[11093] in Commercialization & Privatization of the Internet
Re: ANS and the CIX - have they really connected?
daemon@ATHENA.MIT.EDU (George Herbert)
Mon Mar 21 22:11:56 1994
To: karl@mcs.com (Karl Denninger)
Cc: gwh@crl.com (George Herbert), matthew@echo.com, com-priv@psi.com,
cook@path.net, fair@apple.com, stpeters@dawn.crd.ge.com,
washburn@cix.org
In-Reply-To: Your message of "Sat, 19 Mar 1994 14:53:32 CST."
<m0pi81U-000BbiC@mercury.mcs.com>
Date: Sat, 19 Mar 1994 19:45:15 -0800
From: George Herbert <gwh@crl.com>
>From: karl@mcs.com (Karl Denninger)
>"Small fry"? What do you call MCSNet? I posted before where we started
>from! $5,000 and a dream! If that's not small fry I don't know what is.
>This January we were able to afford to offer full CIX routing through our
>membership. That check was written BY HAND on a <STARTER CHECK> from the
>bank, and I signed it! Small fry enough for you?
There are smaller fry than you out there Karl. You now have two full
time employees, and are probably experiencing double digit monthly
growth, correct?
>It really pisses me off when people go off on this tangent without doing
>ANY investigation or validation of the facts. As someone who DID the
>legwork, who DID price the alternatives, and who DID spend two months of my
>life, 100% of the time, setting this thing up in what I believe to be the
>most efficient way I find it highly dishonest and disingenuous that people
>want to snark about the costs involved.
You are far from the only person who has done that, Karl. Several of
them are on com-priv.
>I don't hear ANYONE standing their ground. I have yet to see ONE -- NOT
>ONE -- single cogent proposal for the small provider that I, as a member,
>could get behind or champion to the CIX board. IF and WHEN I see one I
>will evaluate it and, if it has merit, get behind it. Those who want to
>snark have a long way to go on this, and they can start by putting forth
>their suggestions for people to look at and comment on.
How about this. National provider buyin is the existing structure.
Providers who are limited to one geographical area have a lower fee
(say $4k). Other elements of agreements stand as is.
>All I hear is complaints about how "awful" that $10,000 fee is. You know
>what? Its the best deal out there right now. Anyone who wants to try to
>challenge this in Congress or on any other legal level is going to have to
>deal with testimony from the likes of me that says, roughly, that I believe
>my costs (AS THAT SACRED SMALL BUSINESSPERSON) would have been 5,000% HIGHER
>had the CIX model not existed, and that in fact as a small businessperson
>without the CIX I would have been effectively locked out of this market
>entirely. Oops. There goes your Congressional action, and furthermore,
>you could be found guilty of lying to Congress.
Equally well educated and intelligent people have waded through the existing
morass of network connection policy, economics, and politics and come to
different conclusions. If everyone came to the same ones you had there
wouldn't be any argument here right now, would there? I don't _know_
who's right. All I know is that it's a mess and there are at least
some unhappy people.
>> The CIX is the best thing to ever happen to national-level provider
>> interconnectivity.
>
>In a word, bullshit. MCSNet is not a national-level provider. We provide
>access to Chicagoland. We have two locations here, soon to be three. We
>have financed ourselves ENTIRELY through sales -- NO bank would come
>anywhere near us, we have no SBA support, NOTHING. This company started
>providing service a year ago with $5,000 in cash and a couple of Intel
>machines for assets.
Chicago is a pretty large customer market. You didn't buy in to CIX
when you started, you waited until you'd built up that market some, right?
In areas where the market will never build to that level people are SOL
on finding a provider unless something bends somewhere. Once you get
big enough that you can drop $10k out of a month or two worth of income
then it's a different story, but there are places that those income levels
will simply never happen.
>Again -- go take this to Congress. I'll show up with balance sheets and
>ledgers from Day #1 showing that the complaints are not only unfounded,
>they are criminally perjurous. Careful with that fire; you might get
>burned.
>> It also is a nightmare for local area providers
>> in relatively small areas. It essentially is saying that a certain
>> sized market area (say Santa Cruz, CA) doesn't deserve to get relatively
>> cheap internet access.
>
>It certainly does NOT! Santa Cruz, CA, ALREADY HAS that access from
>Netcom, which I will note, IS a CIX member.
Santa Cruz did not have any access at the time scruz.net occurred,
if I remember the timing on Netcom's expansion down that direction
correctly.
>Given the snarking on the net about their performance problems of late I
>would suspect that a Bay Area/Santa Cruz competitor could make SEVERE
>inroads on their business in very short order. I suggest that those who
>wish to bitch give it a shot.
Perhaps you missed something...
>This is a <highly> competitive market in Chicago. There is an ANS direct
>attach customer here who is competing with us. The marketplace will
>validate which of our approaches is best, as it usually does.
Did they start before or after you did? The marketplace isn't going to
validate anything in an industry with three digit annual growth; it's
an issue of keeping up with the flood, not being precisely the best
solution.
>I bet that anything in that part of CA would also be a lively market. Just
>make damn sure you are technically competent before you start this, and
>properly evaluate the business issues, or you WILL get resoundingly whupped,
>as you should.
Again, I think you missed something.
>[...]
>Further, you've got another problem. As I've posted here MANY times
>before, if people have problems with the CIX model or want to do something
>competitive with it I'm game. Right here. I have the office and will work
>on such a project. Note that NO ACTION has been taken against me for
>suggesting such a thing. Restraint of trade? Collusion? Where?
>
>I also note with amazement that all those who snark about the CIX costs
>haven't come to me with proposals and discussion on this very issue. Could
>it be that this is all just sour grapes because the CIX is a handy target,
>and there is no real substance to any of it?
I think the fact that everyone's here talking in a (mostly) calm manner
about it indicates that nobody wants to start out solving the problem
by suing anyone. My father, whose chosen profession is corporate
attorney, taught me better than that. There are almost always better
solutions than lawsuits. So far we've seen a lot of venting steam
by peopel on both sides of this issue. I made a (real short) proposal
somewhere above which could go somewhere on actually improving the
situation.
>To those who want to snark: put your CONCRETE proposals up here for
>inspection under full daylight.
$4k buyin for single geographical area providers, $10k for nationals,
and existing agreement stands in other areas.
-george william herbert
Speaking only for myself
