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Networking Businesses The Almighty Buck The Internet

Level 3 Wants To Make Peering a Net Neutrality Issue 182

Posted by Soulskill
from the first-among-peers dept.
New submitter thule writes "A story at Gigaom talks about how Level 3 is trying to pull peering into the net neutrality issue. Regulating peering could hamper how the Internet is interconnected, potentially turning it into a bureaucratic mess. Should peering be regulated?" Reader raque points out that Netflix CEO Reed Hastings is banging the net neutrality drum, too: "Some major ISPs, like Cablevision, already practice strong net neutrality and for their broadband subscribers, the quality of Netflix and other streaming services is outstanding. But on other big ISPs, due to a lack of sufficient interconnectivity, Netflix performance has been constrained, subjecting consumers who pay a lot of money for high-speed Internet to high buffering rates, long wait times and poor video quality. ... Once Netflix agrees to pay the ISP interconnection fees, however, sufficient capacity is made available and high quality service for consumers is restored. If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future. Roughly the same arbitrary tax is demanded from the intermediaries such as Cogent and Level 3, who supply millions of websites with connectivity, leading to a poor consumer experience."
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Level 3 Wants To Make Peering a Net Neutrality Issue

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  • Re:Fine Line (Score:5, Interesting)

    by Obfuscant (592200) on Friday March 21, 2014 @04:40PM (#46546575)

    as the city makes the choice based on what cable, and phone provider gives them the right bid to lay the lines.

    Franchise fees are not a "bid", they are a contractually negotiated fee for using city rights of way. Once a fee is negotiated, it would be hard for a city to say "your fee will be higher" to a second company, since they've set the price for access.

    What prevents a second cable system from overbuilding the first is not the franchise fee, it is the lower return on investment from having to compete with the existing system. No business would want to invest heavily in physical plant when there would be little profit in doing so. Their fixed costs would not be recouped by the sales, much less the incremental costs.

    It's not like a grocery store where the fixed costs are relatively low to find and outfit a building and have the customer come to you. Cable requires the "grocery store" to go to the customer where he is, and simply lowering prices until the customers stop going to the competitor and start coming to you won't work. It is not economically viable to build the system as you get customers. The turn-on time would be long.

  • Re:Sure, but.. (Score:4, Interesting)

    by FuegoFuerte (247200) on Friday March 21, 2014 @04:54PM (#46546645)

    I understand you probably don't work with this type/scale of equipment/network on a regular basis, but the fact is $10k *is* extremely cheap. It's also probably a bit of a bogus number, or at least incorporates a whole lot of stuff beyond the actual connection (not just the cost of the optics, but some of the cost of the blade/chassis, and cost of power and rack space over an X year period, etc). The optics themselves are pretty cheap now - probably no more than $800/side, and with the scale of the large operators it's a good bet they're paying $500/ea for 10g SFPs. Believe me, a network operator of this size sneezes 10g optics without thinking about it - their on-site guys probably play dominoes with the spares.

    A little fun math: Let's say for the sake of easy math that the average customer pays $42/month for broadband, or $500/year. Let's say the average lifecycle of a 10g optical link and the associated routers is 3 years, and the single cross-connect costs $10k, spread across those 3 years, for a cost of approximately $3500/yr. So, ignoring the cost of the last-mile infrastructure (partly because the vast majority is in place and has probably been paid off for years), the cable company would have to add 7 customers to pay for each new cross-connect. Again using nice round decimal numbers for the sake of easy math, at a cap of 50mbps per subscriber, you could have 200 customers fully saturating their links before you would saturate the 10gbps cross-connect, assuming ALL customer traffic was being routed that way. So if your first 7 customers paid for the cross-connect, and we're talking about 3-year equipment lifecycles, that leaves just shy of $290k for the ISP to spend on their other infrastructure and overhead.

    Summary: I think they'll be just fine, and not need to raise your fees (they probably will raise them anyway, but that's an entirely different discussion).

  • by Anonymous Coward on Friday March 21, 2014 @09:33PM (#46548417)

    Level 3 and Cogent try to "peer" with Tier 1 carriers when they are really just middlemen taking tier 1 carrier potential customers and offering them a cheaper deal because they "peer" with tier 1 carriers. They are not peers. They are customers and should pay like anyone else. The top carriers have invested in equipment, fiber, facilities, and personnel to manage a much more robust network than either carrier and should be compensated accordingly.

    I work for a tier 1 and I can tell you every time we bring up a peering connection with them it is saturated. Just as ISPs can cap bandwidth for home users, we have to cap the peering points with these carriers until they pay for it. Should we just set up racks and racks of routers for them for free (with no revenue) while they siphon customers from us and get paid?

  • by Anonymous Coward on Friday March 21, 2014 @11:14PM (#46548871)

    Traffic is not sent randomly, if something is sent it's because it was requested. It would make more sense to have the recipient pay instead of the sender, the same way the buyer of goods pay.
    It would have a few more advantages:
    - no need for ads anymore, every time you view a webpage, the content provider gets paid a little bit.
    - no more "piracy", "pirates" would pay by eating their bandwidth.

    Now the problem is shady content providers sending useless content to inflate the bill. But that would not be different from them bombarding us with ads and creating parking websites.

    Small issue here. Bandwidth isn't worth the same as the content that consumes it. Not by a long shot in the most fevered dreams of Comcast executives. In fact, this is what scares them so much. They've been exploiting this asymmetry since the end of the national cable rollout in the 80s. They know that once they've payed off the fixed costs of hardware, the prices they charge do not reflect in any way the ongoing costs of maintenance. Bits are cheap. The pipes they travel over have all already been payed for. Ironically, the very real and necessary cost of bringing the US residential infrastructure into the 21st century is one the cable executives staunchly refuse to acknowledge, as it would only further exemplify that bits are not only cheap, they're getting cheaper at an astonishing rate.

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