Re: Observations of an Internet Middleman (Level3) (was: RIP Network Neutrality

[Owen DeLong <owen () delong com>]

On May 12, 2014, at 7:41 AM, George, Wes <wesley.george () twcable com> wrote:

> On 5/12/14, 10:07 AM, "Owen DeLong" <owen () delong com> wrote:
>
> > On May 12, 2014, at 6:02 AM, Nick Hilliard <nick () foobar org> wrote:
> >
> > > On 10/05/2014 22:34, Randy Bush wrote:
> > > > imiho think vi hart has it down simply and understandable by a lay
> > > > person.  <http://vihart.com/net-neutrality-in-the-us-now-what/>.  my
> > > > friends in last mile providers disagree.  i take that as a good sign.
> > >
> > > Vi's analogy is wrong on a subtle but important point.  In the analogy,
> > > the
> > > delivery company needs to get a bunch of new trucks to handle the
> > > delivery
> > > but as the customer is paying for each delivery instances, the delivery
> > > company's costs are covered by increased end-user charges.
> >
> > Two words nuke your suggestion here: Amazon Prime
>
> Amazon Prime isn’t a flat-rate delivery service for the delivery company,
> else it’d be called FedUPS Prime. It’s a flat rate shipping subscription
> for *Amazon*, and is likely a loss leader to ensure better stickiness of
> Amazon’s potential customers. They may have a great deal of negotiating
> leverage on their delivery partners to reduce their shipping costs, and
> the sheer volume of Amazon warehouses mean that they can take advantage of
> proximity to reduce costs further (like a CDN), but I haven’t seen
> anything implying that they’ve been successful in negotiating a contract
> that is insensitive to the *amount* of items being shipped.

Who cares? It’s insensitive from the end-customer perspective. Same as
what I pay to Comcast is insensitive to my usage. Amazon hasn’t negotiated
insensitive pricing with their shipping companies, just as Comcast hasn’t
negotiated insensitive pricing for infrastructure upgrades.

Seems to me that the analogy holds.

Owen