re: Report Explores Internet Growth PuzzleThough valuable as the issue of real traffic growth might be, it is more important to understand why nobody is making money as the traffic increases.
I believe there are a number reasons revenues have not followed the growth.
1) End stations can now use more of the bandwidth - Just because a home has ADSL with a 256K downlink speed doesn't mean they can use it all. As home PCs become more powerfull they can easily fill that pipe - but they are not paying any more. More efficient use of uplinks by enterprise networks also utilizing more fully what they pay for.
2) Flat rate billing for broadband access - MSOs and DSL providers have fixed pricing models that don't take into account actual usage. I suspect that in time - users with heavy download traffic (BobbyMax pulling down nasty MPEGs or such) will get a different billing scheme - just like cable TV. Basic users - basic rate. Those wanting HBO and the Playboy channel (is that still around) will have to pay extra.
3) Users are accustomed to a flat rate billing model and are reluctant to pony up more money for key access services. In time the downloading of MP3 files will have to be metered - or there will be no music industry anymore.
4) Internet=cheap - enterprise networks will utilize IP VPNs only if they are cheaper than the FR/ATM/TDM connections they have now. That keeps prices low.
5) Worldcomm recovery - They should have failed. Now - with no debt they can continue to compete on price keeping prices at or below profit levels for other IXCs and ISPs.
This is my guess why there is no money in IP so far.
re: Report Explores Internet Growth PuzzleBrilliant post materialgirl.
To make money on internet traffic, the whole "project" needs to get privatized. Divide up the assets and bid them out, perhaps. The fallout will be enormous in that you'd see a lot of people revolt (there's already a growing anti-internet movement). But in the long run, it would be a real business as opposed to the anarchy it is today.
It'll never happen. Genie is out of the bottle now. Internet is indeed a large commodity and it's just a matter of time before the appliances that run it are commodities as well. Exactly like the TV industry but this time it's the Chinese who are going to do the dumping.
Content will make a big comeback, in my opinion, at the expense of infrastructure. That's why Microsoft has been spending billions to get into the content business for the last 5 years. They can see the handwriting on the wall.
re: Report Explores Internet Growth PuzzleHow about this for a thesis: revenues are not matching Internet traffic growth because it is physically impossible for it to do so. The Internet is a lab experiment (albeit a good one) gone mad. It was developed specifically without metering technology, as that wastes bandwidth and adds to packet processing overheads.
What we have here is a scientifically designed, perfect, commodity. Its capacity also expands almost instantantly and infinitely. How does one differientate, or even meter, service? IF the volume provider wins, what you end up with is a guaranteed "race to the bottom" in pricing. Ultimately, capacity is not free. However, the link between usage and cost is missing. It is worse than the DRAM market.
re: Report Explores Internet Growth PuzzleExcellent!
Remember why the "Internet" was built is the key. It was never designed to be metered or billed. IP was never designed to be metered or for billing purposes.
This of course poses the question - if bandwidth providers are going to make enough revenue from their access and transport businesses will TCP and UDP have to be rewritten to accomidate billing information? Will routers now have to track packets per IP/MAC address and be able to assoicate those two to a physical billing address?
Or do we surrender transport as a loss leader and focus on content?
re: Report Explores Internet Growth PuzzleYou guys and gals trying solve this puzzle with markets may want to focus on goods and services which are rivalrous, excludable, or both. And these foolish attempts to convert water (bw) into wine isn't going to be much of a business opportunity.
The growth of the internet (and communications) is real, like it or not. The only way to stop it is to go the way of Burma. Those that choose that path may want to spend some time on the following site. Recommended reading for the FCC, Fox, and Kinga Dubya.
It is not power that corrupts but fear. Fear of losing power corrupts those who wield it and fear of the scourge of power corrupts those who are subject to it. Most Burmese are familiar with the four a-gati, the four kinds of corruption. Chanda-gati, corruption induced by desire, is deviation from the right path in pursuit of bribes or for the sake of those one loves. Dosa-gati is taking the wrong path to spite those against whom one bears ill will, and moga-gati is aberration due to ignorance. But perhaps the worst of the four is bhaya-gati, for not only does bhaya, fear, stifle and slowly destroy all sense of right and wrong, it so often lies at the root of the other three kinds of corruption. Just as chanda-gati, when not the result of sheer avarice, can be caused by fear of want or fear of losing the goodwill of those one loves, so fear of being surpassed, humiliated or injured in some way can provide the impetus for ill will. And it would be difficult to dispel ignorance unless there is freedom to pursue the truth unfettered by fear. With so close a relationship between fear and corruption it is little wonder that in any society where fear is rife corruption in all forms becomes deeply entrenched.
re: Report Explores Internet Growth PuzzleAt the risk of sounding stupid, would someone mind explaining something to me? What I can't grock here is why, just because there demand, is there a view that it will be provided? It meaning IP based WAN connectivity.
Why not just shut it off, or cap it? Isn't that a reasonable response?
IP WAN just sounds like a losing business case.
It's not like there is a law that it must be provided.... is there? And by the way, I really want my phone to stay working.
re: Report Explores Internet Growth PuzzleWhat I can't grock here is why, just because there demand, is there a view that it will be provided? It meaning IP based WAN connectivity.
Why not just shut it off, or cap it? Isn't that a reasonable response?
It's not reasonable, rational, nor realistic.
And on why: Human productivity sits behind it. Shutting it off would be like closing down all the schools replacing them with radical fundamentalist mosques and filling up the prisons with all that dissent. No civilized society would adopt that approach for its advancement.
re: Report Explores Internet Growth PuzzleDon't you have a Socialist Workers of the World meeting to attend? Or a facuilty meeting for whinning on topic for a change?? Or shouldn't you be lighting candles to your Hillary shrine in the corner? Anything but posting this useless crap - talk about spam!!
re: Report Explores Internet Growth PuzzleIbeenframed; The other day, when playing hoops, a player 6' 5", one who could jump over me and dunk without much effort, stopped scoring. The trick was to shut off his move the right. If he would have used his left, only a few times, he would have crushed me.
Try going left and you will win in this game. Then we can move on and focus our efforts on lasting contributions.
I believe there are a number reasons revenues have not followed the growth.
1) End stations can now use more of the bandwidth - Just because a home has ADSL with a 256K downlink speed doesn't mean they can use it all. As home PCs become more powerfull they can easily fill that pipe - but they are not paying any more. More efficient use of uplinks by enterprise networks also utilizing more fully what they pay for.
2) Flat rate billing for broadband access - MSOs and DSL providers have fixed pricing models that don't take into account actual usage. I suspect that in time - users with heavy download traffic (BobbyMax pulling down nasty MPEGs or such) will get a different billing scheme - just like cable TV. Basic users - basic rate. Those wanting HBO and the Playboy channel (is that still around) will have to pay extra.
3) Users are accustomed to a flat rate billing model and are reluctant to pony up more money for key access services. In time the downloading of MP3 files will have to be metered - or there will be no music industry anymore.
4) Internet=cheap - enterprise networks will utilize IP VPNs only if they are cheaper than the FR/ATM/TDM connections they have now. That keeps prices low.
5) Worldcomm recovery - They should have failed. Now - with no debt they can continue to compete on price keeping prices at or below profit levels for other IXCs and ISPs.
This is my guess why there is no money in IP so far.