[171845] in North American Network Operators' Group
Re: Observations of an Internet Middleman (Level3) (was: RIP Network
daemon@ATHENA.MIT.EDU (Owen DeLong)
Thu May 15 13:37:41 2014
X-Original-To: nanog@nanog.org
From: Owen DeLong <owen@delong.com>
In-Reply-To: <4EAA99EC-6E3C-44DC-8BD7-932E4B99A945@cable.comcast.com>
Date: Thu, 15 May 2014 10:06:41 -0700
To: "McElearney, Kevin" <Kevin_McElearney@cable.comcast.com>
Cc: "nanog@nanog.org" <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
On May 15, 2014, at 7:57 AM, McElearney, Kevin =
<Kevin_McElearney@cable.comcast.com> wrote:
> Upgrades/buildout are happening every day. They are continuous to =
keep ahead of demand and publicly measured by SamKnows (FCC measuring =
broadband), Akamai, Ookla, etc
I didn=92t say they weren=92t doing any upgrades/buildouts.
I will say that the copper capabilities in my neighborhood are so far =
behind demand(s) that it is abysmal. There hasn=92t been significant =
maintenance to the $TELCO copper plant in my neighborhood since it was =
installed in 1960.
> What is not well known is that Comcast has been an existing commercial =
transit business for 15+ years (with over 8000 commercial fiber =
customers). Comcast also has over 40 balanced peers with plenty of =
capacity, and some of the largest Internet companies as customers.
I=92ve been asked by my employer to stop picking on specific large ISPs. =
However, my experiences with $CABLECO have been as described. The =
infrastructure in my neighborhood was horrible and did not improve at =
all until I ordered business class service from them. I=92ve seen =
nothing to indicate that there is any significant effort to improve =
customer satisfaction, but lots of things to indicate that they are =
trying to leverage as much revenue out of as little investment as =
possible.
Owen
>=20
> - Kevin
>=20
> 215-313-1083
>=20
>> 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.comcast.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 =
upgrades
>>>> 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 of
>>>>>> 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 =
necessarily
>>>>> 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. =
*They see
>>>>>>>> no reason to spend money making customers happy.* They can =
make more
>>>>>>>> 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 in
>>>>>> 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 access.
>>>>>>=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 =
exist.
>>>>>>=20
>>>>>>=20
>>>>>>=20
>>>>>>> When you combine this with threath to large incumbents's media =
and media
>>>>>>> distribution endeavours by the likes of Netflix (and cat videos =
on
>>>>>>> Youtube), large incumbents start thinking about how they will be =
able 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 =
business. 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). They 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 use
>>>>>>> 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, =
added
>>>>>> cable card and made that available as a "hip/cool" set top box =
offering 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 =
agreeing
>>>>>>> to add the Netflix app onto their proprietary STBs also play =
peering
>>>>>>> capacity games to degrade the service or not.
>>>>>>=20
>>>>>> So how is the content delivered? Is it over the internet? Or is =
it over
>>>>>> the cable plant, from cable headends?
>>=20
