From: Rabid Wombat <wombat@mcfeely.bsfs.org>
Date: Mon, 12 Aug 1996 14:01:39 +0800
To: John Young <jya@pipeline.com>
Subject: (Off Topic) Re: FCC_ups
In-Reply-To: <199608112108.VAA23815@pipe1.ny3.usa.pipeline.com>
Message-ID: <Pine.BSF.3.91.960812015431.25054A-100000@mcfeely.bsfs.org>
MIME-Version: 1.0
Content-Type: text/plain



(no crypto here, so delete it already)  :)

Yeah, right.

The tier one ISPs are refusing to peer with anyone that does not have at
least a T3 backbone cross-country, as they don't want to have to carry
other's bits long haul at no charge.. This is to keep "small ISP" from
opening locations all over the country, and connecting to "the Internet"
(bigger providors with cross-country capacity) without paying for the
long-haul capacity. 

Just because this scheme is economical on a small scale (probably only
looking at the costs of the two "ends", and considering the long haul to 
be "free") doesn't mean that it will work on a large scale. Large ISPs 
pay the same costs for infrastructure as telephone companies - or more.

POTS takes 64 Kb/s for one call, or 24 calls per T1. Analog from the CO to
your house, digital in between COs.  Packetizing the voice transmission to
carry it in IP increases the required bandwidth, unless compression is
used. Compression is getting better, but even state-of-the-art systems at
16 Kb/s sound like a bad connection on a car phone, IMHO. Go lower, and
you sound like Mickey Mouse - or Mickey on a car phone. ;)  I'd rather 
pay the dime lady $.10 per minute for a good connection than pay somebody 
else $.05-.08 for compressed audio.

On top of all that, most sound cards in PCs (today) are only capable of 
half-duplex audio. If you don't know why that matters, go play with your 
walkie-talkie a bit.

"The Internet" isn't "free", and as more delay-sensitive applications 
(voice, video) are added, ISPs will only become MORE aware of the demands 
their client's activities place on their capacity. I'd rather not see 
usage tarrifed on a volume basis, but this sort of approach to doing 
business on the 'net only makes such charges more likely.

Twenty years from now, you'll still have a few players dominating the top 
level - the infrastructure needed to support communications is expensive 
to create, maintain, and manage. The economies of scale in this industry 
will drive others out of the top tier. There will still be plenty of 
niche providors that focus on the vertical markets, and lease their 
bandwidth from the big players - same as today. As for whether the 
players will be the same as today, that depends. If the railroads had 
realized that they were in the transportation business, instead of the 
train business, they'd be flying airplanes today.

Anyone that wants to carry a large volume of traffic via the 'net will
find that either the market will dictate that they pay for the bandwidth
they use, or the FCC will. I don't see the FCC getting involved, unless
the "phone service via internet" providor tries to use the courts to get
out of paying for the bandwidth they use. They'll be restricted by the 
size of the "pipe" they purchase from their ISP, and the ISPs all charge 
more for access from larger "pipes." If they lease their own 
cross-country circuits, they'll pay the same (or higher) costs as the Telcos.

The large telephone companies are moving away from circuit switched 
networks, and towards packet switched networks - have been for years. 
It's called ATM, and it's not in wide use yet. There are advantages to 
building large scale communication systems this way, but "free bandwidth" 
is not one of them.

- Ranting Wombat

On Sun, 11 Aug 1996, John Young wrote:

>    8-10-96. WaPo: 
>  
>    "Phone Service Via the Internet May Slash Rates." 
>  
>       Labs of Advanced Technology has developed a way for 
>       people to make long-distance calls over the Internet 
>       using only their telephones, at about half the price of 

SNIP
>       phone companies. "Twenty years from now, and probably 
>       sooner, I don't see the giants of the telecommunications 
>       industry existing anymore," said the company's 
>       president. The giants hoot, "FCC, PACs, whack him." 
SNIP