[11445] in Commercialization & Privatization of the Internet
Re: your mail
daemon@ATHENA.MIT.EDU (Karl Denninger)
Sun Apr 3 01:15:58 1994
From: karl@mcs.com (Karl Denninger)
To: com-priv@psi.com
Date: Sat, 2 Apr 1994 18:15:28 -0600 (CST)
In-Reply-To: <9404021709.AA08870@bsu-cs.bsu.edu> from "Anonymous <nowhere@bsu-cs.bsu.edu>" at Apr 2, 94 12:09:18 pm
> " automated anonymous remailing service."
> Subject: re: Use market forces to deal with routing questions & charging
>
>
> karl@mcs.com (Karl Denninger) writes:
>>Boy, that sounds like restraint of trade, doesn't it? "Banding together" eh?
>
> No. I did not advocate any action that would remotely correspond to
> restraint of trade. Simply choosing to state that "we think policy X is
> will hurt customers, and provider Y is doing this" is in no way related to
> restraint of trade.
Hurt WHO'S customers? Yours? Certainly. Heh, you know, those big
hardware stores undercut my little bitty hardware store all the time.
That hurts my customers too. Waaaaaaaaa! :-)
It won't fly.
> Simply jointly acknowledging
> something seems to be an appropriate use for voluntary industry
> associations.
Acknowledging WHAT?
> >Now, you said that providers shouldn't care what you do with the link. Ok,
> >let's take that as a given.
> >Get ready to pay 5x what you're paying now for that T1 line. I believe the
> >common wording is "bend over and grab your ankles".
>
> The *only* thing the provider needs to care about is how much bandwidth
> I'm using on that link. They have *no* need to care where that bandwidth
> comes from.
Gods you're insane. Let me spell it out. Every circuit that I sell to
someone, every connection -- is one that someone else CANNOT sell. Now,
explain to me why national providers have an incentive to allow me to take
away some of their business.
This can ONLY work if the "national" providers want to sell backbone
segments to people like me, or if I'm not a major threat, or if they think
I can do it without them anyway (by joining the CIX and pulling my own
line). If they believe that, then it is better to get something from me
than nothing, which is the other possibility they face. Otherwise, there
is no incentive.
Sprint, as an example, is the closest thing to a phone company that I've
found for this stuff. I happen to LIKE that, especially because they do a
damn good job of it. Our connection just works. Good enough for me.
> In
> terms of charging only those you connect to, as I said thats the only thing
> you can do since you don't get enough useful information anyway by charging
> per ISP or customer or whatever.
See above. The invisible hand of competition says that I'm out of my mind
to cut my own throat. You need some incentive to get me to listen.
Let's assume that I'm MR. BIG PROVIDER. I sell connections in Chicago to
customers of all sizes. You, MR SMALL ISP, come to me and want a T1 which
you intend to resell connectivity from.
Would you mind telling me why I shouldn't just tell you to go screw yourself?
In fact, that is EXACTLY what some national providers WILL tell you today,
and what more than one <did> tell me last year.
It is called free trade. Nobody can tell you that you MUST sell to
someone -- there are only a few -- very few -- restrained activities having
to do with discriminatory practices. I can refuse to sell to anyone with
long hair quite legally. I can't do so on the basis of color, creed,
gender or a few other items, but for the rest? It sure is my perogative.
If you wish to argue otherwise, start with the food stores (limit 3 on
this special). Why? Because if and when they sell below cost as a "teaser"
their competitors would be in there buying the whole damn store out -- both
to get the product and to prevent them from being able to compete with
their customer base!
Exact same example, exact same policy, exact same result.
I send high-volume customers to SPRINT all the time right now. Why?
Because they did NOT tell me to go screw myself when I asked them about
resale -- instead, they came back with what I thought was a very rational
policy and structure. I said "you bet", and now recommend that others who
need T1 links in our area go talk to them. T1 lines aren't my business
today. I know of at least one other confirmed T1 customer that wouldn't be
using Sprint today if they HAD told me to piss off.
This is generally known as scratching each other's backs.
Now tomorrow I might have enough infrastructure and connectivity that
selling T1s is a good business decision. If and when that happens,
then I probably won't care if Sprint doesn't like me any more. But until
that time there is a symbiosis here, and as such we get along quite well.
> >I've done this pricing, I've built national backbones, I've done the
> >engineering and installation for nationwide service.
>
> It doesn't matter who I am since I am trying to argue from reason,
> "argument from authority", I've done X so I must be right about "statement
> Y, rational or not", doesn't wash.
It washes quite well when the argument is about the cost of service and the
realities of the competitive marketplace. Two items you do not seem to
understand very well.
> Lets say the gas stations did have interconnects. If you are connected to a
> Shell station pump, you would pay for all the gas coming through that. If
> some of it comes from Amoco, that means there is a pipe between Amoco and
> Shell, and Amoco had better be charging Shell for whatever it sells to
> Shell via that pipe. If they don't thats their problem. Amoco would charge
> Shell, and Shell would pass along the cost as part of what they charge
> their customers.
Or they turn off the interconnect. If you're Mr. Small Gas Station you're
screwed. There is NOTHING you can do about it.
> >Those who have think the CIX is the best thing since sliced bread, because we
> >KNOW what the alternative costs to negotiate and operate, and we KNOW that
> >we couldn't afford it.
>
> A standard cooperative routing agreement like the CIX has doesn't cost
> anything to negotiate, either places sign it or they don't. Each place
> signing the agreement would be paying the $100 or whever for
> administrative costs once for dealing with it (it seems actually its
> probably much less than that, copy something, file it, etc).
Go ahead and try it. You need to start with ANS, Alternet, PSI, and
Sprintlink. Come back when you have those signatures. I'll be waiting,
but I'm going to breathe in the meantime -- lest I die due to lack of
oxygen.
> My words stand behind themselves, either they are rational or they aren't
> and deserved to be attacked.
See above. You're arguing as if you have a RIGHT to do business on terms
you want, and a RIGHT to transit traffic to other providers. You don't and
never did. Therefore, you either negotiate something or take your chances.
I say you're not rational.
> My identity has *nothing* to do with the
> correctness or incorrectness of my arguments.
It sure does. What if you're really an ANS employee?
More to the point, what if you're a SprintLINK customer WHO WAS TOLD IN
ADVANCE that you had to join the CIX as a matter of policy in order to do
resale? I think that is quite relavent, as to state your name would be
tantamount to admitting fraud. A fraud we could then take to your customers
and use as a marketing tool, and a highly effective one.
If you've got a competitor in your market, you're in trouble if this comes
to light. It makes perfect sense to post as "Mr. Anonymous" under those
conditions.
> In some sense since we aren't
> a member of the CIX we *are* standing behind our convictions.
Who are you connected to and under what terms?
> However, I
> see no reason, if there is a chance that some ISP or CIX might decide to
> cut us off, to force customers and other people involved with this ISP to
> be impacted by my statements.
Like perhaps the ISP you purchased your circuit from? It came from somewhere.
Most ISPs have SOME kind of restrictive clause on resale, whether it be "join
the CIX" or just a plain outright NO.
> I'm willing to stand behind my own
> convictions, but not to place other people in the line of fire (except to
> whatever extent I might have simply bringing up the flaws I see in the CIX
> concept).
Yeah, right.
--
--
Karl Denninger (karl@MCS.COM) | MCSNet - Full Internet Connectivity (shell,
Modem: [+1 312 248-0900] | PPP, SLIP and more) in Chicago and 'burbs.
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