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[ NNSquad ] FW: [IP] British Telecom says bandwidth costs [price!] unsustainable. True?



From: Bob Frankston [mailto:Bob19-0501@bobf.frankston.com]
Sent: Wednesday, September 24, 2008 10:34
To: 'dave@farber.net'; 'ip'
Cc: 'Dave Burstein'
Subject: RE: [IP] British Telecom says bandwidth costs [price!] unsustainable. True?


Dave B, thanks for providing these quotes. Davis seems to confuse cost with price. It’s the price that is not sustainable.


A wonderful quote “Today there are a number of unsustainable business models out there, and these need to change, Davis insisted.”


She 100% right – telecom is not a sustainable business model. Of course she’s not the first – the cellular world is living in fear of abundance too.


What should BT do if it’s business model is not sustainable? In this age of bailout should she continue to try to maintain control and expect a bailout while inflicting grave harm on the economy by limiting the ability to create new value or should she take responsibility and negotiate an exit strategy that might leave her shareholders with some money? I consider the continued insistence that BT can maintain control to be a form of kiting – piling up problems in hope that the future will never arrive – just like the mortgage traders did.


Alas for now she’s threatening the economy with drastic measures like traffic shaping that will starve the economy just at the time when it can hardly afford it. So the choice is whether her shareholders will lose money or all of our money will (continue to) lose value? Neither outcome is great for them but one does more harm to the public.


When Kathryn Morrissey say “There won't be just one model, "there will be room for many models,"  does this mean that she is willing to sell raw capacity even if it threatens the ability of other parts of ATT to charge a high price for transporting bits?



-----Original Message-----
From: David Farber [mailto:dave@farber.net]
Sent: Wednesday, September 24, 2008 03:11
To: ip
Subject: [IP] British Telecom says bandwidth costs unsustainable. True?




Begin forwarded message:


From: Dave Burstein <daveb@dslprime.com>

Date: September 23, 2008 9:33:28 PM EDT

To: dave@farber.net

Subject: British Telecom says bandwidth costs unsustainable. True?



Sally Davis at BT just gave a speech (below) saying BT might have to 

block the iPlayer and other Internet video because their bandwidth 

costs are unsustainable. Other carriers, like Verizon, say they have 

no problem handling the video load, nor expect to have a problem. So 

I'm sending her comments over to see if anyone can provide evidence on 

why BT's experience is different or that Davis' comments are unproven 

hyperbole. It's especially surprising to hear BT's 21st Century 

Network, (superbly designed by superb engineers) is inadequate. Key 

competitor Sky just pulled off all limits on their $20 broadband 

service, saying,"it had invested in creating 'a high-capacity network 

that is designed to carry huge amounts of traffic without congestion'” 

without traffic shaping. I've written BT to doublecheck the reporter 

got it right, but the quotes are pretty clear.


    So am I missing something unique to the UK, or are Ms. Davis' 

comments unfounded? Facts welcome.


Wholesale giants say Internet will no longer be free

... the answer could be to restrict "free" access to services like the 

BBC's iPlayer that allows users to stream BBC TV content over the 

Internet ... "One thing keeps me awake at night. In the immortal words 

of Jerry McGuire 'show me the money!'," said Sally Davis, CEO of BT 

Wholesale. ... Today there are a number of unsustainable business 

models out there, and these need to change, Davis insisted.

... the ISPs are saying "I can't keep increasing the bandwidth for no 

more money," Davis said, a situation that will ultimately lead to ISPs 

adopting traffic shaping measures and the like to keep control of 

bandwidth usage on their networks. ...

"We're going to have some very grumpy people," namely the content 

owners and end-users, said Davis.

As such, "we have to find new ways around it… Content distribution 

models will play a role in that," Davis said. "We will see those 

business models emerge," but more work needs to be done, she cautioned.

... "In the next three years… we will see some different models 

emerge," said Davis, a prediction that was greeted with some 

scepticism from others in the auditorium.


There won't be just one model, "there will be room for many models," 

agreed Kathryn Morrissey, EVP at AT&T Wholesale.


"Somebody at some point is going to have to pay for [this network 

usage]," she said.








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