kontos
xyzzy
join:2001-10-04
West Henrietta, NY
| Woo Hoo! Free capacity!
said by Karl Bode  :Again, there is absolutely no evidence that Internet growth is accelerating so quickly that carriers can't manage it with modest capacity improvements. Ah, so as long as the capacity improvements are "modest" The carriers don't have to pay for them. Got it. |
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sjr
join:2006-08-27
Osseo, MN
| Interestingly that is how most businesses run. They use part of their profits to maintain and expand their infrastructure. It is what one would call investing in the future. But I suppose if one can only see the next quarters profits one would never expand since that costs immediate money, never mind the payoff down the road in a year or 2 or more. Since the telecom's and cable companies seem to operate in a world of handouts and increasing investor profits every quarter they are not very good at planning ahead. |
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Dogfather
Premium
join:2007-12-26
Laguna Hills, CA | reply to kontos
They never pay for them, their customers do. |
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kontos
xyzzy
join:2001-10-04
West Henrietta, NY
1 edit | I'd agree with you in a metered billing price model. With that model, increasing capacity increases revenue (as long as you can get your customers to use the increased capacity).
But that's not where we're at today. Today we have the all you can eat price model.
All you can eat pricing works great when you're adding customers (revenue) faster that you're adding capacity (costs). The ISP bean counters are starting to crap their pants now because customer adds are slowing down while costs continue to rise. Their graphs are showing the cost and revenue lines starting to converge.
All that the study says is that the convergence may not happen as soon. |
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Dogfather
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| In all models where customers are billed, customers are paying.
There is no evidence that ISPs are seeing a "capacity" crush and when they are forced to turn over evidence, like Bell Canada, it turns out they were lying.
These moves to capping and overage fees aren't about capacity and never have been. They have always been about protecting their video revenues from competitors like Netflix, Amazon, Apple and Microsoft. |
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espaeth
Digital Plumber
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| said by Dogfather :There is no evidence that ISPs are seeing a "capacity" crush and when they are forced to turn over evidence, like Bell Canada, it turns out they were lying. If you focus solely on the Bell table with the percentage of congested links it's easy to say there isn't a capacity issue. If you actually look through the rest of the supporting documentation published here: »The Bell Disclosure! take a closer look at the big document in the zip. The last slide showing exponential growth in the number of ATM cell loss events is most telling. The data could have definitely been packaged better, but it's quite clear that all is not well with the growth of traffic.
said by Dogfather :These moves to capping and overage fees aren't about capacity and never have been. They have always been about protecting their video revenues from competitors like Netflix, Amazon, Apple and Microsoft. The companies offering video services are just middle men. They built a distribution system that economically allows content producers to get their product to subscribers. If you convert to IP based services they are still going to get their cut, only it's going to end up costing you more due to the extra costs associated with IP video delivery.
The big problem is that people are expecting that they can drastically increase the usage of their Internet connection while paying the same or less than they pay now. That, I'm afraid, is an unrealistic expectation. |
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Lazlow
join:2006-08-07
Saint Louis, MO
| espaeth
The part you are forgetting (and ISPs are trying to hide) is that the cost per/unit has been and will continue to drop dramatically. We can all see from the stockholders reports that ISPs are making huge profits. Will expanding the capacity of their networks cost a lot of money? Certainly. But if they quit looking at next quarters numbers and instead focus on the numbers over the next few years there will be no issue. |
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Dogfather
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4 edits | reply to espaeth
The bandwidth apocalypse is a total myth and Bell's claims of congestion handily debunked. This capping is all about protecting these cable and telco's lucrative VOD and other video revenues, especially from providers like Netflix which is appearing on more and more devices like the XBOX 360. By capping and charging overage fees, cable and telco operators abuse their market position to price video competitors out of the market.
It's a very simple and often repeated concept. Customers pay for their service and these companies are profitable. Just because they are greedy is not an excuse to allow them to abuse their market position and kill innovation and competition. |
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espaeth
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| reply to Lazlow
said by Lazlow :The part you are forgetting (and ISPs are trying to hide) is that the cost per/unit has been and will continue to drop dramatically. Ahh... but *why* and *where* has the cost per unit dropped? At the core, companies have been able to take leased fiber and swap out GigE optics for 10GigE optics or even xWDM optics to get N*10GigE on the same physical fiber pair.
Upgrades at the core are easy because: the technology is there to provide 1000+% increase in capacity over GigE on the same fiber path, the interfaces are available for existing network hardware already used in core positions, and the core represents a handful of physical connections in relation to all of the ports at the edge.
Growing bandwidth at the edge isn't so simple. Hardware is cheap and purpose built. You want to upgrade to DOCSIS 3.0, you need to swap out every single cable modem on the plant to get the true full benefit. You want to upgrade to VDSL? You need to deploy more remotes closer to the subscribers at massive costs *AND* swap out every existing customer DSL modem with a VDSL capable model. You want to upgrade FiOS BPON to GPON, you have to replace every ONT on the network segment you upgrade to be GPON. Even then, you still top out at about a 300% increase in capacity over what you have today at ridiculously high costs.
The growth model at the core and the edge is highly disproportional. At the edge you spend a ton of cash to get minimal gains; at the core you can get massive gains with minimal cash investment. |
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espaeth
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| reply to Dogfather
said by Dogfather :The bandwidth apocalypse is a total myth and Bell's claims of congestion handily debunked. If any actual network engineer (not just the people who claim to be on these forums) looked at the Bell numbers and didn't see a problem, then I feel sorry for their customers and can only hope someone helps them find work in a different field soon. Network delay breaks real-time applications while only causing minor impairment to file transfers. While the world mourns that users in Canada have their P2P transfers slowed down, I'm sure the other people who can actually make VoIP phone calls, play online games, and remote desktop into work without facing application-breaking latency are better off.
said by Dogfather :This capping is all about protecting these cable and telco's lucrative VOD and other video revenues, especially from providers like Netflix which is appearing on more and more devices like the XBOX 360. By capping and charging overage fees, cable and telco operators abuse their market position to price video competitors out of the market. The majority of their revenue is already protected by the sharp consumer learning curve for setting up these services. While there are indeed millions of people that take advantage of these services, they are still the minority and will continue to be so for some time. Still, when you order VoD from your LEC or MSO on their infrastructure, the cost of delivery is already factored into the content. When you download it off the Internet, the cost of delivery gets factored into HSI delivery costs. The problem is right now the ISPs are struggling to find a good method to recover the excess service delivery costs the extra IP traffic generates.
Make no mistake, you're going to be paying for the distribution either way. The Internet option will be more expensive because IP infrastructure is more expensive to build out than traditional video delivery systems.
said by Dogfather :Just because they are greedy is not an excuse to allow them to abuse their market position and kill innovation and competition. No matter how hard anyone tries, it's impossible to kill a good idea. The corollary to that is that it's amazingly easy to kill half-ass ideas. Right now a lot of the business models are based around:
1) Put content on the Internet
2) ?????
3) PROFIT!
Not a lot of people figuring out that #2 step... |
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Dogfather
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4 edits | It's very easy for companies in dominant market positions like telco and cable operators to kill good ideas, that is why we have antitrust law.
1. Put content on the internet.
2. Charge monthly fees or PPV fees (eg Microsoft, Apple, Netflix, Amazon).
3. Profit
4. Cable and telcos abuse market position to cap and charge overage fees pricing #2 out of market thus protecting their own video services from good ideas. |
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Lazlow
join:2006-08-07
Saint Louis, MO
| reply to espaeth
"You want to upgrade to DOCSIS 3.0, you need to swap out every single cable modem on the plant to get the true full benefit."
espaeth
That is patently false. Docsis 3.0 is backward compatible to previous versions. The only cable modems that need to be replaced are those of the high speed users. You bond their channels off the channels(on different channels than) used by the earlier Docsis versions. This gives the high speed users (presumably high capacity as well) a clear path and it drops them off the capacity load on the channels being used by the older Docsis versions (more bandwidth for the Docsis 2.0 users to share). Yes, only those users that have the Docsis 3.0 modems will be able to get the speeds above 30meg(I think that is the limit for 2.0). But most of the ISPs are claiming that only a small percentage of their users are soaking up the majority of the bandwidth. Presumably these(high capacity) user are usually the high speed users. Even if all the above was not true, every single piece of equipment you mentioned is cheaper today than it was a year ago and a year from now it will be even cheaper. So as time goes on the price/unit drops regardless. |
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Dogfather
Premium
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Laguna Hills, CA
1 edit | And given the prices that cable operators like Comcast charge for their pre-DOCSIS 3 tiers ($150/mo) I think they can afford to kick down a modem. |
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espaeth
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1 edit | reply to Dogfather
said by Dogfather :It's very easy for companies in dominant market positions like telco and cable operators to kill good ideas, that is why we have antitrust law. .. and despite heavy anti-competitive attempts by Sun, Intel, IBM, and Microsoft (among others) we are still seeing more and more Linux servers being used in enterprise environments. You can't kill good ideas.
said by Dogfather :2. Charge monthly fees or PPV fees (eg Microsoft, Apple, Netflix, Amazon). That fee covers their content cost and their end of the distribution costs.
Again, you keep implying that your HSI usage should be able to drastically increase without there being some impact to price. It costs money to build capacity -- if you are going to be consuming a greater amount of data requiring the buildout of additional capacity, that money needs to come from somewhere. The cost model that current HSI pricing is based on will not be valid if the push for higher consumption continues. |
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espaeth
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| reply to Lazlow
said by Lazlow :"You want to upgrade to DOCSIS 3.0, you need to swap out every single cable modem on the plant to get the true full benefit." espaeth That is patently false. Docsis 3.0 is backward compatible to previous versions. The only cable modems that need to be replaced are those of the high speed users. My statement is still accurate. Even if you build out DOCSIS 3.0 in 4 channel clusters and balance all of the existing D1.1/2.0 users across those channels, it is still easy to saturate a single channel of the bundle if your heavy users end up on the same channel.
Take a situation where 5 users with 8mbps downstream connections all try to max out their downstream capacity. On D1.1/2.0 platforms with single channel attachment, if they all land on the same channel they will exceed the 38mbps channel capacity and congestion will result.
The full benefit of D3.0 would be if those users all had access to the 152mbps (38x4) shared bandwidth pool. In that case it would be 40mbps out of a total channel capacity of 152mbps so there would be plenty of headroom left over.
There are definitely gains to be had just by adding the additional downstream channels, but the real full benefit doesn't come until a significant portion of your user base has converted.
said by Lazlow :But most of the ISPs are claiming that only a small percentage of their users are soaking up the majority of the bandwidth. Presumably these(high capacity) user are usually the high speed users. Not necessarily. I illustrated my point above with just (5) 8mbps users on a segment. Look at all the people in the forums talking about running P2P on the entry-level cable tiers.
said by Lazlow :Even if all the above was not true, every single piece of equipment you mentioned is cheaper today than it was a year ago and a year from now it will be even cheaper. So as time goes on the price/unit drops regardless. DOCSIS 3.0 modems are significantly more expensive than DOCSIS 2.0 modems. They have multiple radio tuners which adds costs to the manufacturing. The DOCSIS 2.0 stuff will continue to decline in price as demand diminishes.
The problem is that upgrades at the edge generally aren't about simply adding more, it's about forklift upgrades. DOCSIS 3.0 at the head-end required the complete replacement of DOCSIS 2.0 CMTS hardware with D3.0. To tap in the the capacity at the home you need a new modem. Growth at the edge is a matter of replacement, not expansion. |
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Dogfather
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1 edit | reply to espaeth
quote:
.. and despite heavy anti-competitive attempts by Sun, Intel, IBM, and Microsoft (among others) we are still seeing more and more Linux servers being used in enterprise environments. You can't kill good ideas.[/quote
Only because Microsoft was kept in check by the government...lest you forget Microsoft was sued by Sun over anticompetitive conduct.
quote:
That fee covers their content cost and their end of the distribution costs.
Again, you keep implying that your HSI usage should be able to drastically increase without there being some impact to price. It costs money to build capacity -- if you are going to be consuming a greater amounts of data requiring the buildout of additional capacity, that money needs to come from somewhere. The cost model that current HSI pricing is based on will not be valid if the push for higher consumption continues.
Yeah, that fee covers their distribution costs and the customers fee to the ISP covers the delivery and capacity expansion costs and proved by Verizon's $21 B customer funded expansion (all without caps and overage fees BTW).
If Verizon can manage a $21B fiber deployment project without resorting to caps and overage fees, so can Comcrap and AT&T. |
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espaeth
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| reply to Dogfather
said by Dogfather :And given the prices that cable operators like Comcast charge for their pre-DOCSIS 3 tiers ($150/mo) I think they can afford to kick down a modem. The entry price for pre-DOCSIS 3 service for Comcast is $62.95/mo for the 22/5 tier. (the obvious qualification is that your area needs to be upgraded to get that) |
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espaeth
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| reply to Dogfather
said by Dogfather :Yeah, that fee covers their distribution costs and the customers fee to the ISP covers the delivery and capacity expansion costs and proved by Verizon's $21 B customer funded expansion (all without caps and overage fees BTW). Verizon is currently carrying the debt of building out that network as a long term investment. Let's see how Verizon starts running things when they have to start getting serious about repaying that debt. |
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Lazlow
join:2006-08-07
Saint Louis, MO
| reply to espaeth
On the Docsis channel thing: IF they would stop advancing speeds for a while and increase load capacity (until they upgrade the system to handle the load) it will be a non issue. I am assuming that you did not intend to share the same channels between Docsis 3 and pre-Docis3 in your example(that would essentially defeat the purpose). Getting those high capacity users over to Docis 3 modems would (of course) be a priority. Getting those users off the pre-3.0 channels should open a significant enough amount of bandwidth to handle the next year or two(?). The higher end users will be motivated to switch over to 3.0 modems so that they see less congestion (self curing problem). The rest will probably see an improvement over the situation that they are in today and will slowly migrate over to the 3.0 modems (probably about the time 8 channel is coming in).
You cannot compare the prices of Docsis 2.0 modems to 3.0 modems. You need to compare apples to apples. What was the price of a 3.0 modem a year ago (still prototype?) and what is it today? Compare the price of a D3 cmts today and a D2 cmts when it was introduced. While I do not know for certain I am willing to bet that the price for the D3 CMTS in real dollars is significantly less than(but possibly the same due to the increased number of transmitters/tuners) the D2 units. |
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a333
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| reply to espaeth
said by espaeth :While the world mourns that users in Canada have their P2P transfers slowed down, I'm sure the other people who can actually make VoIP phone calls, play online games, and remote desktop into work without facing application-breaking latency are better off. Uh-huh.....that like....totally explains the fact that Bell Pathetico opened up their OWN online video store barely weeks after starting wholesale throttling...yep. I see.
Doesn't take a PhD in network engineering to realize that this is just Bell's way of sabotaging it's competitors. Yep that's right...when you can't beat them, sabotage them... |
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