North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical RE: An Attempt at Economically Rational Pricing: Time Warner Trial
there are already companies like Vyatta that represent the nascent part of this space, at least on the software/equipment side. > -----Original Message----- > From: [email protected] [mailto:[email protected]] On > Behalf Of [email protected] > Sent: Friday, January 18, 2008 1:17 PM > To: [email protected] > Subject: RE: An Attempt at Economically Rational Pricing: > Time Warner Trial > > > > The problem in the ISP industry isn't lack of usage based pricing. > > It's that the going rate for basic connectivity was driven > below that > > which is economically sustainable by the ILECs when they engaged in > > predatory pricing to drive the CLECs out of business in the > late 90s. > > Now that they own the market, they find that, having driven > the prices > > down, they can't raise them, so they are engaging in various > > subterfuges that are designed to cover up the basic thing they are > > doing: > > trying to charge more for the exact same service. > > Sooner or later, somebody is going to try to apply Google's > approach to hardware in a network backbone. Imagine a network > backbone with no Cisco or Juniper boxes in it, just lots of > commodity boxes with triple-redundancy everywhere (quintuple > in NFL cities). > > Vadim Antonov tried to build something like this into a > backbone router, but the market for IP backbone equipment is > so incredibly conservative, and the pricing was up there with > the big boys, so he never had a chance at it. > > I don't know if Google is doing something like this between > their data centers, but I think that the fundamental price of > fiber is low enough that with commodity router/switches and > triple the fiber miles, we can have a reliable IP packet > moving service without jacking prices up. > > Even if prices do go up, it will be a short term thing > because sooner or later, Google, or somebody who thinks as > bold as they do, will build a true commodity packet-moving > service, and the telecoms industry will fall back into the > razor-thin margin utility sector where it belongs. > > I'm sure many of you will think I am crazy because you know > just how much those high-speed ports cost and you can't see > any letup in bandwidth growth. But the fact is that ports are > not the fundamental components of routers. Chips are, and as > we all know, chips keep getting smaller, cheaper, faster and > more powerful. FPGAs, SOCs, multicore CPUs and so on. The > company that cracks the Internet utility problem might even > design and build their own devices rather than outsourcing > that, at a high price, to the benevolent vendors. > > --Michael Dillon >
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