From: Tomas L. Byrnes (no email)
Date: Fri Jan 18 2008 - 17:39:21 EST
there are already companies like Vyatta that represent the nascent part
of this space, at least on the software/equipment side.
> -----Original Message-----
> From: [mailto:] On
> Behalf Of
> Sent: Friday, January 18, 2008 1:17 PM
> To:
> Subject: RE: An Attempt at Economically Rational Pricing:
> Time Warner Trial
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>
> > The problem in the ISP industry isn't lack of usage based pricing.
> > It's that the going rate for basic connectivity was driven
> below that
> > which is economically sustainable by the ILECs when they engaged in
> > predatory pricing to drive the CLECs out of business in the
> late 90s.
> > Now that they own the market, they find that, having driven
> the prices
> > down, they can't raise them, so they are engaging in various
> > subterfuges that are designed to cover up the basic thing they are
> > doing:
> > trying to charge more for the exact same service.
>
> Sooner or later, somebody is going to try to apply Google's
> approach to hardware in a network backbone. Imagine a network
> backbone with no Cisco or Juniper boxes in it, just lots of
> commodity boxes with triple-redundancy everywhere (quintuple
> in NFL cities).
>
> Vadim Antonov tried to build something like this into a
> backbone router, but the market for IP backbone equipment is
> so incredibly conservative, and the pricing was up there with
> the big boys, so he never had a chance at it.
>
> I don't know if Google is doing something like this between
> their data centers, but I think that the fundamental price of
> fiber is low enough that with commodity router/switches and
> triple the fiber miles, we can have a reliable IP packet
> moving service without jacking prices up.
>
> Even if prices do go up, it will be a short term thing
> because sooner or later, Google, or somebody who thinks as
> bold as they do, will build a true commodity packet-moving
> service, and the telecoms industry will fall back into the
> razor-thin margin utility sector where it belongs.
>
> I'm sure many of you will think I am crazy because you know
> just how much those high-speed ports cost and you can't see
> any letup in bandwidth growth. But the fact is that ports are
> not the fundamental components of routers. Chips are, and as
> we all know, chips keep getting smaller, cheaper, faster and
> more powerful. FPGAs, SOCs, multicore CPUs and so on. The
> company that cracks the Internet utility problem might even
> design and build their own devices rather than outsourcing
> that, at a high price, to the benevolent vendors.
>
> --Michael Dillon
>
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