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

[Owen DeLong <owen () delong com>]

On May 15, 2014, at 7:57 AM, McElearney, Kevin <Kevin_McElearney () cable comcast com> wrote:

> Upgrades/buildout are happening every day.  They are continuous to keep ahead of demand and publicly measured by 
> SamKnows (FCC measuring broadband), Akamai, Ookla, etc

I didn’t say they weren’t doing any upgrades/buildouts.

I will say that the copper capabilities in my neighborhood are so far behind demand(s) that it is abysmal. There hasn’t 
been significant maintenance to the $TELCO copper plant in my neighborhood since it was installed in 1960.

> What is not well known is that Comcast has been an existing commercial transit business for 15+ years (with over 8000 
> commercial fiber customers).  Comcast also has over 40 balanced peers with plenty of capacity, and some of the 
> largest Internet companies as customers.

I’ve been asked by my employer to stop picking on specific large ISPs. However, my experiences with $CABLECO have been 
as described. The infrastructure in my neighborhood was horrible and did not improve at all until I ordered business 
class service from them. I’ve seen nothing to indicate that there is any significant effort to improve customer 
satisfaction, but lots of things to indicate that they are trying to leverage as much revenue out of as little 
investment as possible.

Owen

>      - Kevin
>
> 215-313-1083
>
> > On May 15, 2014, at 10:19 AM, "Owen DeLong" <owen () delong com> wrote:
> >
> > Oh, please do explicate on how this is inaccurate…
> >
> > Owen
> >
> > > On May 14, 2014, at 2:14 PM, McElearney, Kevin <Kevin_McElearney () cable comcast com> wrote:
> > >
> > > Respectfully, this is a highly inaccurate "sound bite"
> > >
> > >   - Kevin
> > >
> > > 215-313-1083
> > >
> > > > On May 14, 2014, at 3:05 PM, "Owen DeLong" <owen () delong com> wrote:
> > > >
> > > > Yes, the more accurate statement would be aggressively seeking new
> > > > ways to monetize the existing infrastructure without investing in upgrades
> > > > or additional buildout any more than absolutely necessary.
> > > >
> > > > Owen
> > > >
> > > > On May 14, 2014, at 8:02 AM, Hugo Slabbert <hugo () slabnet com> wrote:
> > > >
> > > > > > So they seek new sources of revenues, and/or attempt to thwart
> > > > > > > competition any way they can.
> > > > > No to the first. Yes to the second. If they were seeking new sources of
> > > > > > revenue, they'd be massively expanding into un/der served markets and
> > > > > > aggressively growing over the top services (which are fat margin).
> > > > >
> > > > > Sure they are (seeking new sources of revenue).  They're not necessarily
> > > > > creating new products or services, i.e. actually adding any value, but they
> > > > > are finding ways to extract additional revenue from the same pipes, e.g.
> > > > > through paid peering with content providers.
> > > > >
> > > > > I'm not endorsing this; just pointing out that you two are actually in
> > > > > agreement here.
> > > > >
> > > > > --
> > > > > Hugo
> > > > >
> > > > >
> > > > > > > On Wed, May 14, 2014 at 7:23 AM, <charles () thefnf org> wrote:
> > > > > > >
> > > > > > > On 2014-05-14 02:04, Jean-Francois Mezei wrote:
> > > > > > >
> > > > > > > On 14-05-13 22:50, Daniel Staal wrote:
> > > > > > >
> > > > > > > They have the money.  They have the ability to get more money.  *They see
> > > > > > > > no reason to spend money making customers happy.*  They can make more
> > > > > > > > profit without it.
> > > > > > >
> > > > > > > There is the issue of control over the market. But also the pressure
> > > > > > > from shareholders for continued growth.
> > > > > >
> > > > > >
> > > > > > Yes. That is true. Except that it's not.
> > > > > >
> > > > > > How do service providers grow? Let's explore that:
> > > > > >
> > > > > > What is growth for a transit provider?
> > > > > >
> > > > > > More (new) access network(s) (connections).
> > > > > > More bandwidth across backbone pipes.
> > > > > >
> > > > > >
> > > > > > What is growth for access network?
> > > > > > More subscribers.
> > > > > >
> > > > > > Except that the incumbent carriers have shown they have no interest in
> > > > > > providing decent bandwidth to anywhere but the most profitable rate
> > > > > > centers. I'd say about 2/3 of the USA is served with quite terrible access.
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > > > The problem with the internet is that while it had promises of wild
> > > > > > > growth in the 90s and 00s, once penetration reaches a certain level,
> > > > > > > growth stabilizes.
> > > > > >
> > > > > > Penetration is ABYSMAL sir. Huge swaths of underserved americans exist.
> > > > > >
> > > > > >
> > > > > >
> > > > > > > When you combine this with threath to large incumbents's media and media
> > > > > > > distribution endeavours by the likes of Netflix (and cat videos on
> > > > > > > Youtube), large incumbents start thinking about how they will be able to
> > > > > > > continue to grow revenus/profits when customers will shift spending to
> > > > > > > vspecialty channels/cableTV to Netflix and customer growth will not
> > > > > > > compensate.
> > > > > >
> > > > > > Except they aren't. Even in the most profitable rate centers, they've
> > > > > > declined to really invest in the networks. They aren't a real business. You
> > > > > > have to remember that. They have regulatory capture, natural/defacto
> > > > > > monopoly etc etc. They don't operate in the real world of
> > > > > > risk/reward/profit/loss/uncertainty like any other real business has to.
> > > > > >
> > > > > >
> > > > > >
> > > > > > > So they seek new sources of revenues, and/or attempt to thwart
> > > > > > > competition any way they can.
> > > > > >
> > > > > > No to the first. Yes to the second. If they were seeking new sources of
> > > > > > revenue, they'd be massively expanding into un/der served markets and
> > > > > > aggressively growing over the top services (which are fat margin). They did
> > > > > > a bit of an advertising campaign of "smart home" offerings, but that seems
> > > > > > to have never grown beyond a pilot.
> > > > > >
> > > > > >
> > > > > >
> > > > > > > The current trend is to "if you can't fight them, jon them" where
> > > > > > > cablecos start to include the Netflix app into their proprietary set-top
> > > > > > > boxes. The idea is that you at least make the customer continue to use
> > > > > > > your box and your remote control which makes it easier for them to
> > > > > > > switch between netflix and legacy TV.
> > > > > > True. I don't know why one of the cablecos hasn't licensed roku, added
> > > > > > cable card and made that available as a "hip/cool" set top box offering and
> > > > > > charge another 10.00 a month on top of the standard dvr rental.
> > > > > >
> > > > > >
> > > > > >
> > > > > > Would be interesting to see if those cable companies that are agreeing
> > > > > > > to add the Netflix app onto their proprietary STBs also  play peering
> > > > > > > capacity games to degrade the service or not.
> > > > > >
> > > > > > So how is the content delivered? Is it over the internet? Or is it over
> > > > > > the cable plant, from cable headends?