A new report from TeleGeography finds that bandwidth prices for backbone transit continue to decline rapidly across the globe. In San Francisco, for instance, the price per mbps of Gigabit Ethernet transit has dropped 38 % in the past 12 months. Developing countries are also enjoying substantial price cuts in 15 to 20% range.
But if the Internet’s core is controlled by an oligopolistic cartel—as Tim Wu argued in a recent New York Times essay—then why does bandwidth keep getting cheaper?
Perhaps it’s because the fourteen or so firms which offer backbone IP transit are competing fiercely to win over business from smaller carriers and enterprises. And as businesses of all sizes demand faster connectivity, more dark fiber is being lit, creating an expansion in network capacity. In DC, for instance, a price war has made high-speed commercial data services much more affordable, with one communications provider offering converged 10mbps full-duplex dedicated Ethernet over copper for less than the market price of four bonded T1 lines.
Why are some providers moving towards data transfer caps if bandwidth prices are dropping ? In part, it’s because backbone transit is not the only usage-variable expense that residential ISPs face. Last-mile bandwidth remains a highly contested resource in many neighborhoods, and the cost per megabit of bringing faster speeds to the doorstep far exceeds the cost of adding more wavelengths to a long-distance fiber optic line. As consumers demand greater speeds, providers are investing heavily in network upgrades—these costs are adding up, and there’s a strong case to be made that heavy users ought to shoulder a larger portion of the burden than light users.
From ACU’s new issue of Battleline. ACU board member Joe Morris contributes an email from our new economic Czar:
My Dear American Friend
Issue 117 – October 8, 2008
MY DEAR AMERICAN FRIEND:
I AM NEEDING TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.
I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED NEED FOR LARGE TRANSFER OF FUNDS OF 700 BILLION OF YOUR DOLLARS ( US). IF YOU WOULD ASSIST ME IN THIS TRANSFER IT WOULD BE MOST PROFITABLE TO YOU.
I AM WORKING WITH HIGHLY REPUTABLE MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY IF MY POLITICAL PARTY WINS UPCOMING ELECTION, WHICH WE CERTAINLY WILL BECAUSE WE ARE IN CONTROLING OF THE HIGHEST SUPREME COURT. YOU MAY REMEMBER HIM AS A SENATOR AS LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S.
I AM ALSO WORKING WITH HIGHLY REPUTABLE MR. BARNEY FRANK, MEMBER OF CONGRESS FROM PEOPLE’S REPUBLIC OF MASSACHUSETTS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY IF OTHER POLITICAL PARTY, LED BY MR. BARACK OBAMA, WIN UPCOMING ELECTION, WHICH HE CERTAINLY WILL BECAUSE HE IS IN CONTROLLING OF VOTING IN ILLINOIS, OHIO, FLORIDA, AND MANY OTHER STATES. MR. BARNEY FRANK IS VERY KNOWLEDGEABLE ABOUT FINANCIAL TRANSACTIONS OF ALL KINDS, FROM WHOREHOUSE ADMINISTRATION TO HOME LOAN BUSINESS, AND FAITHFULLY TEACHES PRECEPTS OF MR. BARACK OBAMA (“FROM TINY A.C.O.R.N. GROWS GIANT FORECLOSURE OAK!”).
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The financial crisis currently consuming the U.S. has led tech industry leaders, such as Microsoft’s Steve Ballmer, to speak out in favor of quick Congressional action. Tech stocks, as well as general stocks, have plummeted, and there is confusion over why this crisis is happening and spreading so fast. One explanation that makes a lot of sense draws on network and information theory.
“[The U.S.] market economy is nothing more than a vast, parallel-processing information network,” explains noted economist John Rutledge in his new book Lessons From a Road Warrior. Network theory, the examination of interconnected systems, can help us understand the current market crisis, because it can aid in identifying and understanding cascading information network failures.
When a “super node” in a network goes down, for example, it has the potential to take down the whole system, since these key nodes are connected to many others. Perhaps the most familiar crash of this sort is a power blackout. If a storm or accident takes down a single power line, it can lead to a power loss for a whole city. That type of crash, Rutledge explains, is exactly what is happening now.
[…]
Read more here.
Amanda got to go to the debate and has a report:
On my way through the security checkpoint, I asked the Secret Service officer if I should remove my belt before passing through the metal detector. He responded, very pleasantly: “Ma’am, this isn’t an airport.” We all got to keep our shoes, too.
This is a good article by Harvard professor Harry Lewis. He worries that the ease of spreading lies on the Net puts us at risk of losing “a thoughtful, analytical, educated citizenry, capable of sharing responsibility for the long-term welfare of the nation.” Here’s a excerpt from his piece:
“If he wins, Barack Obama is going to be sworn in on a Koran instead of the Bible. Trig isn’t Sarah Palin’s baby, it’s her daughter Bristol’s. Obama refuses to say the Pledge of Allegiance. Here’s the list of books Palin wanted to ban from the library …
All these claims — none of them true — turned up in the e-mail inboxes of millions of Americans this summer. In spite of both campaigns’ efforts to correct the record about their candidates, the rumors linger on and spread.”
I recently took over as Chairman of the Space Frontier Foundation, 
a citizens’ advocacy group dedicated to the opening the space frontier to human settlement. Established in 1988 to preserve the ideas of Dr. Gerard O’Neill, author of The High Frontier, the Foundation has worked to enable the fulfillment of O’Neill’s vision of humans living and working in space to the benefit of all humanity through:
- Cultural change—spreading awareness of the vast, untapped potential of space to make humanity richer, safer, healthier and freer;
- Supporting the growth of the entrepreneurial NewSpace industry; and
- Promoting government policies supports NewSpace.
I’m hosting an anniversary bash for Sputnik at my home, so if you’re interested in space—as a place, not just a government program—and happen to be in DC on October 4, please consider joining us. Just email me to RSVP and I’ll add you to the evite (berin dot szoka at gmail dot com).
(In case you were wondering: We’re working now to upgrade our rather outdated website. If you’d like to help, just let me know!)
Lately the good folks at Bureaucrash have really been giving us a lot of cool tech related podcasts. Last week they brought us an interview with Cory Doctorow. This week a guide to online privacy. Topics include:
Listen to it at Bureaucrash.com.
Britannica Concise Encyclopedia: def. monopoly
Exclusive possession of a market by a supplier of a product or service for which there is no substitute. In the absence of competition, the supplier usually restricts output and increases price in order to maximize profits.
How does this possibly apply to Google? Google hasn’t decreased output, prices have not skyrocketed, and clearly there are plenty of substitutes. Yet groups like the Association of National Advertisers are attacking Google, claiming Google has a monopoly because it “controls” 90% of search.
Okay. Google gets the lion’s share of search engine traffic. But controlling search doesn’t amount to controlling online advertising, not by a long shot.
We haven’t seen prices go up because the time people spend on search engines every day is minimal, amounting to only a handful of minutes. Google has successfully turned these few minutes a day into a machine that generates billions of dollars a year. Yet despite its powerful position in the search market, competition from outside of search is forcing Google to keep its rates low.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.