From recent headlines:
Now that the FCC hearing in Standford is over, Comcast had dumped the idea of a consumer “bill of rights” for consumers. Instead, apparently picking up on Commissioner McDowell’s confusion over ICANN and how it works, Comcast has announced it is joing the Distributed Computing Industry Association (DCIA). While purportedly eager to include us regular folks in the dialog, consumer interests will not be represented in the initial discussions.
Comcast also is looking at bandiwdth caps, but that’s in addition to “managing” p2p, not instead of managing p2p.
Meanwhile, Earthlink is apparently walking away from Wireless Philly, and may simply shut the system off unless the city buys it out.
And folks ask me why I don’t “trust the market” when I am skeptical that big companies will stick by their commitments….
Stay tuned . . . .
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“And folks ask me why I don’t “trust the market” when I am skeptical that big companies will stick by their commitments….”
Actually you counter answered your own question. We don’t have a market in broadband or wireless. We have a bunch of two tiered oligarchies. Or for the sports fans, essentially 4 MLB’s whose only competition is seeing who can pad the CongressCritters war chests the fastest. That Harold is not a market in the classic definition.
Not only that but the complaint should not be about the ‘market’ but the Pols that prevent a market from operating in this space. With spread spectrum technologies today it would be quite possible to have a natural market develop. But is not permitted under the circumstances of the Comission and its overlords in Congress.
the 250GB cap on GBs/mo technically gets Comcast off the hot seat of net neutrality violations – its significance lies in the notion that enough bandwidth must be made available by Comcast for all customers who use up to 250GB – or to manage the congestion that occurs otherwise neutrally as well, with the new agnostic protocols underway …
except for P2P, when as portrayed mistakenly by George Ou in an April 21 FCC filing in Docket 07-52, would get different treatment – like 10 passengers storming a plane with 100 seats – taking 75 of them, leaving the other 90 passengers with a shortage of 25 seats – instead of dealing with all passengers neutrally at the gate and beforehand, when reservations are made
johnmc, i’d call it a market failure in the sense that competition cannot achieve the efficiencies accomplished under a monopoly-duopoly network – but it’s still a “market” – so if stripped of all the regulation and political influence, your point seems to be that spectrum spread would not depend on similar scale/scope efficiencies and result in enough players and customers/player to lead to effective competition
That’s about 90 some odd KB/s average for all always-on uses combined. One streaming video of what is currently considered practical high-res is about 30.
Comcast could well be joining the DCIA for several reasons. First of all, it needs to keep an eye on what that group is doing, and one of the best ways to do that is to become a big member. Secondly, it may be interested in using the group’s “P4P” scheme as an anticompetitive weapon. As I’ve written elsewhere, P4P works by directing P2P traffic to computers within the same provider’s network. The bigger the provider’s network, the more backbone bandwidth is saved. Thus, P4P helps the largest ISPs but doesn’t do a thing for the smaller ones. Great way to get rid of those pesky little guys, leaving a nice, comfortable duopoly. Thirdly, by joining the group, Comcast can soothe the gamers and pirates who are the primary users of P2P and blunt the attacks by “SaveTheInternet” and other groups, which have come after it merely because it throttled P2P back a little.
By the way, Barry Payne comments above that “competition cannot achieve the efficiencies accomplished under a monopoly-duopoly network.” As a small ISP, I strongly disagree. We’re more efficient than any of them. We just need to avoid being killed off by so-called “neutrality” regulation which in fact is so non-neutral that it tilts the playing field against small providers.
Barry, the majors, the Commission and Congress seem to have view that bandwidth needs to be rationed. What else do you call a ‘cap’? Bandwidth is expanding so fast technically it would be feasible that everyone in the US could have a 1Gb link in the next 5 years. The only thing holding this back is the willingness to do it. ie. the oligarchy nature of the major providers holding back investment because they don’t want to.
I would also point out that P2P is a bogeyman. Want to watch traffic spikes? Go point your ethereal sniffer on a network segment where most of the users are running Google applications. Google Gears is a great development platform but is AJAX enabled. As a consequence it is spitting out HTTP GET and PUT requests all the time. That is only going to increase as SAAS enabled applications take over the software market.
johnmc, exactly … the GB cap is a crude version of rationing bandwidth, because it doesn’t track capacity cost 1:1, but it’s “neutral” in price and access and constitutes a “dumb pipe” via the agnostic treatment of content to that maximum, beyond which selective congestion control kicks in
the “oligarchy” is behaving in classic monopoly fashion to cut supply, raise price and degrade quality – the preferred choice by comcast is to ration bandwidth by loading the network with low users and kicking off the high ones arbitrarily while pushing aggregate peak use right up to congestion without triggering it – then degrading service arbitrarily as well when it crosses the line
the GB cap forces comcast to loosen up and increase the ratio of available peak bandwidth to uncongested peak use – the cap drops off at 250GB with sharp penalties as a calculated sweet spot between between losing high users (or force them to a higher grade) and retaining low ones, while restricting video competition to its cable tv content
under competition, at least one or more players would have extended the GB cap (or the minimum always-on bandwidth) to its full dedicated 24/7 maximum capacity, which requires heavy levels and concentration of use per connection to soak up the sharp increases in efficiency associated with declining unit cost
that’s why comcast is worried about FIOS – under market failure, there’s not enough business for both in many places
otherwise, the areas served by small isps are not effective competitive substitutes for the majors – they’re largely complements to them by way of resold facilities and bandwidth
the result is broadband output on the higher, sub-optimal points of declining cost curves coupled with suppressed technological upgrades – and without net neutrality, it’ll get worse, and it could get much better under true “unbundled net neutrality”
“under competition, at least one or more players would have extended the GB cap (or the minimum always-on bandwidth) to its full dedicated 24/7 maximum capacity, which requires heavy levels and concentration of use per connection to soak up the sharp increases in efficiency associated with declining unit cost”
In a competitive market, the first player who is capable of delivering a suite of plans at various capabilities beyond what their competitors can do will win. But that is now what we have here. We have captive market manipulation.
“that’s why comcast is worried about FIOS – under market failure, there’s not enough business for both in many places”
Comcast has more to worry about FIOS than market failure. Which is better held to another day. Your observation holds true if you remain with a monopolistic pricing model. But there are always customers when better pricing/service is available. Watching how cell phone usage – cost implosion from the 1980’s till now tells us that. The Cable Co’s biggest problem is shared cable architecture, poor service and price inflation beyond their true costs.
For example, my cable provider Time Warner bought out Comcast. Now the cable plant that runs by my home is 15 years old. ie its fully depreciated if you follow the IRS class tables. So on the books TW has 3 items — Labor, Electric and General&Administrative. Labor could be reduced if TW did pre-emptive modem tests. [phone companies were doing something similar since the days of Automatic Electic in the 50’s.] TW is already reducing energy costs based on news reports. That leaves G&A expense. That’s reduced by automation and layoffs. Fact is if cable costs followed even the phone companies trend line since the 80’s; my cable bill should still be about $50 not the $110 that it is right now from price hikes. Which is funny because the phone companies have not been noted for their efficiencies historically.
I support net neutrality but not for the reasons you suggest. Nor do I hold much hope that net neutrality will help in the marketplace. NN has only marginal impacts on Access a whole different animal. Access pricing will only be impacted by more competition.
Bandwidth isn’t free. If you want to charge a consumer a reasonable fee per month and not go bankrupt, the charges need to reflect your costs. So, yes, that means holding each user to an amount of consumption that prevents him or her from costing the provider more than he or she is paying. What’s so difficult to understand about that?