On Dec 16, 2010, at 2:24 PM, Nathan Eisenberg wrote: > The idea of buying colocation from a last-mile ISP to reduce that last-mile > ISP's costs seems (at first glance) to be a hysterically unfair proposition - > though it seems that incumbent ISPs may have great enough leverage to extract > this revenue if they really want to. Or am I off my rocker? > > What is in the best interests of the customer?
I think the balance here is: If you can buy wholesale IP for $X/meg from a generic provider that delivers the bits to all destinations vs Buying local IP for $Y (where Y>X) in the local network access, you will pay the $X rate. If there were some price advantage for the CDNs, I doubt the discussion would be happening at all. Some people call this "dumping", others call it market forces. I'm not sure debating the business merits here make sense, as I'm neither comcast nor a CDN, and all my data is based on similar 'backdoor' or 'whisper' comments over many years. I seriously doubt the CDNs care about much other than the price:quality ratio. Clearly what happened here was a business decision that has been dragged out too long in public. If you can't figure that out from this thread yet, you may not "get it" even if you saw an xls telling you the same thing. Most of the companies involved are publicly traded, read their 10-K's and extrapolate the costs and pressures. Either the costs involved here represent enough to be material and something to be noted in a filing at edgar, or they are people fighting over loose change. - Jared
