[171825] in North American Network Operators' Group
Re: Observations of an Internet Middleman (Level3) (was: RIP
daemon@ATHENA.MIT.EDU (McElearney, Kevin)
Thu May 15 10:58:19 2014
X-Original-To: nanog@nanog.org
From: "McElearney, Kevin" <Kevin_McElearney@cable.comcast.com>
To: Owen DeLong <owen@delong.com>
Date: Thu, 15 May 2014 14:57:22 +0000
In-Reply-To: <3E49C7D2-5738-4BBC-BF01-7124DA1123B1@delong.com>
Cc: "nanog@nanog.org" <nanog@nanog.org>
Errors-To: nanog-bounces@nanog.org
Upgrades/buildout are happening every day. They are continuous to keep ahe=
ad of demand and publicly measured by SamKnows (FCC measuring broadband), A=
kamai, Ookla, etc
What is not well known is that Comcast has been an existing commercial tran=
sit business for 15+ years (with over 8000 commercial fiber customers). Co=
mcast 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@delong.com> wrote:
>=20
> Oh, please do explicate on how this is inaccurate=85
>=20
> Owen
>=20
>> On May 14, 2014, at 2:14 PM, McElearney, Kevin <Kevin_McElearney@cable.c=
omcast.com> wrote:
>>=20
>> Respectfully, this is a highly inaccurate "sound bite"
>>=20
>> - Kevin
>>=20
>> 215-313-1083
>>=20
>>> On May 14, 2014, at 3:05 PM, "Owen DeLong" <owen@delong.com> wrote:
>>>=20
>>> Yes, the more accurate statement would be aggressively seeking new
>>> ways to monetize the existing infrastructure without investing in upgra=
des
>>> or additional buildout any more than absolutely necessary.
>>>=20
>>> Owen
>>>=20
>>> On May 14, 2014, at 8:02 AM, Hugo Slabbert <hugo@slabnet.com> wrote:
>>>=20
>>>>>=20
>>>>> 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 o=
f
>>>>> revenue, they'd be massively expanding into un/der served markets and
>>>>> aggressively growing over the top services (which are fat margin).
>>>>=20
>>>> Sure they are (seeking new sources of revenue). They're not necessari=
ly
>>>> 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.
>>>>=20
>>>> I'm not endorsing this; just pointing out that you two are actually in
>>>> agreement here.
>>>>=20
>>>> --
>>>> Hugo
>>>>=20
>>>>=20
>>>>>> On Wed, May 14, 2014 at 7:23 AM, <charles@thefnf.org> wrote:
>>>>>>=20
>>>>>> On 2014-05-14 02:04, Jean-Francois Mezei wrote:
>>>>>>=20
>>>>>> On 14-05-13 22:50, Daniel Staal wrote:
>>>>>>=20
>>>>>> They have the money. They have the ability to get more money. *The=
y see
>>>>>>> no reason to spend money making customers happy.* They can make mo=
re
>>>>>>> profit without it.
>>>>>>=20
>>>>>> There is the issue of control over the market. But also the pressure
>>>>>> from shareholders for continued growth.
>>>>>=20
>>>>>=20
>>>>> Yes. That is true. Except that it's not.
>>>>>=20
>>>>> How do service providers grow? Let's explore that:
>>>>>=20
>>>>> What is growth for a transit provider?
>>>>>=20
>>>>> More (new) access network(s) (connections).
>>>>> More bandwidth across backbone pipes.
>>>>>=20
>>>>>=20
>>>>> What is growth for access network?
>>>>> More subscribers.
>>>>>=20
>>>>> Except that the incumbent carriers have shown they have no interest i=
n
>>>>> 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 a=
ccess.
>>>>>=20
>>>>>=20
>>>>>=20
>>>>>=20
>>>>>> 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.
>>>>>=20
>>>>> Penetration is ABYSMAL sir. Huge swaths of underserved americans exis=
t.
>>>>>=20
>>>>>=20
>>>>>=20
>>>>>> When you combine this with threath to large incumbents's media and m=
edia
>>>>>> distribution endeavours by the likes of Netflix (and cat videos on
>>>>>> Youtube), large incumbents start thinking about how they will be abl=
e to
>>>>>> continue to grow revenus/profits when customers will shift spending =
to
>>>>>> vspecialty channels/cableTV to Netflix and customer growth will not
>>>>>> compensate.
>>>>>=20
>>>>> 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 busines=
s. 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.
>>>>>=20
>>>>>=20
>>>>>=20
>>>>>> So they seek new sources of revenues, and/or attempt to thwart
>>>>>> competition any way they can.
>>>>>=20
>>>>> 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). Th=
ey did
>>>>> a bit of an advertising campaign of "smart home" offerings, but that =
seems
>>>>> to have never grown beyond a pilot.
>>>>>=20
>>>>>=20
>>>>>=20
>>>>>> 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 u=
se
>>>>>> 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, adde=
d
>>>>> cable card and made that available as a "hip/cool" set top box offeri=
ng and
>>>>> charge another 10.00 a month on top of the standard dvr rental.
>>>>>=20
>>>>>=20
>>>>>=20
>>>>> Would be interesting to see if those cable companies that are agreein=
g
>>>>>> to add the Netflix app onto their proprietary STBs also play peerin=
g
>>>>>> capacity games to degrade the service or not.
>>>>>=20
>>>>> So how is the content delivered? Is it over the internet? Or is it ov=
er
>>>>> the cable plant, from cable headends?
>=20
