Monday, June 15, 2009

isps complaints about content companies

so here's th thing
BT, (for example) complain that the bbc's iplayer (for example) causes too much traffic.
well, huhn - now I susbscribe to the internet at a given data rate because that is what is advertised - note this is a _download_ rate - I am already getting a massively erduced uplink speed to prevent me messign up the net as a small customer, and that is fine (and partly due to technology and physics limitations of ADSL on copper).

but when they sold me a service, they should have thought "oh, maybe he'll actually use it" - note I have a solid 8Mbps...

and when the BBC connect a large scale data center to the net (at some large scale price)
maybe the service provider should think "hmm, wonder why they're doing that" and think about who they are (oh, the bbc - maybe they want to let people download programmes later)

so when they service provider complains about the content provider "causing too much traffic", recall AT& complaining about google "causing load" and wanting a slice of the action

whaty is really going on is that company A failed to realise company B was going to be a success, and is now upset it didn't and is trying to remove neutrality as a threat (stick) to get a part of company B's profit. Nevermind that there was nothing whatsoever except lack of imagination stopping company A being in the business company B provided (oh, ok, so in BT's case, there was a long running rule about being a TV company....however this didn't stop them making money out of selling capacity to TV broadcast companies, and now, thanks to Ofcomm, is going away anyhow).

No, sorry, this is getting silly - nonetheleast because they "blame" is the wrong direction - blaming the BBC because the BBC's customers use BT's customers to use BT's network is surreal. You sell some folks a network, (and get a monthly fee, AND a lot of them upgrade as fast as they can pay more to get the upgrade) then complain when they use the network. Doh. what business did you want to be in then, is it?

(BT is a bad example, I admit due to the old no-TV rule) - so add your own.

Now look at Virgin's new "all you can eat" music subscription service proposal , and big stick if you do anything bad (they disconnect you) - this sounds like dubious practice to me...

4 comments:

Richard G. Clegg said...

Is the real underlying issue that most people want a flat "all you can eat" fee (to a completely irrational degree if you read the research on the subject) and most people want a relatively fast connection. However nobody would actually pay the price this would cost the ISP if it was fully used. Therefore all companies offer "unlimited (except for the limits)" connections and hope customers won't see the small print. I see human irrationality as a big part of the issue here.

Simon said...

The real underlying issue is that the telcos want a bigger part of the pie, because they are used to getting the entire pie, and they aren't willing to accept that most of the money is now going elsewhere, namely where most of the value is created. As long as the application providers were mostly losing money, the telcos were fine with it. But now they see some people actually making money (Google, Amazon, eBay). With "their" pipes, OMG!

Here's a Bellhead's (sorry: Alcatel-Lucent Bellhead's) explanation of the issue.

clog said...

note it doesn't "cost" the ISP if you use capacity - capacity is CAPEX
not OPEX.

once they've recouped the CAPEX cost, the rest is profit

the underlying ssue right now is how to get a piece of the content pie, to justify the CAPEX investment to deploy fiber (fair enough) - once the fiber deployment cost is covered, then we are back again to a situation where the telcos are making money for old rope (almost literally) and we need to make sure they only have marginal (but positive) profits

I sympathise with this right now because of rise of tv, but once they've finished FTTH, and has a couple of years to get back dosh, I will go back to my aggressive position again:)

Simon said...

"I sympathise with this right now because of rise of tv"

This is tricky. Here's my nethead conspiracy-theory take on the TV thing:

Once upon a time, the evil telco decided to compete with cable companies and video rental stores by selling more or less regular old TV and videos over IP. The "triple play" idea.

So they made fairly big investments into building out walled-garden IP multicast into their DSL networks, and upgrading distribution networks from ADSL to VDSL or even FTTH.

Once they had built this, they found that users weren't willing to pay enough for these walled-garden IPTV services for the telcos to pay back the investments quickly and achieve the tradotonal telco margins.

So I have limited sympathy for the telcos' whining about investments that nobody wants to pay for. Much of these investments were made speculatively by the telcos to support IPTV, which may never have been a compelling business case. So they invented the myth that they had/have to build these wonderful networks because greedy content companies lure irresponsible Internet users into abusing the poor network for things it hasn't been built for, for example video. So Google should pay for the IPTV that users don't want (enough).

But as I said, this is just nethead conspiracy theory. Hope you like it anyway!