<<< Date Index >>>     <<< Thread Index >>>

[IP] more on : Telco's Arrogant Stand on Content



Begin forwarded message:

From: Fritz Mills <fritz@xxxxxxxxxxxxxx>
Date: January 7, 2006 5:58:03 PM EST
To: dave@xxxxxxxxxx
Subject: Re: [IP] more on : Telco's Arrogant Stand on Content
I don't have any problem with the notion of paying for Quality of Service, but I think the argument, as it's been presented so far, is completely confused. First, the statement quoted below from Budde makes no sense. Google, Vonage, and others do not use the internet for free. Like everyone else, they pay for access and they pay for the bandwidth they use. They may not pay SBC, but that is beside the point. I, on the other hand, am a customer of SBC, and I pay them for access to the internet, and I pay for a certain amount of bandwidth (throughput). I may or may not choose to use my access to connect to Google or to use Vonage's services, but the point is, that *I* am their customer, not Google or Vonage, and if they want to charge me more to guarantee a certain level of quality of service for some or all of my internet access needs, that's something we can negotiate, but that has nothing to do with Google. Conversely, even if I do choose to use my access to visit Google, It is because I have paid SBC for the bandwidth to do so. Google has paid their provider for the bandwidth to accept my visit, but they should have no obligation to pay SBC as well.
To put it in terms that perhaps the telcos can better understand: If I pick up my telephone and make a call to Google, I must pay my telco for my phone line and telephone service, and Google must pay their telco to provide the telephone service that allows them to answer my call, but there is no obligation on the part of Google to pay my telco, too. Nor is it true in that situation that Google has "used [my telco's] pipes for free." 




Begin forwarded message:

From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
Date: January 2, 2006 5:25:14 PM EST
To: Dewayne-Net Technology List <dewayne-net@xxxxxxxxxxxxx>
Subject: [Dewayne-Net] re: Telco's Arrogant Stand on Content
Reply-To: dewayne@xxxxxxxxxxxxx

[Note:  This comment comes from reader Andrew Odlyzko.  DLH]


From: odlyzko@xxxxxxxxxxx (Andrew Odlyzko)
Date: January 2, 2006 8:34:30 AM PST
To: dewayne@xxxxxxxxxxxxx
Subject: Re: [Dewayne-Net] Telco's Arrogant Stand on Content

Dewayne,

There is plenty of arrogance on both the telco and content provider
sides.  But statements such as this one from Budde, and Whitacker's

   "What [Google, Vonage, and others] would like to do is to use my
   pipes free. But I ain't going to let them do that."

make clear is that the key issue behind much of the posturing about
open access and deregulation is the division of revenues from content
sales between the content owners and the service providers.

I don't know what Budde is referring to when he talks of telcos
getting under 50 percent of revenues from content.  In general,
service provider takes are far higher. If you look at cable companies, 
they spend around 25 percent of their revenues on content, and get
to keep 75 percent or so for the maintenance of the networks, profits, ... Satellite radio pays someplace between 5 and 10 percent of its revenues 
for the music they play.  And NTT DoCoMo's i-mode pays only about
15 percent of its revenues for content. (I don't know what the revenue 
split is on cellphone music ringtone downloads.)  So it is natural
that the content industry is salivating at the prospect of getting
more competition in delivery, and boosting their takes.  Getting
something like 50 percent would do wonders for their finances.

But what both the content industry and the telcos forget is that
there simply is not enough money in content to pay for all the
telecommunications networks.  Connectivity, not content, is where
the real money is, as has been clear for a long time,

  <http://firstmonday.org/issues/issue6_2/odlyzko/>

So yes, the content providers and Internet companies like Google and
Yahoo! can build backbones, but they can't afford to provide universal 
local connectivity.

Happy New Year,
Andrew
P.S. There are lots of other comments one could make about this piece by Budde. For example, his rosy prediction for tele-presence flies in the face of numerous failures in video telephony. But that is another 
subject.


Weblog at: <http://weblog.warpspeed.com>



-------------------------------------
You are subscribed as fritz@xxxxxxxxxxxxxx
To manage your subscription, go to
 http://v2.listbox.com/member/?listname=ip
Archives at: http://www.interesting-people.org/archives/interesting- people/ 



-------------------------------------
You are subscribed as roessler@xxxxxxxxxxxxxxxxxx
To manage your subscription, go to
 http://v2.listbox.com/member/?listname=ip

Archives at: http://www.interesting-people.org/archives/interesting-people/