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Merit Network Blog Price War Erupts for High-Speed Internet Home Service     By Donald J. Welch - September 02, 2008 10:58 am This article in the Wall Street Journal (registration required) by Vishesh Kumar talks about how the phone companies are dropping their prices for home Internet service in response to their loss of market share to the cable companies. The author expects the cable companies to follow suit. He also says that this will hurt these companies because broadband has been more profitable than voice and TV. What does this mean to us as enterprise consumers? Bandwidth is being viewed, more and more as a commodity. This is not only in the home market, but in the enterprise market too. In commodity markets, prices rule since there is no significant quality difference. As you know and many are discovering, Internet service is not really a commodity in the home or enterprise market. There are differences in support, backbone capacity, redundancy and mesh that do differentiate the service. However, when consumers think of a commodity, they want low price. In the Internet industry, demand has been climbing at a very steep rate. The result is that Internet Service Providers are striving to invest the minimum that they can to stay ahead of demand while keeping their support costs low. So expectations of performance and support are high (bandwidth is almost a utility isn’t it? always there and always sufficient), demand is increasing ahead of the technology replacement cycle and the funding is not available for over-investment. Did I mention that the complexity of networks and the services that run on them is also growing rapidly? These are hard parameters to balance. Some of these companies will err in their judgment and the result will be outages. Last year we heard about a number of them from providers we didn’t expect that lasted longer than we expected. Of course, we don’t hear about most of the outages. I think this article means that we will continue to see strain on the Internet infrastructure for the foreseeable future. The evidence will be more slowdowns, service disruptions, and more restrictive policies. Merit is doing its best choose the right upstream providers by understanding how they balance these choices. Post a Comment Comments Re: Price War Erupts for High-Speed Internet Home Service Elwood J. Downing   September 05, 2008 12:05 pm I am not surprised by this article...and, I think as a Merit Community we need to discuss this further. What is your opinion on whether the bandwidth component should be removed from the pricing structure for your connection to Merit's network? Currently, there are two components, the connection, which a large percentage of our Members have a 100M, 250M, or 1G or more connection to the network and then bandwidth is provisioned over the connection. As an R&E network and a non-profit, should we consider looking at a connection structure independent of bandwidth structure as a service option for our Members? What are your thoughts?   Blog Archive   Merit Stimulus Blog Merit Stimulus Blog 11.16.09 By Gregory Monroe - November 16, 2009 9:50 am Merit Stimulus Blog Merit Stimulus Blog 11.12.09 By Gregory Monroe - November 12, 2009 12:35 pm Merit Stimulus Blog Merit Stimulus Blog 11.3.09 By Gregory Monroe - November 03, 2009 12:21 pm Merit Network Blog Members in the News 10.30 By Brian Warkoczeski - October 29, 2009 4:28 pm Merit Stimulus Blog Merit Stimulus Blog 10.26.09 By Gregory Monroe - October 26, 2009 10:42 am Merit Stimulus Blog Merit Stimulus Blog 10.19.09 By Gregory Monroe - October 19, 2009 10:58 am Merit Network Blog Members in the News 10.08 By Brian Warkoczeski - October 08, 2009 1:03 pm Merit Stimulus Blog Merit Stimulus Blog 10.6.09 By Gregory Monroe - October 06, 2009 1:19 pm Merit Stimulus Blog Merit Stimulus Blog 9.29.09 By Gregory Monroe - September 29, 2009 12:33 pm Merit Stimulus Blog Merit Stimulus Blog 9.21.09 By Gregory Monroe - September 21, 2009 12:35 pm Merit Stimulus Blog Merit Stimulus Blog 9.16.09 By Gregory Monroe - September 16, 2009 12:41 pm Merit Stimulus Blog Merit Stimulus Blog 9.8.09 By Gregory Monroe - September 08, 2009 11:25 am Merit Stimulus Blog Merit Stimulus Blog 8.24.09 By Gregory Monroe - August 24, 2009 10:36 am Merit Stimulus Blog Merit Stimulus Blog 8.17.09 By Gregory Monroe - August 17, 2009 12:09 pm Merit Network Blog Members in the News 8.14 By Brian Warkoczeski - August 14, 2009 9:14 am Professional Learning MJTS Call for Presentations By Brian Warkoczeski - August 06, 2009 12:53 pm Merit Stimulus Blog Members in the News 7.24 By Brian Warkoczeski - July 24, 2009 12:47 pm Merit Stimulus Blog Merit Stimulus Blog 7.21.09 By Gregory Monroe - July 21, 2009 11:29 am Merit Network Blog Members in the News 7.16 By Brian Warkoczeski - July 16, 2009 11:05 am Merit Stimulus Blog Merit Stimulus Blog 7.13.09 By Gregory Monroe - July 13, 2009 11:06 am Merit Stimulus Blog Merit Stimulus Blog 7.7.09 By Gregory Monroe - July 07, 2009 11:19 am Merit Stimulus Blog Merit Stimulus Blog 7.2.09 By Gregory Monroe - July 02, 2009 11:55 am Merit Network Blog Members in the News 6.30 By Brian Warkoczeski - June 30, 2009 4:20 pm Merit Network Blog NANOG46 Videos Available By Brian Warkoczeski - June 25, 2009 9:31 am Merit Stimulus Blog Merit Stimulus Blog 6.23.09 By Gregory Monroe - June 23, 2009 11:54 am Professional Learning Archived Merit Member Conference videos now available By Brian Warkoczeski - June 17, 2009 9:43 am Merit Stimulus Blog Merit Stimulus Blog 6.15.09 By Gregory Monroe - June 15, 2009 11:41 am Professional Learning Merit Member Conference Concludes By Brian Warkoczeski - June 12, 2009 3:57 pm Professional Learning Day Two of Merit Member Conference Begins By Brian Warkoczeski - June 12, 2009 10:32 am Professional Learning Dale Dougherty Brings Ingenuity to Merit Member Conference By Brian Warkoczeski - June 11, 2009 2:47 pm Professional Learning Merit Member Conference Extra! CEO and President Don Welch Announces Landmark Agreement with Internet2 By Gregory Monroe - June 11, 2009 1:51 pm Professional Learning Richard Katz starts 2009 Merit Member Conference By Brian Warkoczeski - June 11, 2009 10:47 am Merit Stimulus Blog Merit Stimulus Blog 6.8.09 By Gregory Monroe - June 08, 2009 11:52 am Merit Network Blog New White Paper on Botnets Released By Brian Warkoczeski - June 03, 2009 4:40 pm Merit Stimulus Blog Merit Stimulus Blog 6.1.09 By Gregory Monroe - June 01, 2009 12:56 pm Merit Network Blog Members in the News 5.29 By Brian Warkoczeski - May 29, 2009 11:42 am Merit Stimulus Blog Introducing Merit Stimulus Blog By Gregory Monroe - May 26, 2009 12:56 pm Merit Network Blog Members in the News 5.18 By Brian Warkoczeski - May 18, 2009 4:14 pm Merit Network Blog New RSS Feeds Available By Brian Warkoczeski - May 14, 2009 10:02 am Merit Network Blog Members in the News 5.8 By Brian Warkoczeski - May 08, 2009 9:44 am Merit Network Blog Members in the News 4.30 By Brian Warkoczeski - April 30, 2009 3:41 pm Merit Network Blog MJTS video archive now available By Brian Warkoczeski - April 23, 2009 2:02 pm Merit Network Blog Members in the News 4.17 By Brian Warkoczeski - April 17, 2009 11:33 am Merit Network Blog Members in the News 4.9 By Brian Warkoczeski - April 09, 2009 3:33 pm Merit Network Blog Members in the News 4.2 By Brian Warkoczeski - April 02, 2009 10:08 am Merit Network Blog Informative Mailing Lists By Brian Warkoczeski - March 30, 2009 11:26 am Merit Network Blog Members in the News 3.24 By Brian Warkoczeski - March 24, 2009 8:28 am Merit Network Blog Stimulus Legislation Information By Brian Warkoczeski - March 17, 2009 8:44 am Merit Network Blog Members in the News 3.11 By Brian Warkoczeski - March 11, 2009 10:46 am Merit Network Blog Members in the News 3.3 By Brian Warkoczeski - March 02, 2009 4:51 pm Merit Network Blog Members in the News 2.23 By Brian Warkoczeski - February 23, 2009 11:25 am Merit Network Blog NANOG45 Presentations Available Online By Brian Warkoczeski - February 16, 2009 1:47 pm Merit Network Blog Members in the News 2.12 By Brian Warkoczeski - February 12, 2009 10:44 am Merit Network Blog Featured Speakers for Merit Member Conference By Brian Warkoczeski - February 02, 2009 4:34 pm Merit Network Blog Merit Services Webinar By Brian Warkoczeski - January 29, 2009 4:16 pm Merit Network Blog Technology issues part of first week for new President By Brian Warkoczeski - January 23, 2009 12:28 pm Merit Network Blog Merit Services Seminar Videos By Brian Warkoczeski - January 05, 2009 9:56 am Merit Network Blog E-Rate Application Window By Brian Warkoczeski - December 02, 2008 8:19 am Merit Network Blog Tracking Flu Outbreaks Online By Brian Warkoczeski - November 13, 2008 10:10 am Merit Network Blog Is Web technology improving your brain? By Brian Warkoczeski - October 27, 2008 4:15 pm Merit Network Blog IP V6 By Donald J. Welch - October 17, 2008 12:53 pm Merit Network Blog PBS and YouTube Aim to Document Election Day By Brian Warkoczeski - October 16, 2008 10:01 am Merit Network Blog Justice Department Releases Cybercrime Survey Results By Brian Warkoczeski - September 23, 2008 4:54 pm Merit Network Blog Internet Traffic Growth Slowing World-Wide, But Utilization Up in U.S. By Donald J. Welch - September 08, 2008 9:50 am Merit Network Blog NANOG Launches New Web Site By Brian Warkoczeski - September 08, 2008 8:51 am Merit Network Blog Manage It or Just Buy More By Donald J. Welch - August 28, 2008 8:49 am Merit Network Blog Net Neutrality vs. File Sharing on Campus By Donald J. Welch - August 25, 2008 10:13 am Merit Network Blog Thinking About Virtual Worlds By Donald J. Welch - August 25, 2008 9:40 am Merit Network Blog What is Merit? By Donald J. Welch - August 20, 2008 4:33 pm Merit Network Blog New Merit Network Blogs By Brian Warkoczeski - August 18, 2008 9:56 am

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