Hi Jim. I received a number of interesting and historically enlightening replies in the Cybertelecom.com area on this subject (ref: #msg-24514042 ) helping to reframe my outlook on this subject, although not entirely for the number of wildcard (subjective, mainly) issues that I'm fairly certain will always persist. See:
--
Sean D. replied:
On Sat, 19 Apr 2008, Frank Coluccio wrote:
> I've been reading increasingly about the ways in which incumbents plan to offload
>a major portion of their wireless backhaul burdens onto their existing customers'
>(already-paid for) "broadband" wireline services (CM, DSL, FTTx, etc.) [hence,
the question of double dipping]
Is this any more or less of an issue than companies trying to shift
the cost of their distribution bandwidth to end-users? For example, P2P
distributors using bandwidth and compute cycles paid for by end-users to
distribute things to the rest of the world?
If other people are willing to pay the cost of distributiong stuff to
the rest of the world, why wouldn't someone take advantage of that?
The National Association of Broadcastors was successfull at convincing
the government to require cable and satellite companies and their
customers to cover the cost of carrying NAB members' signals for free,
even in areas where NAB members haven't spent the money to provide decent
or competitive over the air service.
What other influential groups should be able to demand "free" or heavily
discounted cable, Internet, telephone, mail etc service, paid for by
someone else? All communication systems seem to have some variation of
the issue. The Congressional Franking privilege and the US Mail.
--
To which Fred G. noted:
At 4/19/2008 03:07 PM, Sean Donelan wrote:
>On Sat, 19 Apr 2008, Frank Coluccio wrote:
>>I've been reading increasingly about the ways in which incumbents
>>plan to offload
>>a major portion of their wireless backhaul burdens onto their
>>existing customers'
>>(already-paid for) "broadband" wireline services (CM, DSL, FTTx, etc.)
>
>Is this any more or less of an issue than companies trying to shift
>the cost of their distribution bandwidth to end-users? For example,
>P2P distributors using bandwidth and compute cycles paid for by
>end-users to distribute things to the rest of the world?
>
>If other people are willing to pay the cost of distributiong stuff
>to the rest of the world, why wouldn't someone take advantage of that?
That's a good observation. It points out the fallacy of the Internet
business model (and as I've pointed out elsewhere, "Internet" denotes
a business model, not a protocol stack). The model, as understood by
Americans, has a usage price of precisely zero. This has all sorts
of implications. Spam is profitable because getting one sucker out
of a million spams more than covers a million times zero. Femtocells
are profitable for CMRS operators because the backhaul is priced the
same way as other parasitic VoIP, at zero. And yes, the Vuzes of the
world can create a CDN out of Other People's Computers for roughly
zero, because the people who contribute their nodes pay precisely
zero for their usage.
I heard about a cable company that this week imposed a 50 GB/month
cap on their retail plan, with overage at $1.50/GB. Totally neutral,
of course. Good for them.
>The National Association of Broadcastors was successfull at convincing ...
Must-carry is an interesting rule. Theoretically it is limited to
the Protected Contour, where there should be usable OTA service. But
in practice it includes Grade B contours of areas where people only
watch A contours. The FCC recently required Cablevision on Long
Island to carry a station licensed to the upstate town of Kingston,
about 100 miles north of NYC. This made no sense, except that the
Kingston station moved its transmitter as far south as it could get
away with, still reaching Kingston to the north but also hitting NYC
and parts of LI. Thus it became Must Carry in the #1 market.
The flip side is that a station asking for Must Carry gives up the
right to ask for copyright royalties for carriage. So the most
desirable stations demand royalties while the outliers, shoppers and
preachers invoke Must Carry.
--
Me to Sean:
You've highlighted a number of variables, both spoken and implied that
probably hold a lot of weight in the affected sectors that you mentioned. At the
same time, however, while you've made mention of the P2P issue, you've also
shifted the contention zone away from the paying subscriber and placed it,
instead, between ISPs and content providers and between the government and
various types of service providers. Neither of the latter two, IMO, directly
addresses the concern that I raised.
As for P2P? The sign above the door leading to your P2P example, where users
potentially suffer performance degradation because they are willingly engaged in
file sharing, might read:
"There are no victims, only volunteers."
I guess if one were o.k. with the idea that tit-for-tat is a viable approach for
establishing the rules of telecoms commerce and trade, then your argument might
have a chance of standing up. But I'd hardly consider such a blatant form of
'retaliation in kind' a valid approach to standards setting, unless negotiated
and treated as quid pro quos that were spelled out and agreed upon by the parties
concerned.
--
Sean to me:
On Sat, 19 Apr 2008, Frank Coluccio wrote:
> Hi Sean. You've highlighted a number of variables, both spoken and implied that ...
FON Wireless asks people purchase FON hardware and donate their
broadband connections. FON also made agreements with BT and Neuf
to pre-install FON software on subscriber routers.
T-Mobile asks people to purchase (sometimes bundled with T-Mobile service
so there may not be an explicit fee) hardware and donate their broadband
connections.
There are also many WiFI hotspots and DISA PBX access ports which do not
require any authentication before allowing anyone to use them.
As you said, there are no victims only volunteers.
And to pick up on Fred's point. Is the Internet a protocol or a business
model. If the protocol stays the same, but the business model changes
then what? Once upon a time, AT&T donated UUCP hub services to the
world for free. Then AT&T stopped donating UUCP hub services. NSF used
to pay for the core backbone of the Internet, and then the NSF stopped
paying for it.
As long as donors exist, why wouldn't people and companies take advantage
of the donated services?
--
Me to Sean:
The sustainability of the examples you cited will depend, IMO, on the wireline
guys keeping pace with capacity dictates - a proposition that I see as being very
likely a lumpy one across disparate service providers' territories, at best.
Ergo, the clause: "Subject to change without notice" (due to either or both
capacity and policy constraints). Your arguments combined with Fred's
observations have helped improve the framing of this subject considerably. Thanks.
--
Fred to Sean:
At 4/19/2008 05:15 PM, Sean Donelan wrote:
...
>And to pick up on Fred's point. Is the Internet a protocol or a business ...
They do. Things get fun when donors stop donating and the donees
protest their loss of what they thought was an entitlement.
Hence the brouhaha about Comcast's blocking peer servers when they
are run in unattended server-only mode. Their ToS always, AFAIK (and
I've used it since the MediaOne days), banned "servers" on the CPE
side, but somebody just noted that they started to enforce it on
boundary cases. I do note that RCN's ToS explicitly allows customers
(at least business ones; I have a business account with them) to run
FTP servers and mail servers but not web servers.
And Scott Marcus remembers the problem when a certain
hosting-oriented ISP lost its peering with BBN Planet. And before
that a lot of small ISPs cried loudly when they lost their free
peering with UUNET. The wholesale side of the Internet business
model depends on there being no dominant player. If you can get away
with charging upstream fees, do it. If you see more value in
peering, do it. It's a wonderful system. Contrast to the telco
world, where everything is Classified, and there's huge Market Power
with the incumbents, and the whole trick is to engage in regulatory
arbitrage to pay the lowest rate while collecting a higher rate. All
orchestrated by the regulatorium's rules about "you must connect;
argue about the bill later" and "that's not tariffed, don't argue
about it here". A farce, to be sure. I just don't agree that the
answer is total deregulation of telecom, since it doesn't do away
with the market power. That's why the neutrality freak show is such
a farce; it misses the point.
--
Scott to Fred:
At 03:58 AM 4/20/2008, Fred Goldstein wrote:
>... And Scott Marcus remembers the problem when a certain
>hosting-oriented ISP lost its peering with BBN Planet. And before
>that a lot of small ISPs cried loudly when they lost their free
>peering with UUNET. The wholesale side of the Internet business
>model depends on there being no dominant player. If you can get away
>with charging upstream fees, do it. If you see more value in
>peering, do it. It's a wonderful system. ...
Fred, with all due respect I think that the way that you stated this
could misled some readers. I know that you are familiar with the
nuances that follow.
For reasons I forget, I was not involved in that particular peering
dispute. But it was about traffic BALANCE, not about the volume of
traffic, nor about the simple ability to extract profits/rents.
During the period I was running peering policy for BBN Planet / GTE
Internetworking / Genuity, we published our peering policy, and
intentionally ran it on a nondiscriminatory basis. We peered with
many ISPs that were smaller than we were (as did UUNET, by the way),
and from whom we conceivably could have extracted some payments.
The peering policy was attempting to ensure, among other things, that
the peering partner (1) was big enough in traffic exchange with us
that the transactions costs of setting up peering in the first place
were warranted, and (2) that our respective unit costs for the
peering should, ceteris paribus, be in the same general range as theirs.
The traffic balance requirement was there as part of (2). In a world
of shortest exit peering, a network that sends much more traffic than
it receives will tend to have much lower unit costs to carry the
traffic. ISPs care about the cost asymmetries because they represent
a competitive advantage or disadvantage in competing for the same end
customers.
The majority of peering disputes (when I was in the business, at
least) have been over traffic balance and related cost asymmetries,
not over traffic volumes.
>... Contrast to the telco world, where everything is Classified, and
>there's huge Market Power with the incumbents, and the whole trick
>is to engage in regulatory arbitrage to pay the lowest rate while
>collecting a higher rate. All orchestrated by the regulatorium's
>rules about "you must connect; argue about the bill later" and
>"that's not tariffed, don't argue about it here". A farce, to be
>sure. I just don't agree that the answer is total deregulation of
>telecom, since it doesn't do away with the market power. That's why
>the neutrality freak show is such a farce; it misses the point.
Agreed. We have looked this issue a number of times, including in our
recent study of IP interconnection for the European Commission. The
migration to IP changes the character of market power somewhat, but
we do not see market power going away any time soon.
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