Re: Some truth about Comcast - WikiLeaks style

["Jeffrey S. Young" <young () jsyoung net>]

On 20/12/2010, at 12:25 AM, JC Dill <jcdill.lists () gmail com> wrote:

> On 19/12/10 8:31 PM, Chris Adams wrote:
> > Once upon a time, JC Dill<jcdill.lists () gmail com>  said:
> > > Why not open up the
> > > market for telco wiring and just see what happens?  There might be 5 or
> > > perhaps even 10 players who try to enter the market, but there won't be
> > > 50 - it simply won't make financial sense for additional players to try
> > > to enter the market after a certain number of players are already in.
> > Look up pictures of New York City in the early days of electricty.
> > There were streets where you couldn't hardly see the sky because of all
> > the wires on the poles.
> Can you provide a link to a photo of this situation?
> > > And there certainly won't be 50 all trying to service the same neighborhood.
> > And there's the other half of the problem.  Without franchise agreements
> > that require (mostly) universal service, you'd get 50 companies trying
> > to serve the richest neighborhoods in town,
>
> No you wouldn't.  Remember those diminishing returns.  At most you would likely have 4 or 5.  If you are player 6 you 
> aren't going to spend the money to build out in an area where there are 5 other players already - you will build out 
> in a different neighborhood where there are only 2 or 3 players.  Then, later, you might buy out the weakest of the 5 
> players in the rich neighborhood to gain access to that neighborhood when player 5 is on the verge of going BK.
>
> It's also silly to think that being player 6 to build out in a "richer neighborhood" would be a good move.  The rich 
> like to get a good deal just like everyone else.  (They didn't *get* rich by spending their money unwisely.)
>
> As an example, I will point people to the neighborhood between Page Mill Road and Stanford University, an area 
> originally built out as housing for Stanford professors.  They have absolutely awful broadband options in that area.  
> They have been *begging* for someone to come in with a better option.  This is a very wealthy community (by US 
> national standards) with median family incomes in the 6 figures according to the 2000 census data.
>
> Right now they can only get slow and expensive DSL or slightly faster and also expensive cable service.
>
> The city of Palo Alto has sonet fiber running right along the edges of this neighborhood. (see, 
> http://poulton.net/ftth/slides.ps.pdf slide 18.)
>
> It's a perfect place for an ISP to put in a junction box and build a local fiber network to connect these homes with 
> fiber to the Palo Alto fiber.  But apparently the regulatory obstacles make it too complicated.  THAT is what I'm 
> talking about above.  Since the incumbents don't want to provide improved services, get rid of those obstacles, let 
> new players move in and put in service without so many obstacles.
>
> jc
Having lived through the telecom bubble (as many of us did) what makes you believe that player 6 is going to know about 
the financial conditions of players 1-5?  What if player two has a high-profile chief scientist who, on a speaking 
circuit, starts telling the market that his bandwidth demands are growing at the rate of 300% per year and players 6-10 
jump into the market with strong financial backing?  While I believe in free-market economics and I will agree with you 
that the situation will eventually sort itself out; thousands of ditch-diggers and poll-climbers will lose their jobs, 
but this is "the way of things."  

I do  not agree that the end-consumer should be put through this fiasco and I am confident that the money spent digging 
more ditches and stringing more ugly overhead cables would be better spent on layers 3 and more importantly on services 
at layers 4-7.  

My perception of the current situation in the USA?  We have just gone through an era in which the FCC and 
administration defined "competition" as having more than one provider able to provide service (200 kb/s or better) 
within a zip code.  A zip code can cover quite a large area.  This left the major players to their own devices and we 
saw them overbuild TV and broadband services into the more lucrative areas (because as established providers they 
actually do have a pretty good idea of the financial condition of their competitors within an area).  Quite often 
'lucrative' did not equal affluent, lucrative is more a measure of consumption (think VoD) than median household 
income.  The point is that the free-market evolution of broadband has produced a patchwork of services that is hard to 
decipher and even harder to influence.   The utopian solution (pun intended) would be to develop a local, state, 
federal system of broadband similar to the highway system of roads.  Let those broadband providers who can compete by 
creating layer 3 backbones and services at layers 4-7 (and layer 1-2 with wireless) survive. Let the innovation 
continue at layers 4-7 without constant saber-rattling from the layer 1-2 providers.

And as a byproduct we can stop the ridiculous debate on Net Neutrality which is molded daily by telecom lobbyists.