there are already companies like Vyatta that represent the nascent part of this space, at least on the software/equipment side.
-----Original Message----- From: owner-nanog@merit.edu [mailto:owner-nanog@merit.edu] On Behalf Of michael.dillon@bt.com Sent: Friday, January 18, 2008 1:17 PM To: nanog@nanog.org Subject: RE: An Attempt at Economically Rational Pricing: Time Warner Trial
The problem in the ISP industry isn't lack of usage based pricing. It's that the going rate for basic connectivity was driven below that which is economically sustainable by the ILECs when they engaged in predatory pricing to drive the CLECs out of business in the late 90s. Now that they own the market, they find that, having driven the prices down, they can't raise them, so they are engaging in various subterfuges that are designed to cover up the basic thing they are doing: trying to charge more for the exact same service.
Sooner or later, somebody is going to try to apply Google's approach to hardware in a network backbone. Imagine a network backbone with no Cisco or Juniper boxes in it, just lots of commodity boxes with triple-redundancy everywhere (quintuple in NFL cities).
Vadim Antonov tried to build something like this into a backbone router, but the market for IP backbone equipment is so incredibly conservative, and the pricing was up there with the big boys, so he never had a chance at it.
I don't know if Google is doing something like this between their data centers, but I think that the fundamental price of fiber is low enough that with commodity router/switches and triple the fiber miles, we can have a reliable IP packet moving service without jacking prices up.
Even if prices do go up, it will be a short term thing because sooner or later, Google, or somebody who thinks as bold as they do, will build a true commodity packet-moving service, and the telecoms industry will fall back into the razor-thin margin utility sector where it belongs.
I'm sure many of you will think I am crazy because you know just how much those high-speed ports cost and you can't see any letup in bandwidth growth. But the fact is that ports are not the fundamental components of routers. Chips are, and as we all know, chips keep getting smaller, cheaper, faster and more powerful. FPGAs, SOCs, multicore CPUs and so on. The company that cracks the Internet utility problem might even design and build their own devices rather than outsourcing that, at a high price, to the benevolent vendors.
--Michael Dillon