What is a Browser?

[Darren Dirt]

Forget about being able to tell what a browser is, how about people who can't tell when they're not on Facebook. (read the comments section then re-read the bolded text in the article and let it sink in for a minute)

^ the above is mentioned in "#2" of "5 Reasons The Internet Could Die At Any Moment"
http://www.cracked.com/article_18453_5-reasons-internet-could-die-at-any-moment.html

Great list btw... not nearly as funny as the typical Cracked. And that tells you something -- they intentionally kept it less silly than normal Because It's Just That Important.

[Tom]

The problem is that what we want out of this situation--cheap, infinitely scalable bandwidth--is the one outcome we can't have.

Well actually its the one that the ISPs don't /want/ us to have. But Bandwidth really is cheap. Compared to the service fees customers pay, its very cheap. How else to the big ISPs make billions in pure profit each year?

[Lazybones]

The problem is that what we want out of this situation--cheap, infinitely scalable bandwidth--is the one outcome we can't have.

Well actually its the one that the ISPs don't /want/ us to have. But Bandwidth really is cheap. Compared to the service fees customers pay, its very cheap. How else to the big ISPs make billions in pure profit each year?

Bandwidth isn't cheap, ISPs just super over subscribe lines because 90% of the users on the 10+mbit connections are just surfing facebook.. You really find out what bandwith costs when you go around trying to purchase lines with service SLAs where they can't over subscribe you and they know you are going to use the bandwith..

IN the states is is crazy expensive compared to Canada for high-speed business access.

[Tom]

The problem is that what we want out of this situation--cheap, infinitely scalable bandwidth--is the one outcome we can't have.

Well actually its the one that the ISPs don't /want/ us to have. But Bandwidth really is cheap. Compared to the service fees customers pay, its very cheap. How else to the big ISPs make billions in pure profit each year?

Bandwidth isn't cheap, ISPs just super over subscribe lines because 90% of the users on the 10+mbit connections are just surfing facebook.. You really find out what bandwith costs when you go around trying to purchase lines with service SLAs where they can't over subscribe you and they know you are going to use the bandwith..

IN the states is is crazy expensive compared to Canada for high-speed business access.

Just because they charge a lot doesn't mean its actually that expensive. They still make plenty of money off it all. Doesn't Telus still charge over $2000 for a single T1? You can't tell me a 1mb/s connection costs that much.

[Thorin]

So since this morphed into a discussion about bandwidth costs, what costs would you (not Tom specifically, but any of you) think an ISP has to pay for bandwidth?

Obviously, there's the cost of laying the cable, including fiber cable, splitters, switches, and the like.  That's capital costs, which are split over a certain number of years (aka depreciation).  From my days at a GIS shop that serviced the broadband market's drafting departments, I can tell you all that stuff is called inside and outside physical plant, the differentiator being whether it's behind a fence or not.  They break it down further, but the accountants just lump it all together under Capital Costs - Physical Plant.

So what else is there?  Well, you have to pay all those employees.  Employees to install new physical plant and maintain existing physical plant, employees to help customers, employees to handle billing, employees to help other employees figure out their benefits, employees to advertise the business, etc.

And of course there's all the equipment the employees use.  Vans for the technicians to drive around, computers and desks for the office workers, the company jet for the CEO.

So add that all up.  That's your cost.  Now figure out the actual cost of bandwidth, determine how many megabits could be transferred on all physical plant in one second at top speed.  Divide that speed by the cost, and you get your actual cost per megabit.

Of course, that formula doesn't take into account that much of the time the physical plant will not be utilized at anywhere close to top speed, so you need to price your bandwidth so that at the slower speed you expect it to be used at, you still make a profit.

And there's the problem.  If a company such as Telus puts a 10 megabit line to my house, that line has a fixed cost.  If I only browse web pages and thus only use 0.05 megabits per second on average, their cost is the same as if I had multiple torrents running and used 10 megabits per second.  In other words, the heavier I use the connection, the cheaper it is per megabit for them.

So what they do instead is put a whole bunch of customers on a shared line, hoping that the line will get fully utilized, in turn giving them the lowest per-megabit cost.  Of course there's a tipping point where if too many customers are on the shared line they start complaining about slow speeds, and then the company incurs the cost of customers leaving to greener (faster) pastures.

My point is, the theoretical cost of bandwidth is quite low when looking at dollars per megabit per second.  The problem that ISPs face is that their network isn't fully utilized, but instead sees spikes and dips, and to keep their customers happy they need to build out their network to handle the spikes, which then increases the capital costs.  In other words, there's the actual cost of bandwidth, to which is added the cost of lost revenue on unused bandwidth.

It sure isn't a simple A + B = C equation.

That all being said, I was quite surprised at how poor customer service used to be at Telus back when we used them.  Almost like they didn't realize that making customers unhappy meant losing customers, and losing customers meant revenue went down while costs could not be reduced (you can't sell physical plant, usually), which in turn meant less (or no) profits.

[Darren Dirt]

So since this morphed into a discussion about bandwidth costs

Personally, I think the Cracked article linked above is really though-provoking, especially #2:

What we're seeing now is a variation of the strip-mall effect as seen in countless small towns in the U.S.

If you don't remember learning about the strip-mall effect in high school economics, basically big-box retailers run small Mom and Pop stores out of town by offering lower prices than the independent outlets can possibly match. Instead of the "Main Street, U.S.A." full of independent Mom and Pop niche stores, we have a ton of strip-malls filled with Wal-Mart stores and other chains.

This ultimately changed the way people shop. No one was going to walk from Laura's Bakery to Smith and Sons Light Bulbs to Barney's Pantstravaganza when they could get all of their shopping done with one trip to Wal-Mart. So not only were the old stores run out of business, but it became pointless to ever open a new one. The flow of shopper traffic had forever been diverted.

The same thing is happening on the Internet, with sites like Facebook taking up the role of big-box retailers. For instance, in order to make themselves more attractive to advertisers, Facebook put together an initiative called Facebook Connect. It allows users to sign into Hulu, Digg and more with the same ID they use to log into Facebook.

By linking their user accounts together, all of these websites have managed to create a "closed" environment, a one-stop Internet mall that provides them with an endless feedback loop of traffic. Sort of like a circle of snakes, all eating each other's poop. This works out great for the giant, well-funded websites already in on the party, but not-so-great for the "lone guy in his bedroom with a vision" sites that made the Web great in the first place.

Facebook now has 300 million users. For a lot of those people, Facebook is the Internet, and they're happy to do all of their information shopping there. A great and terrifying illustration came when this blog mentioned Facebook logins in an update. When (presumably old) people Googled "Facebook Login," the blog showed up in their results, bombarding them with thousands of people saying "IS THIS FACEBOOK WHY DOES IT LOOK DIFFERENT HELP I JUST WANT TO LOG IN."

And it's not just about traffic. All of the detailed information Facebook can provide to advertisers about your life (and they know everything at this point) means they can make advertisers an offer they can't refuse. The fear is that soon all those indie sites trying to make enough money to stay alive outside of the Facebook Mall will find the going harder than it already is.

This isn't Facebook's fault, it's not like they're using sweatshop labor or sticking a gun to competitors' heads. They're offering a comfortable path for people who find the Internet scary and confusing. If they hadn't done it, somebody else would have.

If you compare the rate of the Internet's overall "change" in focus from the mid 1990s to say the early 2000s, it's a snail's pace compared to the last 5 years... I wonder if there really WILL be such a homogenization that "#2" above depicts... and how sad for the next generation, for the webernet will become just like network TV, the playground of the rich and powerful, while the peons and lazy folks can do practically nothing but observe and consume, instead of interacting and creating.




and, speaking of serious thought-provoking stuff at Cracked, WOW, even the media-skeptical folks like me might be surprised by these subtle manipulations of truthiness... (I was)
http://www.cracked.com/article_18458_6-subtle-ways-news-media-disguises-bull@%&#-as-fact.html