Interneconomics

Some miscellanea for your weekend reading list.

We are constantly teaching our kids that you can’t believe everything you read on the internet. We tell them to look at the sources.

As on-line news continues to overtake traditional media, one might hope that certain traditional media affiliated websites would apply journalistic standards to their reporting. It would seem to be a competitive differentiator.

Check out this excerpt from CBC Online’s coverage on Tuesday of the wholesale internet dispute:

Smaller ISPs were given access to the networks of phone companies in the first place because the incumbents held a natural infrastructure monopoly, which was initially built through taxpayer funds when they were government-owned. The rules were put in place to boost the number of competitors selling internet access to the public, and thus keep prices down and service levels up.

Which government-owned incumbents are they talking about? Most of Canada’s phone lines have been in the hands of the private sector for the 140 year history of the telephone.

What source did the CBC use for that erroneous factoid? Reading through the comments, that little error drove misplaced hostility.

Interestingly, most arguments against usage based billing say that it means an end to flat rate pricing.

It would effectively prevent competitive ISPs from offering flat-rated Internet services, or any other type of offering that didn’t follow Bell’s UBB model, since they would have no means of containing their costs, if their customers were to exceed Bell’s usage caps.

Now, many of these same people are saying that the major phone companies and cable companies should offer flat rate service, despite their own costs being tied to usage.

Just because your costs are variable doesn’t mean you can’t offer a flat rate price; ask any restaurant that offers an all-you-can-eat buffet. Of course, those restaurants might choose their locations carefully, to balance their client mix.

If you happen to read the story on CBC and then glance at the comments, you will notice that the knowledge of the masses doesn’t hold a lot of promise for our future. One of the most common errors is mixing up bits and bytes. I’ll simply observe that 60GB works out to 133 hours of continuous streaming of 1 Mbps. It is way more than most of us come close to using, and less than what some people want.

So, going back to all-you-can-eat restaurant – how would you strike a fair balance?

Finally, for your weekend reading pleasure, let me commend to you this article called “Do You Think Bandwidth Grows on Trees?” from Slate Magazine, to which I was pointed by a long-time associate, colleague and friend.

Enjoy the weekend.

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Not ready for mission critical applications

BloggerThis blog is published using a free blogging tool, Blogger, provided by the good folks at Google.

The application is free; offered as part of the wonderous business model that characterizes many web applications. as such, there are limits to how demanding I can be as a user.

Unfortunately, Blogger has been experiencing growing pains recently. With Google acquiring various adjacent blogging tools, it has been trying to integrate the platforms for the various applications.

It seems that each time they touch one part of Blogger, another piece breaks. some of the analytics were out of service last week. A scheduled outage last night seems to have broken the ability to upload new posts today – which is why you may have thought that I took the day off. A lot of bloggers were in the same boat. The trouble seems to have cleared around 2:10pm today.

What was most frustrating was the inability to find anyone at Blogger to acknowledge that they were even aware of the problem!

Free applications sometimes are surprising in their ability to get the job done. Other times, it becomes clear that you get what you pay for.

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Bandwidth caps and net neutrality

On his blog, Bill St. Arnaud asks “Will bandwidth caps be the next battle for Network Neutrality”? His piece opens with some commentary:

Increasingly we are seeing carriers look to impose bandwidth caps and a variety of tiered services for Internet usage. Although I think some sort of bandwidth cap may be necessary for egregious users, there [sic] proliferation and adoption by cablecos and telco flies in the face of the fact that growth of Internet traffic is slowing down substantially as evidenced by the data provided by Andrew Olydzko. The cablecos and telcos seem to be the only industry that intentionally punishes their biggest customers when given declining growth rates they should be rewarding them. One suspects other motives may be at play

If you actually look at the data from Andrew Olydzko [ppt, 299 KB], you’ll see that the “slowing down substantially” refers to only 50-60%! That is 50-60% growth on a huge base and enormous penetration rate, meaning that in absolute terms, we still are seeing significant growth.

Of course, this is nothing (on a percentage basis) compared to wireless growth of 500% but you need to look beyond the percentages at the real numbers.

As to Bill’s comment that “cablecos and telcos seem to be the only industry that intentionally punishes their biggest customers when given declining growth rates”, I can’t figure out what he is talking about. Every service I pay for charges me more when I use more. Electricity, water, gasoline. Even car leases charge extra if you exceed the predicted mileage.

If you want to look at these kinds of issues in depth, you need to attend The 2009 Canadian Telecom Summit.

We have a session called Building Broadband on June 15, featuring real network operators, like the presidents of Sasktel, Cogeco Data Services and Barrett Xplore, suppliers like Motorola as well as the author of Homes with Tails. On June 16, we have a panel looking at Net Neutrality featuring Skype, Rogers and Sandvine. Have you registered yet?

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Demand side incentives for broadband

VerizonFollowing up on Monday’s posting about building broadband networks, I noticed Verizon’s comments to the US government about the American broadband stimulus bill speaks in similar terms to what I have been suggesting.

Verizon observed that 90 percent of U.S. households already have access to broadband, and that of the households that have computers, 80 percent of them subscribe to broadband services.

Verizon is calling for the program to focus on extending broadband connections to unserved areas, and addressing demand-side factors that hamper growth, such as many households still lacking a computer.

Verizon took issue with those seeking to attach regulatory conditions to broadband funding:

In order to ensure that the recovery act’s broadband programs do not get bogged down in regulatory wrangling that would undermine quick job creation and economic stimulus, [the government] also should avoid imposing regulatory ‘strings’ or eligibility criteria that will deter participation or otherwise inhibit sustainable broadband investment and job creation.

In other words, keep net neutrality restrictions off this program. Recall that last month, we wrote about the kinds of strings that some wanted attached to funding.

We have a session called Building Broadband on June 15 at The 2009 Canadian Telecom Summit. On June 16, we have a panel looking at Net Neutrality. Have you registered yet?

Defending customer service

TELUSThe CRTC has been asking TELUS some tough questions about delays in service being provided to customers in its ILEC territory.

Apparently, the Commission has received a number of complaints regarding new installation requests for local telephone service that cannot be completed.

The complaints allege that in many cases, TCC is not providing local telephone service to home owners for periods exceeding many months. In some other cases, the complaints allege that TCC will not be providing telephone service to their location at all due to the high costs to overlay cable facilities.

On March 19, the CRTC wrote TELUS asking it for information about the number of people who have been unable to get phone service, even asking for a list of customer names and addresses.

The information was due to be filed on Friday of this week, but the CRTC appears to have granted an extension until May 4. We’ll be following this.

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