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: Google seeks GoogleNet bids?

  • From: Tom Vest
  • Date: Tue Sep 20 08:40:04 2005

On Sep 20, 2005, at 5:43 AM, Michael.Dillon@btradianz.com wrote:

I'm kind of surprised that I hadn't seem mention of it
here before now, but Om Malik points out in his blog that
Google is reviewing bids for it's natioal DWDM network:

 http://gigaom.com/2005/09/19/google-asks-for-googlenet-bids/
There seems to be a trend whereby anyone who can aggregate
sufficient traffic to warrant their own IP network is doing
so and offloading the so-called public Internet. In the case
of Google it is reminiscent of the way the television networks
aggregated broadcast content way back in the 60's.

Ten years ago, the idea that there could be a public Internet
which anyone could use for any purpose was rather new. Is this
concept now on the decline?

--Michael Dillon
The chief tradeoff here is not "public" vs. "private", but rather returns to layer 1/2/3 transport vs. returns to content and end-user services.

Barring regulatory impediments, every content provider that reaches a certain size ultimately concludes that outsourcing transport is suboptimal -- either too expensive, too variable, or too restrictive.

The "certain size" that they have to reach is largely determined by the ratio of transport outsourcing costs (opex) to infrastructure ownership costs (capex), which vary differently with scale (security concerns, service type/vulnerability, and tax laws also affect the tipping point).

Once ISPs cross that threshold they build, and once they build they start thinking about all of the other content and services that they might deliver with this new capability. AOL, MSN, Yahoo, and now Google are just a few obvious examples.

It works the other way also. Sometimes changes in technology, telecom law, or tax policy cause the service/infrastructure ratio to flip, and you get infrastructure divestitures. The 1996 Telecom Act opened up the wholesale access segment to many more/new players, and dramatically reduced the costs and difficulty of reaching dial customers. That prompted many operators to enter the transport business, but others to divest. Arguably the whole Internet thing itself was a product of a similar flip in 1984, when the US "value- added services" sector was created by regulatory fiat and set apart from the regulated basic access telecom segment.

Huge improvements in the cost and availability of transport over the past five years have resulted in a massive expansion of the infrastructure insourcing group (visible by the accelerating demand for ASNs). I think of this as a kind of democratization of control over transport. Did this trend undermine the "public Internet"? I don't really see how.

No doubt the massive shift in US telecom law currently underway will also have a major effect on these patterns. However it won't be some idealized "public Internet" that will shrink as a result, but rather the segment of the Internet that is not directly controlled by incumbent, facilities-based access network owners. Whether or not this latest shift represent a good thing or a bad thing remains to be seen -- however the examples of other countries that are dominated by facilities-based telco-ISPs certainly doesn't not inspire much optimism.

Tom







Discussion Communities


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


Merit Network, Inc.