move information. In the United States and in most of the world, a monopoly or duopoly controls the pipes that supply homes with information. These companies, primarily phone and cable companies, have a natural interest in controlling supply to maintain price levels and extract maximum profit from their investments - similar to how OPEC sets production quotas to guarantee high prices. But just as with oil, there are alternatives. Amsterdam and some cities in Utah have deployed their own fiber to carry bandwidth as a public utility. A future possibility is to buy your own fiber, the way you might buy a solar panel for your home. Encouraging competition is another path, though not an easy one: most of the much-hyped competitors from earlier this decade, like businesses that would provide broadband Internet over power lines, are dead or moribund. But alternatives are important. Relying on monopoly producers for the transmission of information is a dangerous path. After physical wires, the other major way to move information is through the airwaves, a natural resource with enormous potential. But that potential is untapped because of a false scarcity created by bad government policy. Our current approach is a command and control system dating from the 1920s. The federal government dictates exactly what licensees of the airwaves may do with their part of the spectrum. These Soviet-style rules create waste that is worthy of Brezhnev. Many "owners" of spectrum either hardly use the stuff or use it in highly inefficient ways. At any given moment, more than 90 percent of the nation's airwaves are empty. The solution is to relax the overregulation of the airwaves and allow use of the wasted spaces. Anyone, so long as he or she complies with a few basic rules to avoid interference, could try to build a better Wi-Fi and become a broadband billionaire. These wireless entrepreneurs could one day liberate us from wires, cables and rising prices. Such technologies would not work perfectly right away, but over time clever entrepreneurs would find a way, if we gave them the chance. The Federal Communications Commission promised this kind of reform nearly a decade ago, but it continues to drag its heels. In an information economy, the supply and price of bandwidth matters, in the way that oil prices matter: not just for gas stations, but for the whole economy. And that's why there is a pressing need to explore all alternative supplies of bandwidth before it is too late. Americans are as addicted to bandwidth as they are to oil. The first step is facing the problem. Tim Wu is a professor at Columbia Law School and the co-author of "Who Controls the Internet?" Copyright 2008 The New York Times Company ------------------------------------------- Archives: https://www.listbox.com/member/archive/247/=now RSS Feed: https://www.listbox.com/member/archive/rss/247/ Powered by Listbox: http://www.listbox.com ------------------------------------------- Archives: https://www.listbox.com/member/archive/247/=now RSS Feed: https://www.listbox.com/member/archive/rss/247/ Powered by Listbox: http://www.listbox.com
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