x
Page 1 / 2   >   >>
spc_markl 12/5/2012 | 4:17:11 PM
re: Did Level 3 Know What It Was Getting Into?

The idea that somebody as shrewd as Level 3's CFO, Sunit Patel, was ignorant of these potential financial implications seems ridiculous.


Mark

Jeff Baumgartner 12/5/2012 | 4:17:10 PM
re: Did Level 3 Know What It Was Getting Into?

But there still seems to be a lot of surprise coming from the Level 3 camp, like this sort of thing was unexpected, when apparently this is how cdn biz gets done. It certainly looks like someone missed something along the way. JB

Jeff Baumgartner 12/5/2012 | 4:17:10 PM
re: Did Level 3 Know What It Was Getting Into?

Good question, but it's probably more fun to proclaim that the Internet's sky is falling because of these discussions/differences. But interesting to hear the FCC weigh in on it (or at least note that it would look into it) when there's been no formal complaint filed with the agency (yet).  JB


ADD:


More FCC-related stuff:  Comcast sent a letter to the FCC that it would be open to meet with Level 3 at the agency "if that will facilitate a better understanding of the matters at issue."   So they don't seem to be more than confident about their position on this one.


 

cnwedit 12/5/2012 | 4:17:10 PM
re: Did Level 3 Know What It Was Getting Into?

Thanks for the details, Jeff. I wonder if any of this kind of information is going to make it into the hysterical coverage of Comcast's latest Net Neutrality "blunder."

rjmcmahon 12/5/2012 | 4:17:10 PM
re: Did Level 3 Know What It Was Getting Into?

It's important to separate the last mile providers such as Comcast from the middle pipes providers such as LVLT and Cogent.  The former enjoys a natural monopoly with little to no competition along with regulatory capture while the latter have to truly compete in a competitive market.  In the context of basic economics, Comcast arguing that they are equivalent to Cogent is facetious.

rjmcmahon 12/5/2012 | 4:17:09 PM
re: Did Level 3 Know What It Was Getting Into?

Is seems obvious that Comcast is protecting their "walled garden" video offerings from competition by extracting monopoly rents from Netflix's middle pipe providers.  With respect to leveraging a natural monopoly, it's not much different then what VZ did to Sprint (and others) with wireless backhaul. If we allow "the monopolists and the captured regulators" to collapse the whole thing into a few national providers for both content as well as distribution (a la teresterial TV in the 50s-80s) we'll be taking one giant step backwards and our kids really should be ashamed of us ;)

Jeff Baumgartner 12/5/2012 | 4:17:09 PM
re: Did Level 3 Know What It Was Getting Into?

That certainly seems to be the argument Level 3 is trying to put forth here by trying to wrap this into a net neutrality debate, and it's going to get lots of attention... okay... it already has.  Of course, getting Comcast to offer an admission of any sort that this has something to do with protecting their own OTT content is another thing. Still, it's hard for anyone to argue that Netflix isn't a threat to the cable business in more ways than one, which is part of the reason why Level 3's side of the argument can't be ignored, either.  JB


 

rjmcmahon 12/5/2012 | 4:17:08 PM
re: Did Level 3 Know What It Was Getting Into?

Netflix isn't a threat to Comcast/cable because they don't control the broadcasting rights.  Any deal that Netflix negotiates with Disney, Viacom, et. al. is a deal Comcast could also get.  In reality, Comcast will out negotiate Netflix as they have market power via their natural monoply while Netflix really doesn't have any durable competitive advantage.


 

rjmcmahon 12/5/2012 | 4:17:08 PM
re: Did Level 3 Know What It Was Getting Into?

Seven,


LVLT doesn't connect to tens of millions of homes so calling them a last mile provider really is playing semantic games which makes discussion/debate difficult.  Comcast is basically doing the same thing with their Cogent analogy.  I'd say let's describe things as they really are and go from there.

paolo.franzoi 12/5/2012 | 4:17:08 PM
re: Did Level 3 Know What It Was Getting Into?

 


The thing is that Level 3 IS a last mile provider...for Netflix and this is the entire point of the argument.


Netflix lots out (and they pay level 3 for this) and little in.  The form of compensation described here is exactly what happens in the phone world.  If you are the source of a lot of calls, you end up sending a check into the system to compensate for those who receive lots of calls.


That is where you are missing in your analogy.  If your endpoint is in 1 or more Equinix Data centers (where for example my networks are), then your last mile providers are NOT the normal people that you think about.  You keep refering to consumer last mile providers, not business ones.


seven


 

Page 1 / 2   >   >>
HOME
SIGN IN
SEARCH
CLOSE
MORE
CLOSE