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

["George, Wes" <wesley.george () twcable com>]

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.

Wes George


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