Merit Network
Can't find what you're looking for? Search the Mail Archives.
  About Merit   Services   Network   Resources & Support   Network Research   News   Events   Home

Discussion Communities: Merit Network Email List Archives

North American Network Operators Group

Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical

Re: best effort has economic problems

  • From: Edward B. Dreger
  • Date: Sat May 29 18:49:27 2004

GC> Date: Sat, 29 May 2004 16:53:17 -0400
GC> From: Gordon Cook


GC> The point I am making in my report is NOT that the best
GC> effort network has technology problems but rather that it has
GC> ECONOMIC PROBLEMS.  That it might support 2 or 3 players not
GC> 2 or 3 HUNDRED.

Best effort is cheaper to provide.  Cheaper sells.  Is there
enough of a market to sustain premium services?  IP-based VPNs
haven't replaced FR and PtP WAN links, but FR and PtP haven't
thwarted IP-based VPNs.


GC> That until companies begin to go chapter seven and vanish,
GC> the best effort net will be a black hole that burns up
GC> capital because, for many players, the OPERATIONAL expense is
GC> more than they get for bandwidth never mind cap-ex.

Definitely true about opex and capex... but I'm not convinced
that QoS is the magic bullet that will make the marketplace big
enough and profitable enough.  I don't see service offerings
fixing the woes of screwball pricing.


GC> best effort won't go away.  many best effort players will.

If all best effort players provided QoS/guaranteed services,
would the survival rate be significantly higher as a result?


GC> for the time being, best effort bandwidth prices as an
GC> absolute commodity cannot sustain networks over the long
GC> haul.  A network that can deliver QoS the report hypothesizes
GC> may be able to attract enough revenue to become profitable.

That's where I'm not convinced.  Current IP delineates the lower
reliability boundary and a benchmark price point.  Premium
services won't have a lower cost than best-effort, so they must
sell for more.  Would the incremental service improvements be
high enough to draw customers away from cheap BE _and_ support
"sufficient" margins?

First class hasn't stopped the cycle of airline bankruptcies and
government bailouts.  I don't see "first class data" as much
different.


GC> How to to this my group is still discussing.  We don't
GC> pretend that QoS is easy or any kind of mature collection of
GC> technologies, but increasingly it looks as though the
GC> industry, if it is ever going to be self sustaining, really
GC> needs to look at QoS services and solutions.

Perhaps, but only if the price is right.  DSL sells better than
Internet T1 lines, which sell better than end-to-end private
lines and packet clouds.  There's a reason for that.


Eddy
--
EverQuick Internet - http://www.everquick.net/
A division of Brotsman & Dreger, Inc. - http://www.brotsman.com/
Bandwidth, consulting, e-commerce, hosting, and network building
Phone: +1 785 865 5885 Lawrence and [inter]national
Phone: +1 316 794 8922 Wichita
_________________________________________________________________
          DO NOT send mail to the following addresses :
  blacklist@brics.com -or- alfra@intc.net -or- curbjmp@intc.net
Sending mail to spambait addresses is a great way to get blocked.





Discussion Communities


About Merit | Services | Network | Resources & Support | Network Research
News | Events | Contact | Site Map | Merit Network Home


Merit Network, Inc.