6 ms·

I think it's a bit far fetched to describe the current situation as a cartel. First, what is the function of a cartel? It's to coordinate supply to keep price

by mattrp 8y ago

I think it's a bit far fetched to describe the current situation as a cartel. First, what is the function of a cartel? It's to coordinate supply to keep prices high. Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly. Second, the reason they are taking positions / building their own is that there isn't a business case to build these cables without them.

yummypaint 8y ago
The industry as a whole has been trying to do this by attacking net neutrality. Things like metered plans create artificial scarcity and allow companies to increase the price of switching packets.
- skybrian 8y ago
  That's in the retail market which is very different.
- samstave 8y ago
  Dude, the ping i get on my facebook atlantic cable is like 2ms between here and the .eu shard. What are you getting on that other link?! Ssure they spy on all my stuff but look at that ping!
  - wbl 8y ago
    2e-3s*3e8 m/s=6e5m. So no, you are not going to get 2ms transatlantic ping.
    - TheSpiceIsLife 8y ago
      Light travels something like 30% slower in fibre optic cable than vacuum. So would be more like 420 kilometres for 2ms.
      - ummonk 8y ago
        And that's round trip, so ~200 km away.
      - C1sc0cat 8y ago
        About .5c for both fibre and copper - from my memories on doing a CCNA a few years back.
- mattrp 8y ago
  You do raise an interesting point. For ex, I saw this elsewhere on HN: https://www.bloomberg.com/opinion/articles/2019-04-02/zuckerberg-op-ed-new-rules-would-hurt-everyone-but-facebook https://www.bloomberg.com/opinion/articles/2019-04-02/zucker...
kbenson 8y ago
> I think it's a bit far fetched to describe the current situation as a cartel. Well, they did specifically say it's not a cartel. Yet. I interpreted the article as an early warning to prevent them from becoming a cartel, as the author believes they have the capability to become one if they decide to. > First, what is the function of a cartel? It's to coordinate supply to keep prices high. No, it's to coordinate to keep profits high. Prices could fall, but less quickly than they would otherwise, and it could still be due to coordinated action. One example is if costs are falling quicker than prices, and prices drops are delayed or reduced. If consumers are hurt because they've altered the economics of the market to prevent competition, that would qualify for me. > Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly. Theoretically, they could make the market economics of new cables harder to justify, while keeping enhanced capability for themselves. Does affecting the world market to the degree that it would take a nation state to have enough money to change the status quo enough to allow competition in the data transit space count as anti-competitive? It may be that the term encompasses a lot more behavior when applied at that scale. Do the companies in question have enough resources and power to affect the global market in that way? I have no idea. It sounds crazy, but it feels like there's more consolidation of power in these companies (with regard to online content) than other industries have had in the past, and with an industry that's as large and lucrative as this, that seems to make them somewhat unique. The dark horse here might end up being China. If there was a cartel, China would have the capability and motive to bust it eventually. Of course, if the markets China wanted to reach were politically denied from specialized lobbying, that could counter them...
- mattrp 8y ago
  Even strong cartels like opec have to deal with “cheaters” - members who break the rules just a little bit to line their own pockets opportunistically. I’m not saying trust the content oligarchy but I do think there remain sufficient sources of independent providers and the strong likelihood that there will always be someone willing to sell off some capacity that the scenario above is unlikely... probably. Ask me tomorrow and I’ll probably agree with you more!
  - 8y ago
tgsovlerkhgsel 8y ago
The article addresses it towards the bottom > Don’t worry though — we are nowhere near such a scenario. Yet.
- andromeduck 8y ago
  What a vacuous statement.
UweSchmidt 8y ago
If there is no business case to build something that is essentially infrastructure, then it is likely a natural monopoly and must be regulated. https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly
- throwaway_9168 8y ago
  Even then, you could have regulatory capture. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture Speaking of regulatory capture, I think that's really what happened and why Facebook has been able to get away with, actually, murder (e.g. Facebook's free internet had a big role in the murderous riots in Myanmar [1] and WhatsApp had a big role to play in mob lynchings [2], [3]). Not to forget the slap on the wrist they have gotten for what is basically child abuse in the "friendly fraud" case [4]. But not to worry, there is another dopamine hit coming up next minute to a mobile phone near you so you can pretend you never read this comment. In my view, it is best not to let these tech giants anywhere near these kind of ventures. [1] https://in.reuters.com/article/myanmar-rohingya-facebook/u-n-investigators-cite-facebook-role-in-myanmar-crisis-idINKCN1GO2Q5 https://in.reuters.com/article/myanmar-rohingya-facebook/u-n... [2] https://www.bbc.com/news/world-asia-india-45140158 https://www.bbc.com/news/world-asia-india-45140158 [3] https://www.bbc.com/news/world-latin-america-46145986 https://www.bbc.com/news/world-latin-america-46145986 [4] https://www.forbes.com/sites/erikkain/2019/01/25/facebook-turned-a-blind-eye-to-friendly-fraud-as-kids-racked-up-thousands-on-games/#50977a685ebf https://www.forbes.com/sites/erikkain/2019/01/25/facebook-tu...
- oasisbob 8y ago
  If I'm reading the article correctly, the situation described is almost the opposite. Large companies, due to their scale, are building capacity on new projects rather than buying into capacity on existing ones. If new essential infrastructure is being built by new entrants with diversified providers, diverse routes, and improved technologies it seems like a sign of a healthy market.
C1sc0cat 8y ago
Back in the day telcos used to collaborate on laying cables and in fact owned ships. Working for BT I found that there was a a whole other set of contracts and company procedures just for those employees who worked on the cable laying ships.
- johnnycab 8y ago
  >Back in the day telcos used to collaborate on laying cables and in fact owned ships. The process seems to be no different today, as the title and the content of the article suggest, rather indicates that it has become too 'collaborative'. Furthermore, owning sea-faring vessels in the grand project of laying cables, maintain and fix problems[1] is a drop in the ocean with relation to CapEx/OpEx, compared with multitude of other factors at play[2]. [1] https://www.wired.co.uk/article/subsea-internet-cable-ship-boat https://www.wired.co.uk/article/subsea-internet-cable-ship-b... [2] https://www.suboptic.org/wp-content/uploads/2014/10/ThA1.5.pdf https://www.suboptic.org/wp-content/uploads/2014/10/ThA1.5.p...
ionised 8y ago
Well, they conspired to keep developer wages low so why wouldn't they do this?
gambler 8y ago
>Second, the reason they are taking positions / building their own is that there isn't a business case to build these cables without them. They can, you know, contract it to an independent company. That's how most businesses in the world operate. We're moving towards a world where Google can potentially control your computer (Android/Chromebook), your internet connection (Google Fiber), the backbone cables (article), your content (YouTube, etc) and your servers (to some extent). They are already entrenched in some of those markets.

by mattrp 8y ago

yummypaint 8y ago

The industry as a whole has been trying to do this by attacking net neutrality. Things like metered plans create artificial scarcity and allow companies to increase the price of switching packets.

skybrian 8y ago
That's in the retail market which is very different.
samstave 8y ago
Dude, the ping i get on my facebook atlantic cable is like 2ms between here and the .eu shard. What are you getting on that other link?! Ssure they spy on all my stuff but look at that ping!
- wbl 8y ago
  2e-3s*3e8 m/s=6e5m. So no, you are not going to get 2ms transatlantic ping.
  - TheSpiceIsLife 8y ago
    Light travels something like 30% slower in fibre optic cable than vacuum. So would be more like 420 kilometres for 2ms.
    - ummonk 8y ago
      And that's round trip, so ~200 km away.
    - C1sc0cat 8y ago
      About .5c for both fibre and copper - from my memories on doing a CCNA a few years back.
mattrp 8y ago
You do raise an interesting point. For ex, I saw this elsewhere on HN: https://www.bloomberg.com/opinion/articles/2019-04-02/zuckerberg-op-ed-new-rules-would-hurt-everyone-but-facebook https://www.bloomberg.com/opinion/articles/2019-04-02/zucker...

kbenson 8y ago

> I think it's a bit far fetched to describe the current situation as a cartel. Well, they did specifically say it's not a cartel. Yet. I interpreted the article as an early warning to prevent them from becoming a cartel, as the author believes they have the capability to become one if they decide to. > First, what is the function of a cartel? It's to coordinate supply to keep prices high. No, it's to coordinate to keep profits high. Prices could fall, but less quickly than they would otherwise, and it could still be due to coordinated action. One example is if costs are falling quicker than prices, and prices drops are delayed or reduced. If consumers are hurt because they've altered the economics of the market to prevent competition, that would qualify for me. > Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly. Theoretically, they could make the market economics of new cables harder to justify, while keeping enhanced capability for themselves. Does affecting the world market to the degree that it would take a nation state to have enough money to change the status quo enough to allow competition in the data transit space count as anti-competitive? It may be that the term encompasses a lot more behavior when applied at that scale. Do the companies in question have enough resources and power to affect the global market in that way? I have no idea. It sounds crazy, but it feels like there's more consolidation of power in these companies (with regard to online content) than other industries have had in the past, and with an industry that's as large and lucrative as this, that seems to make them somewhat unique. The dark horse here might end up being China. If there was a cartel, China would have the capability and motive to bust it eventually. Of course, if the markets China wanted to reach were politically denied from specialized lobbying, that could counter them...

mattrp 8y ago
Even strong cartels like opec have to deal with “cheaters” - members who break the rules just a little bit to line their own pockets opportunistically. I’m not saying trust the content oligarchy but I do think there remain sufficient sources of independent providers and the strong likelihood that there will always be someone willing to sell off some capacity that the scenario above is unlikely... probably. Ask me tomorrow and I’ll probably agree with you more!
- 8y ago

tgsovlerkhgsel 8y ago

The article addresses it towards the bottom > Don’t worry though — we are nowhere near such a scenario. Yet.

andromeduck 8y ago
What a vacuous statement.

UweSchmidt 8y ago

If there is no business case to build something that is essentially infrastructure, then it is likely a natural monopoly and must be regulated. https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly

throwaway_9168 8y ago
Even then, you could have regulatory capture. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture Speaking of regulatory capture, I think that's really what happened and why Facebook has been able to get away with, actually, murder (e.g. Facebook's free internet had a big role in the murderous riots in Myanmar [1] and WhatsApp had a big role to play in mob lynchings [2], [3]). Not to forget the slap on the wrist they have gotten for what is basically child abuse in the "friendly fraud" case [4]. But not to worry, there is another dopamine hit coming up next minute to a mobile phone near you so you can pretend you never read this comment. In my view, it is best not to let these tech giants anywhere near these kind of ventures. [1] https://in.reuters.com/article/myanmar-rohingya-facebook/u-n-investigators-cite-facebook-role-in-myanmar-crisis-idINKCN1GO2Q5 https://in.reuters.com/article/myanmar-rohingya-facebook/u-n... [2] https://www.bbc.com/news/world-asia-india-45140158 https://www.bbc.com/news/world-asia-india-45140158 [3] https://www.bbc.com/news/world-latin-america-46145986 https://www.bbc.com/news/world-latin-america-46145986 [4] https://www.forbes.com/sites/erikkain/2019/01/25/facebook-turned-a-blind-eye-to-friendly-fraud-as-kids-racked-up-thousands-on-games/#50977a685ebf https://www.forbes.com/sites/erikkain/2019/01/25/facebook-tu...
oasisbob 8y ago
If I'm reading the article correctly, the situation described is almost the opposite. Large companies, due to their scale, are building capacity on new projects rather than buying into capacity on existing ones. If new essential infrastructure is being built by new entrants with diversified providers, diverse routes, and improved technologies it seems like a sign of a healthy market.

C1sc0cat 8y ago

Back in the day telcos used to collaborate on laying cables and in fact owned ships. Working for BT I found that there was a a whole other set of contracts and company procedures just for those employees who worked on the cable laying ships.

johnnycab 8y ago
>Back in the day telcos used to collaborate on laying cables and in fact owned ships. The process seems to be no different today, as the title and the content of the article suggest, rather indicates that it has become too 'collaborative'. Furthermore, owning sea-faring vessels in the grand project of laying cables, maintain and fix problems[1] is a drop in the ocean with relation to CapEx/OpEx, compared with multitude of other factors at play[2]. [1] https://www.wired.co.uk/article/subsea-internet-cable-ship-boat https://www.wired.co.uk/article/subsea-internet-cable-ship-b... [2] https://www.suboptic.org/wp-content/uploads/2014/10/ThA1.5.pdf https://www.suboptic.org/wp-content/uploads/2014/10/ThA1.5.p...

ionised 8y ago

Well, they conspired to keep developer wages low so why wouldn't they do this?

gambler 8y ago

>Second, the reason they are taking positions / building their own is that there isn't a business case to build these cables without them. They can, you know, contract it to an independent company. That's how most businesses in the world operate. We're moving towards a world where Google can potentially control your computer (Android/Chromebook), your internet connection (Google Fiber), the backbone cables (article), your content (YouTube, etc) and your servers (to some extent). They are already entrenched in some of those markets.