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youtube didn't happen after Comcast built high speed internet. Customers demanded better internet and paid more for it, to access youtube, pandora, facetime, f

youtube didn't happen after Comcast built high speed internet. Customers demanded better internet and paid more for it, to access youtube, pandora, facetime, facebook, twitter, flicker, netflix and MMOGs. Comcast invested in faster CO side equipment because there was customer demand for faster internet. The coaxial cable was still the same, customer still paid for modem in the house and paid for upgrade to DOCSIS 3.0 modems. Investments here by Comcast are same as any internet giant invests in a data center equipment, there was no new digging of last mile by Comcast, it was same as what it had been for last 25 years, laying coaxial cable when homes get built. And Comcast did charge more for faster speeds. Customers paid for faster access to the web. Just like content providers upgrade from Pentium to i7 on servers, Comcast upgrades were cost of doing business and it did pass that cost to customers in terms of more money charged for higher speeds. >All content providers are in the business of creating bits which must be carried across space, and there are some kinds of content where local offers a big advantage. Many of these are yet to be discovered, as local circuit quality has been fairly poor since the origin of the internet. Net neutrality makes it far less likely that any of these will be explored. CDNs are working just fine on existing internet. Google or Netflix or Amazon moving content closer is not prohibited by concept of Net Neutrality. The request to the local/geo-graphically server originates from the site/app html-js-DNS/code based on geo-location of the end user. This is only limited by Comcast CDN build out and offering made available for sale. Comcast doesn't want to do that, they want to peek inside packets and be arbitrator of what happens based on contents of the packet, regardless of what the browser or server wanted the packet to do. Comcast being allowed to do deep packet inspection is like opening up letters going to bank to see if it is for car payments and then delaying the envelop if bank doesn't pay the postal services extra fees. It doesn't matter if the customer selected overnight delivery, as long as bank doesn't pay postal service, checks don't arrive on time. I firmly believe that people think of their ISP bill as something they pay for youtube, gmail, maps, photos, amazon, pandora, school/college/work websites. It is ISPs who should be thankful to content owners for making their product offering something that customers want. The canvas company wants to be able to charge more if a successful painting gets painted on it, after it has already sold the canvas, would that be OK? The individual user at home bought certain amount of data transfer per second, and may be agreed to upper limit on total data transferred per month, the content provider paid their ISP bill to do the same e.g. Amazon AWS data transfer rates. Now, the individual's ISP like Comcast wants to hold their users hostage and seek additional payout from content providers for doing the things that they already took payments from their customers. CDNs are different and fair. CDNs are micro sized data centers spread across the land that content owners can lease space/power/cooling/compute/storage/network from. Net neutrality opponents want people to get confused about CDNs and deep packet inspection. CDN does not require deep packet inspection. Comcast wants you to think that this is unsolved problem that they can solve if only people allow them to look inside their mail and read contents. No, thank you. Can you imagine if gasoline companies asked for paybacks from car companies? Why can you imagine if tcp/ip companies ask for payback from online video companies? You buy gasoline and you can use it as you wish, in a Ford, Toyota or a Craftsman lawn mower. You buy tcp/ip and UDP capacity and you use it as you wish on youtube, netflix or yahoo mail. Can you imagine if same gasoline slowed itself down if it figured out that it was being used in a Hyundai and offered 91 octane if found to be used in a BMW? Costing you the same at the pump, but works differently by figuring out where it is being used, a Hyundai vs a BMW? Does the gas company has right to know which car I will be using the gas into? Can it reduce the value its product has to the purchaser, the person pumping gas, unless the car manufacturer pays it to unlock the full potential of the gas? One can't do it with gasoline but can do few things with tcp/ip packets. Just because it is possible to open up an envelope mailed to the bank and hold bank hostage for additional postage, doesn't mean postal service should open up the mail. Just because it is possible to open up tcp/ip packet and see if it is headed for youtube vs vimeo, doesn't mean ISP should do it. It is not ethical, it is not legal. Find the shortest path to the destination and forward it on, post or packet. Youtube Red is available for $9. Ad-supported Youtube itself is free. Comcast charges $70 for 100 Mbps connection. $40 for VOIP phone. Average Comcast bill is $120 a month. Comcast has a goose that lays a golden egg every day, they are out to slice it open for reasons beyond me. Comcast share holders should take company executives at task for risking their investment over opposition to net neutrality. Ask Comcast to cut costs. They are throwing dirt in your eyes over "boogeyman of Net Neutrality keeping the stock from soaring" while throwing money to the wind. Comcast should reduce costs and make itself more profitable. Comcast should introduce innovative products that customers want and will pay for like its VOIP and home security product line. A more fine grained CDN deployment would be great product idea. Comcast engaging in political debate bating against its own customers wishes will only empower activism against the company. The Comcast executives are burning the brand value in a bonfire right in front of the share holders, such destruction of share holder value shouldn't be tolerated. If Television sets manufacturers created "Information Service" that plays short funny video clips instead of ads by deep inspection of HDMI signal, or a centralize service tracking ad start-stop times publishing it over internet, would that be OK Comcast? You are jealous of google and facebook's ad revenue. What if Samsung decides to cut in on your ad revenue on MSNBC? Samsung TVs won't show ads on MSNBC because they don't pay Samsung, it plays CNN ads just fine because Time Warner paid the ransom to Samsung.

grandalf 9y ago
You are arguing both that Comcast invested heavily in infrastructure to support demand for increased bandwidth, and also that Comcast's investors are getting way above market returns on that investment given the amount of risk that existed at the time it was made. http://www.nytimes.com/2003/03/17/business/betting-speed-pure-simple-broadband-comcast-lets-users-find-their-own-flourishes.html http://www.nytimes.com/2003/03/17/business/betting-speed-pur... Comcast made a big bet in 2003 that many other companies did not make. Demand for broadband has been strong, but it was far from a given at the time Comcast made the investment that it would result in strong returns well into 2017. It's easy to look back with full knowledge of how things played out and determine that Comcast was unsophisticated in its financial and business planning. Comcast has grown because it has provided a "neutral enough" internet for its customers. There is absolutely no reason to believe it would begin to act differently now. If anything, Comcast's strong profit margins increase the chances that other companies will enter into competition for the business. I'd rather have Google invest money and brainpower into creating things like Webm than to pay lawyers and PR specialists to promote net neutrality. The sorts of packet inspection techniques you describe can be thwarted by encryption, and are no different than what is being done within Google to monetize user behavior/preferences to the nth degree. You argue that Comcast wants to charge content providers for preferred access. I'm sure they'd like to, but this is the case for financial, not technical reasons: The following is the most important point: Once a service (like Youtube) becomes popular enough, the traffic pattern of packets going to that service begin to resemble the traffic pattern of the internet itself, making arbitrage impossible. So the economics that once worked for ISPs to arbitrage based on upstream vs downstream bandwidth no longer work because upstream circuits are largely priced based on broad data access patterns which are heavily influenced by major content providers. So the profit margin on residential bandwidth starts to approach $0 as 100% of the content consumption matches the exact characteristics of the upstream provider's pricing model, since upstream providers also do arbitrage, but with much less aggressive hedges and less leverage. Consider it this way, you can start a competitor to the post office that is cheaper for some small list of addresses. Maybe you could profitably deliver all first class mail for 25 cents within a single zip code. But if you try to offer a similar service to all zip codes, you will likely face nearly identical constraints to the post office and you will not be able to undercut prices. For ISPs, the more predictable customer demand gets, the more likely the arbitrage has already been done upstream, and the closer the residential circuit becomes to a dedicated circuit. These days, suppose 90% of internet users follow a sine wave data usage pattern day after day that is divided between Netflix, Youtube, and a handful of other hosts. Video is massively more bandwidth intensive than other stuff so video content providers dominate. This means a lot less profit from bandwidth price arbitrage, which is why ISPs are toying with the idea of charging content providers for access (it's also a bit silly because the moment youtube goes down people would call in saying their cable modem was broken). I don't think it's a bad thing for Google to help pay for the ISP's upstream bandwidth costs, since whatever contracts the ISP buys are largely serving the purpose of piping content from Google to consumers. It may or may not be extortion for Comcast to try to do this, but that should be up to regulators to decide after the fact. If this happened, by the way, it would likely accelerate Google's slow-as-molasses last mile effort and result in much more competition for residential ISPs. ISPs provide a very helpful non-google intermediary for the small bit of our internet behavior that is not being captured and stored by Google. I think it is better to have a variety of firms, each with its own core specialty, fighting over this market than for regulators to simply follow Google's advice and hamstring ISPs into lower profit margins. In an ideal world all internet connections would be unconstrained by QoS considerations. But if you think back to dated last mile tech like T1 lines, the financial arrangement is leasing the piece of copper wire and paying for a 24/7 circuit that can saturate that copper's bandwidth in both directions. For this reason, a T1 cost 10x the price of a residential connection supporting the same average bandwidth. If you are running a data center, this contract is important, you can't afford to deal with congestion and reduced bandwidth that is beyond your control. But for residential customers it is a desirable and worthwhile tradeoff that does not benefit from regulation whatsoever.

grandalf 9y ago

You are arguing both that Comcast invested heavily in infrastructure to support demand for increased bandwidth, and also that Comcast's investors are getting way above market returns on that investment given the amount of risk that existed at the time it was made. http://www.nytimes.com/2003/03/17/business/betting-speed-pure-simple-broadband-comcast-lets-users-find-their-own-flourishes.html http://www.nytimes.com/2003/03/17/business/betting-speed-pur... Comcast made a big bet in 2003 that many other companies did not make. Demand for broadband has been strong, but it was far from a given at the time Comcast made the investment that it would result in strong returns well into 2017. It's easy to look back with full knowledge of how things played out and determine that Comcast was unsophisticated in its financial and business planning. Comcast has grown because it has provided a "neutral enough" internet for its customers. There is absolutely no reason to believe it would begin to act differently now. If anything, Comcast's strong profit margins increase the chances that other companies will enter into competition for the business. I'd rather have Google invest money and brainpower into creating things like Webm than to pay lawyers and PR specialists to promote net neutrality. The sorts of packet inspection techniques you describe can be thwarted by encryption, and are no different than what is being done within Google to monetize user behavior/preferences to the nth degree. You argue that Comcast wants to charge content providers for preferred access. I'm sure they'd like to, but this is the case for financial, not technical reasons: The following is the most important point: Once a service (like Youtube) becomes popular enough, the traffic pattern of packets going to that service begin to resemble the traffic pattern of the internet itself, making arbitrage impossible. So the economics that once worked for ISPs to arbitrage based on upstream vs downstream bandwidth no longer work because upstream circuits are largely priced based on broad data access patterns which are heavily influenced by major content providers. So the profit margin on residential bandwidth starts to approach $0 as 100% of the content consumption matches the exact characteristics of the upstream provider's pricing model, since upstream providers also do arbitrage, but with much less aggressive hedges and less leverage. Consider it this way, you can start a competitor to the post office that is cheaper for some small list of addresses. Maybe you could profitably deliver all first class mail for 25 cents within a single zip code. But if you try to offer a similar service to all zip codes, you will likely face nearly identical constraints to the post office and you will not be able to undercut prices. For ISPs, the more predictable customer demand gets, the more likely the arbitrage has already been done upstream, and the closer the residential circuit becomes to a dedicated circuit. These days, suppose 90% of internet users follow a sine wave data usage pattern day after day that is divided between Netflix, Youtube, and a handful of other hosts. Video is massively more bandwidth intensive than other stuff so video content providers dominate. This means a lot less profit from bandwidth price arbitrage, which is why ISPs are toying with the idea of charging content providers for access (it's also a bit silly because the moment youtube goes down people would call in saying their cable modem was broken). I don't think it's a bad thing for Google to help pay for the ISP's upstream bandwidth costs, since whatever contracts the ISP buys are largely serving the purpose of piping content from Google to consumers. It may or may not be extortion for Comcast to try to do this, but that should be up to regulators to decide after the fact. If this happened, by the way, it would likely accelerate Google's slow-as-molasses last mile effort and result in much more competition for residential ISPs. ISPs provide a very helpful non-google intermediary for the small bit of our internet behavior that is not being captured and stored by Google. I think it is better to have a variety of firms, each with its own core specialty, fighting over this market than for regulators to simply follow Google's advice and hamstring ISPs into lower profit margins. In an ideal world all internet connections would be unconstrained by QoS considerations. But if you think back to dated last mile tech like T1 lines, the financial arrangement is leasing the piece of copper wire and paying for a 24/7 circuit that can saturate that copper's bandwidth in both directions. For this reason, a T1 cost 10x the price of a residential connection supporting the same average bandwidth. If you are running a data center, this contract is important, you can't afford to deal with congestion and reduced bandwidth that is beyond your control. But for residential customers it is a desirable and worthwhile tradeoff that does not benefit from regulation whatsoever.