[11462] in Commercialization & Privatization of the Internet
Re: your mail
daemon@ATHENA.MIT.EDU (Joseph W. Stroup)
Sun Apr 3 10:33:03 1994
Date: Sun, 3 Apr 1994 01:57:38 -0800 (PST)
From: "Joseph W. Stroup" <nettech@crl.com>
To: Anonymous <nowhere@bsu-cs.bsu.edu>
Cc: com-priv@psi.com
In-Reply-To: <9404030541.AA01459@bsu-cs.bsu.edu>
I can't resist. T-3 circuits in a box ? What BULL. Your stupidity showed
when you made the telco comments. A way to get around pricing? I think
not. You for sure don't know a darn thing about the telco business and a
whole lot more. Prices going down later this year? On T-1 & T-3 cross
country , hey I need some air. Prices change all the time but, T-3 deals
are still handled sort of special. Jump out from behind the Internet in a
box kit.
As for the CIX, I thought that was some sort of breakfast food your
talking about. What crap.......
Joseph Stroup
On Sun, 3 Apr 1994, Anonymous wrote:
>
> karl@mcs.com (Karl Denninger) writes:
> > What could happen with, say, $200,000 in additional annual
> >income for the CIX? I can think of a couple of things right off the bat:
>
> >1) New points of service. We could have a CIX-West, CIX-East,
> > CIX-Midwest and CIX-South. All connected with T1 lines. NOW the
>
> Obviously CIX could do things like this with $200,000 extra in annual
> income. So could the ISPs whose money that is you are planning to spend
> (and they probably would prefer to decide voluntarily how to spend their
> own money rather than let you decide for them). It could be used by other
> companies that might wish to provide interconnection points competitively
> to the CIX. If they choose to they can buy into this vision and this
> provider, CIX. Or perhaps they might wish to form CIX2 with their money.
> Or connection points in different places from where you wish to place them,
> perhaps a provider wishes to try to get one near where they are and wants
> to put his money to that use. Perhaps you can persuade people to buy into
> that vision, but if so ask them to do so voluntarily and with an
> understanding and agreement with the value they are getting for their
> money, not simply because they should pay in so they can get "guaranteed"
> routing (without a good argument for why they should fear for their
> routing).
>
> I actually wouldn't be surprised to see some competitors to CIX in terms
> of connection points, and other private backbones begining to arise.
>
> People always seem to be able to think of ways to spend other peoples
> money for them, and seem to feel they know better how to spend it than the
> people they wish to take it from.
>
> > More service. As membership grows, those T1s could become T2s and
> > even T3s. Imagine a 45mbps AUP-free <cooperative> backbone, with a
>
> As will be the case in general with competition driving the prices down,
> and with other providers whose infrastructure will be built on selling to
> willing customers (including the CIX if they start only charging direct
> connects). You don't need to try to make CIX into a monopoly to get these
> things, if anything competition will be more likely to make them come into
> being, there will be creative things people will do to create alternatives.
> I've heard stories from some people about ways they have discovered to get
> T1 long haul telecomm lines (and presumably T3 as well though I didn't ask
> at the time) for an incredibly tiny fraction of the price people usually
> pay for them because of all the unused fiber out there, if you know where
> to buy it from and how to get past the usual pricing structure. I can't
> give details on this since I don't know them at the moment, and I haven't
> dealt with this stuff directly myself. However you will start seeing the
> results later this year probably.
>
> >Those ISPs who have made their business selling "resale" connections
> >(primarily
> > ANS) are in big trouble in this situation -- is it any wonder they
> > would oppose this? All of a sudden you have available for $10k a
> > year what ANS would like to charge you $70,000 for!
>
> Just as it is no wonder that existing local/regional ISPs with money to
> throw around might oppose the coming hoard of mom and pop ISPs
> bootstrapping from PCs and low budgets and threatening to come in and add
> competition.
>
> >What are you going to do if the following happens?
>
> The case presented here was dependant on several assumptions which were
> unlikely, such as companies forgoing selling to resellers, which seems
> questionable. For instance Sprint is basically in the long distance
> business, why wouldn't it try to make money selling to locals? If there is
> a market that CIX or other companies abandon for resale to ISPs, are you
> sure that no one else will step in to fill their place, given the potential
> money and the growth that everyone seems to see in this area? If there is
> money to be made, why wouldn't they? The links can be bought, and there are
> enough companies with deep enough pockets that it would be done. At the
> very worst case it would start out with T1s among the small ISPs
> themselves. It really appears to be a straw man that doesn't make sense,
> just a scare scenario. And we might get hit by a meteorite also. Perhaps
> there is more chance of what you describe happening, but I'd like to see
> rational arguments as to why it would happen and why no one else would step
> in. You yourself mentioned that if there were a threat of this you would
> step in and set up a CIX in the midwest. CIX isn't and wouldn't be the only
> solution, or there is something seriously wrong with existing companies,
> or with investors and entrepreneurs these days. We don't need to latch
> desperately onto the first thing that some people feel is the way to go
> when this industry is really just taking off now and probably isn't in
> danger of heading back to the way things used to me. Especially not without
> rational discussion of the alternatives.
>
> Its premature to assume there won't be other companies and providers
> getting into the interconnection point and backbone network area, simply
> because it hasn't been done yet. It especially takes a while for companies
> to decide to risk getting into an area the government has been involved in
> before (and is still unclear over its role in) and where they fear the
> government treading into again and competing with them or over-regulating
> them, etc.
>
> >Instead, you have to negotiate 30 agreements with 30 other
> > people, and pay all of them.
>
> Why are you assuming that this will be the case (even if it perhaps was at
> some point in the past, or threatened to be at least)? Why couldn't it be
> the case that you have a very low price place to provide cooperative
> routing agreements for a small filing fee for signing the contract? If all
> the providers benefit from a central clearinghouse, then it will happen.
> Perhaps another is in the works now, I don't know. If places are paying
> $10k/yr and deciding its in their self interest to have cooperative routing
> agreements with the CIX, will they suddently become irrational if they can
> get that same thing for $50 once? Isn't it possible that if the existing
> ISPs decide to adopt a rational policy of having agreeing to route traffice
> between all of the pipes connecting to the ISP, that this policy becoming
> the defacto standard would let the industry work? Think about it, the
> reason you pay to connect to a backbone would be that it routes traffic
> among all the networks connected to it. If you connect to a regional/local
> ISP, you expect all the traffic between customers to be routed, and you
> expect any traffic outgoing from that ISP or *incoming* traffic for
> customers of that ISP to be routed to/from wherever they connect to. So if
> every node rationally satisifies its customers needs by routing traffic
> between its other customers and its connection point(s) to the rest of the
> net, then things automatically work out. Again, you pay only for the
> connections you make to other nets, and you only charge the customers that
> connect to you.
>
> If the industry chooses voluntarily to behave this way, it would be hard to
> change, just like it would be hard to buck the internet culture by trying
> to use junk mail marketing.
>
> >And their incentive to allow you to
> > compete with them by agreeing to allow you to exchange traffic?
> >Zero.
>
> Companies have a large incentive to allow traffic to be exhanged. In this
> scenario its because it works out automatically, and in general because
> that is what is needed to provide value to *their own* customers, to give
> them places to connect to, and to build the net. If companies have zero
> incentive to agree to exchange traffic, why are they doing it now and why
> are they joining the CIX???
>
>
>
