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Verizon: We Can't Become Dumb Pipes
- frandroid 10y ago> Carriers’ fear of commoditization is alive and bad; how else to explain Verizon’s necrophiliac acquisitions of AOL and now Yahoo? Sentence of the week.
- johansch 10y ago"This cannot end well." The death of Verizon would be a good thing though, no?
- roymurdock 10y agoDepends. On the one hand we would have even less competition in an already-oligopolistic market. On the other, it would possibly give a new entrant a shot to rebuild a company with better culture, more innovation, focus on product rather than profit (at least in the short run).
- digi_owl 10y agoI dunno. Seems to me that USA has a problem of too many technologies. Best i can tell, one reason Verizon has the position it has, is that its main network is CMDA2k based, smack dab in the butter zone of mobile frequencies. This means that they have massive coverage, and customers can't easily up and switch carriers like they can with GSM lineage tech. One reason the iPhone "exploded" was that it was a GSM phone, thus all you needed was a firmware hack (jailbreak) to operate it outside of USA. Had it initially been a CDMA2k phone, it would have not gotten the gray market attention as it would have been completely inoperable in Europe etc.
- tshtf 10y agoVerizon's main network _was_ CDMA2000 based. Now over 90% of traffic is over LTE and CMDA2000 will be sunset in a couple of years: https://www.telegeography.com/products/commsupdate/articles/2016/07/15/verizon-to-shut-down-2g-cdma2000-1x-network-by-end-2019/ https://www.telegeography.com/products/commsupdate/articles/...
- taylorwc 10y agoThis is actually a tough question to answer. In the long run, the death of carriers/MSO's in their current structure would likely be a good thing to the end consumer. In the near-term, it would be a very bad thing. Verizon has the best geographic coverage in the US and a more performant network infrastructure (on the whole) than its competitors. The thing that's easy to forget about carriers is how amazingly capital-intense it is to build a new one.
- johansch 10y agoIt's not like the infrastructure would physically cease to exist if they went bankrupt.
- taylorwc 10y agoNo, but it would likely be purchased by a competing carrier or MSO that functions in an identical fashion.
- JustSomeNobody 10y agoMore likely a private equity firm.
- terravion 10y agoIt would be great if there was a major telco that was excited about being dumb pipe and just crushing the others. That seems to be what Google Fiber is an attempt at creating but the capital required is so great that only a hundred year old company like Verizon or AT&T is really in a position to execute on that well.
- Someone1234 10y agoNot to mention that existing companies get tons of "free money." Every time the government talks about rolling out broadband to poorer neighborhoods they just shove more cash at AT&T/Verizon/CenturyLink/etc, who are then meant to run the wires and profit off of the new customers. This is likely partly the result of strong lobbying at both state and national levels. But regardless of the reason, all this money could have been used for "dumb pipes" which are non-profit, or only profit enough to expand further. That's what bugs me, not that the government uses money for broadband expansion, but that they just give it to for-profit companies to use as they please, and to make a profit.
- deleted 10y ago[deleted]
- distances 10y agoHope for mandatory and price controlled telco line sharing. I don't really see other way realistically achieving this.
- zeveb 10y agoI think the problem is that the return on investment isn't there: one ends up laying out a tremendous amount of capital, but not making much profit in return. That's not a fun game to be in. You gotta be subsidised by something else (ads in the case of Google, violence in the case of municipal broadband).
- Retric 10y agoLeverage can boost returns, with current interest rates Broadband is risky but very profitable.
- EA 10y agoI read the title and couldn't help but think about pipes.yahoo.com after VZW's recent acquisition.
- maxerickson 10y agoThose were smart pipes though.
- _superposition_ 10y ago"...The Minitel business model was a thing of beauty, a well-tended garden that didn’t admit outsiders. In this world, the Internet was the unwashed enemy... To paraphrase one of my past collaborators, the Minitel did less, but it cost more" Replace Minitel with iPhone and call me in 10 years.
- digi_owl 10y agoMinitel, AOL, same diff?
- bertiewhykovich 10y agoI don't think this is a fair comparison. From the perspective of most consumers, the iPhone does just as much as its competitors. (This is even true for me, an engineer: I neither need nor want my smartphone to be a generic computing device.) The iPhone certainly costs more than its competitors (even, perhaps, its technically superior competitors), but it's a mistake to think that this cost isn't purchasing value. An iPhone customer is buying the ease of use and universal compatibility of the iPhone -- and I invite anyone who thinks that this is overvalued to contemplate the phrase "Linux on the desktop." (Thinking about Linux also highlights a basic principle of the technical market that techie types often miss: "power" tends to inversely correlate with ease of use, and the majority of people would much rather have their device work than have their device be receptive to hacking that they'll never even contemplate.) The purchase of an iPhone is also a very explicit investment in social capital. Sneer all you want at status symbols -- they're an effective form of social currency, and dismissing them is highly irrational.
- digi_owl 10y agoHere we go again, claiming that the reason Linux is not on the consumer desktop is technical. Nope, it is squarely economical (and quite a bit political). when the OEM contract with Microsoft makes it expensive to do non-Windows PCs, the OEM opts not to. Ever since KDE 2.x Linux has been just as good as Windows from a technical standpoint (and likely easier to fix once the inevitable error comes up, as there are few to none opaque binaries involved). Ease of use is a smokescreen, as there is no "tabula rasa" users running around any longer.
- loupereira 10y agoTelecom companies should be regulated like electric and gas utilities
- harryh 10y agoIf we did that then we'd all still be stuck with DSL. Electric and gas utilities aren't expected to drastically improve performance year over year, but we want that from our telecom providers.
- bluedino 10y agoThere's no need for gas/electricity to drastically improve year over year. But when there is a need, as there is with electric cars, the government steps in and offers tax credits and covers the installation fees for things like home car chargers.
- deleted 10y ago[deleted]
- digi_owl 10y agoHow about municipal fiber runs? Stuff it into the ground, and then offer any service provider access.
- harryh 10y agoBecause city governments are really great at investing appropriately in infrastructure! https://en.wikipedia.org/wiki/Flint_water_crisis https://en.wikipedia.org/wiki/Flint_water_crisis
- revelation 10y agoNobody wants to be a dumb pipe, yet most of the value creation in the world is based on utter commodities. Dumb businesses are the very norm.
- neolefty 10y agoData / examples?
- dredmorbius 10y agoInfrastructure, particularly transportation and communications. Ports, navigational aids (from lighthouses and buoys to GPS), railroads, telegraph, transoceanic cables, rural electric and telephone service, highways and interstates, airports, air traffic systems, standardisation of parts, measurements, communications, frequencies, procedures, accident and incident investigation. We devalue commodities because their price is low, but the value if often quite high. I'd knocked an argument against supplying California agriculture with water in favour of municipal use, in part on the basis that ag prices are depressed in a highly distortionary fashion. But if you want the real winners, look at coal, oil, and gas, which are underpriced by factors of hundreds, thousands, or millions, and which make the modern world possible. The end of that gravy train will be painful.
- TeMPOraL 10y ago> standardisation of parts, measurements This is what probably single-handedly enabled technological civilization. The original walled gardens, craftsmen making each according to their ideas and workshop setup, were putting a cap on complexity and reliability of things. Without standardization and commoditizing, there's no way for one to specialize on providing parts for the solution.
- dredmorbius 10y agoNecessary but not sufficient
- pmarreck 10y agoTech trivia: This was written by the inimitable industry veteran Jean-Louis Gassée, former top exec at Apple, founder of BeOS, chairman of PalmSource. Some of his attributed quotes are real gems: https://en.wikiquote.org/wiki/Jean-Louis_Gass%C3%A9e https://en.wikiquote.org/wiki/Jean-Louis_Gass%C3%A9e I would love to have some wine with this guy and talk tech!
- jcoffland 10y agoThe end of the article goes into a discussion about acquisitions but misses an important point. The reason Warren Buffett makes good acquisitions is because he owns the company so he only benefits if the acquisition works whereas CEOs and the board of directors make money either way. Execs are motivated to make the largest value acquisitions because they personally make money on them not because it's good for the company. This situation has been gutting our largest corporations for decades.
- mrweasel 10y agoI never hear anyone from the ISP side explain why being a "dumb pipe" would be such a bad thing, other than "they wouldn't be making enough money". For the outside it would seem that the ISP are wasting money coming in from the "pipe" business on the media side of things. It seems like it would be a simpler business to be in, rather than trying to be a media company.
- usefulcat 10y agoProbably it's because internet service is a commodity, and commodities tend to compete primarily on price. Also, consider the context: these are companies that are accustomed to not having a lot of direction competition.
- shanacarp 10y agocommodities can be graded. See, for example, crude. Brent black sweet is considered the black gold standard, but you can get other kinds of crude, and you adjust from there
- ju-st 10y agoA classic from 1997: http://www.isen.com/stupid.html http://www.isen.com/stupid.html [original release May 1997, by David S. Isenberg of AT&T Labs Research that explains several dumb network concepts]
- Cshelton 10y agoThe future of Telco is not in the ground, but through the air. This is the entire reason Google Fiber acquired WebPass. It is relatively simple to transmit extremely high connection speeds through radio waves. I have a receiver on the top of my house that is a point to point signal, pumping 1 gig +, and soon to be much higher, speeds. Google's strategy to expand GF will not longer include a massive ground infrastructure move, but use point to point to get to the neighborhoods. An entire zip code can be offered GF services at a fraction of the cost and a few months of labor. Google, along with many other broadband startups will hit the big telco's very hard. I'm not even sure if they see it coming yet. I'd imagine they would, but after dealing with AT&T for the last two months on something, I'm not very confident in there being any single person in the entire organization who has a clue about what they are doing.
- jo_ 10y agoI'm a current WebPass subscriber and I'm dreading the move to another ISP when I change apartments. May I inquire what it takes to set up and maintain the transmitter?
- stanleydrew 10y agoI believe the transmitters are pretty expensive. In the $10,000 range, depending on the frequency and power required. So there's cost if you want to own one. Plus you need to convince someone (Webpass I guess?) to point one of theirs at you to complete the link. It's probably easiest to convince the owner of your new apartment to pay Webpass's setup fee, where they own the equipment and wire the building. Although having tried that a couple of times, it's a pain in the ass. Perhaps because of this: https://backchannel.com/the-new-payola-deals-landlords-cut-with-internet-providers-cf60200aa9e9?gi=4fc104cccbaa https://backchannel.com/the-new-payola-deals-landlords-cut-w...
- Cshelton 10y agoThe receivers themselves for a consumer you can get for < ~$1,000 for one that will be able to handle a couple of hundred Mbps easy. Getting someone else to point directly at you would cost a lot. Or doing both ends yourself. The business model for ie. WebPass is not to point to every customer, but to point to one point in say a neighborhood and then run cables from that to every house in the neighborhood. Which is a fraction of the cost of running cables all over cities. At Least, that will be the business model under Google Fiber.
- bcheung 10y agoIt's not so much that they can't, it's that they don't want to and it would be unwise from a strategic standpoint. Being an ISP is a commodity business and has really low profit margins. Ironically though, people still have so few choices.
- fpgaminer 10y agoISPs have royally screwed over my company. When we moved into our office a few years ago the only option for Internet was a local phone company. They charged us $500 per month for 2mb/2mb, forced us into a two year contract, and of course bundled that service with the usual unreliability and crap customer support. I couldn't believe it. Eventually after the contract expired and much searching and begging we had a glimmer of hope. TimeWarner offered to drop fiber to us for something like $300 a month, 100/100. Couple months later they bailed out. AT&T later stepped up and actually went through and dropped the fiber, still 100/100, but at $1500 per month. So yup, we're paying almost a full-time, minimum wage employee's salary just for 100/100. I get 100/20 at home for $50. I cannot think of the words to express how I feel about this...
- nameless912 10y ago"Business class" translates roughly to "fuck you money for shitty internet".
- developer2 10y agoI check for my preferred ISP before I even consider moving to a new location - and that's for my personal residence. It blows my mind that anyone would install themselves in an office without first evaluating internet connectivity. Where in a first world urban environment does anyone, whether individual or business, only have access to 2 Mbps? That speed is absolutely unusable. I couldn't operate a two-employee company on that. 100 Mbps for $1500? You should be seeing gigabit fibre for that price!
- thirdsun 10y agoWhy would your company move to a new office without checking the available internet options first? This seems incredibly careless. Fast internet and limitless bandwidth isn't everywhere and that's not exactly a secret.
- pixl97 10y agoBecause the Telco/Cableco lies to you. If you move to a location that doesn't have service already the answer you receive from the provider is near useless. They will tell you they are able to service the location, doesn't matter if they can or not.
- chinathrow 10y agoI am on fiber, my ISP is actually the dumb pipe and they love being it. I chose them for this very reason - a business ISP turning B2C as soon as fiber got rolled out where I live. Unfiltered, unmetered symmetric 1 Gbps. I need an ISP who does not touch the dumb pipe.
- Meegul 10y agoAs my dad would always say: "Can't, or won't?"
- deleted 10y ago[deleted]
- Fej 10y agoDear Verizon - Yes, yes you can. Love, The Internet P.S. It would be cool if you stopped tracking us, while you're at it.
- adventureartist 10y ago>Does he really believe he can sell formerly unsuccessful Yahoo services to Verizon subscribers?< This article misses the point: This is about selling Verizon subscribers through Yahoo/AOL services.
- leoh 10y agoTwo words: rent extraction
- iamleppert 10y agoHas Verizon actually had any happy content customers? Every time a carrier tries to go into content creation they try to do it on the cheap and force their monolithic soul-sucking corporate culture onto creative types and it never has worked. People don't want to work for Verizon, or Comcast, or other such companies. They treat their employees like dirt, and are generally unconcerned with user experience, doing things the right way, and view customer service as a cost center. All of their products have been developed in a centrifuge of "just good enough" with an eye toward minimizing effort and maximizing profits. Its entirely a cultural thing set by the leadership of these companies and will not change until there is a fundamental (albeit unlikely) shift in leadership at the top.
- shanacarp 10y agoit is a brave new world for them....but...they acknowledge their problems....unlike many carriers
- rdtsc 10y ago> had any happy content customers? Not me. They got us a FIOS deal when we got our house. I used them for 2 years. Super fiber speed, except they would throttle youtube. So here I was paying to this supposedly superior quality and speed and getting throttled by them. So I dropped them and switched to a plain old cable provider (just for internet, we don't really watch tv anymore). Cut my costs more than half. On paper the speed is lower, however, the latency and lack of throttling for things like Youtube and other media is better. Now since Verizon installed their equipment on our premises, they keep coming back every few months, in person -- as in they have someone drive out to our door, begging us to come back. They even offered to match the price we pay for cable currently (but it is always some stupid 2 year contract thing, that I know will go throught the roof when the time is passed).
- ec109685 10y agoDo you have cites for throttling YouTube? That seems entirely terrible for retaining users.
- deleted 10y ago[deleted]
- _greim_ 10y agoOkay, so let other people be dumb pipes by not lobbying against municipal broadband everywhere.
- spdionis 10y agoMeanwhile in the poorest country of Europe I have 100/100 mbps speed for 8$, and not a much worse 4G connection with a 5 gb limit for anothef 8$. America...
- ex3ndr 10y agoSo, how to sell to Verizon better software and better services to help them build nice services and not enterprisish crap?
- pkaye 10y agoSpeaking of minitel and walled gardens isn't that what Apple is doing with their app store.
- dkarapetyan 10y agoArticle ends with "This can not end well". I'll do one better: It will not end well.
- deathanatos 10y ago> We don’t need your Internet. There is no way we can make money on it. We don’t want to be just dumb pipes! Is the whole argument (from the telecoms) here that they can't differentiate the service as dumb pipes? Like offering decent speeds (1 Gbps … please? Heck, even 100 Mbps for not an insane price), decent service (customer support that knows what "ping" or "latency" means? Not requiring weeks of back-and-forth with customer support to debug issues?), IPv6 support[1], a router that routes corner cases[2], optionally paying for a static IPv4 address[3], being able to reverse DNS my IP to a name of my choosing, no "no servers" BS in the agreement, not MitM'ing data[4], not selling my data[5]? Some of this is perhaps them not being dumb pipes: I could purchase my own modem; the "no servers" and MitM'ing are directly not being a dumb pipe. [1]: I finally have this as a Comcast customer. My parents (also Comcast) are still waiting. [2]: My router fails at correctly routing packets bound for its public IP if they originate inside the private LAN and are bound for a destination under port forwarding. Comcast considers a router not exhibiting this bug a "feature" called "NAT loopback" … which they don't support.) [3]: my understanding is that Comcast does not offer this to residential; they do to business class, but this hampers people like me that love experimenting, but aren't businesses. [4]: Most ISPs intercept at least DNS queries and respond with forged results (to serve ads); this can cause software to fail with error codes different from the actual problem (because the ads mask the underlying issue). [5]: http://www.huffingtonpost.com/2013/07/08/att-selling-data_n_3561263.html http://www.huffingtonpost.com/2013/07/08/att-selling-data_n_...
- superuser2 10y agoIntercepting DNS queries would be news. Generally they just push their own DNS servers via DHCP, and it's up to you to override them with ones that don't serve as portals in place of NXDOMAIN.
- deathanatos 10y agoAh, okay; I suppose that's a fair characterization of it. (I do now override their DNS settings, and I don't think I've seen one since I've done so.) I still find the ISP one questionable, though I suppose there is a difference between running your own (as the default that most people will not know how to opt out of) and outright intercepting.
- nameless912 10y agoAs someone who works for a company that is (partially) an ISP: we want nothing more than to be a dumb pipe. Traffic shaping and dynamic content acceleration are hard as hell, they barely work, and 90% of us engineers would rather not do them if we didn't have to. But the edict from on high says "optimize bandwidth for content!" and "Buzzword buzzword buzzword profits!" and the technical staff suffers.
- hooph00p 10y ago...tell me more.
- nameless912 10y agoTruthfully there's not much more I can tell you without getting into proprietary infos, but here's what I can say: because of "value-added content delivery" or something, we have to work harder. And it's kind of a giant clusterfuck most of the time.
- TeMPOraL 10y ago"Value-added", modifier noun, meaning "something utterly useless and often harmful to the customer that adds value for company by fucking said customer over".
- somenomadicguy 10y agoDoes anybody remember the fabulous disaster which was the excite@home merger? Same thing, different decade.
- known 10y agoCopy/Compete; Otherwise you can't survive :)
- spacemanmatt 10y agoVerizon: We can't provide what customers want.
- amelius 10y agoIn all fairness, you can't blame a company for not wanting to become a commodity producer. Being a dumb pipe is a race to the bottom, no matter how well you perform. I'd say we have to blame the system instead.
- k__ 10y agoSure, but "become"? I already see all internet providers exactly as this. Sure, they try to sell me "more than just internet" and I get calls regularly, but the only good stuff they offer are their "pipes".
- rocqua 10y agoToo bad, because I just want a dump pipes service. I'll pay a premium for well maintained and up to date pipes. But I don't want anything else.
- pmontra 10y agoThis is more or less what the CEO of the mobile operator I was working for told me, circa 2002. Obviously they are almost only a dump pipe now because it's very difficult to compete alone against all the world of content providers. By the way somebody made it, starting from the device and not from the network. Look at this: > You, the entrepreneur, provide a Minitel service: e-commerce, banking, entertainment. The French phone monopoly does the billing and collecting for you by adding a few items to the end of François Dupont’s monthly phone bill. For this service, France Telecom takes a 25% vig. s/Minitel service/app/ s/French phone monopoly/Apple and others/ s/25%/30%/ Best bets about who's going to snatch those money from them in the same way they eventually snatched them from France Telecom?
- Kurtz79 10y agoWell, they are halfway there. Jokes aside, in this day and age it's not hard to consider "bandwidth" as a commodity similar to water or electricity, why a company supplying it should be different from an utility company ? Provide a "dumb pipe" service that is convenient and reliable, and customers maybe will consider adding "smart" services on top of it.
- aggieben 10y agoI would pay a hefty premium for a well-done dumb pipe.