Its not a cartel, Telecom is the cartel, its just plain cheaper and more reliable to do it yourself, at scale.
This should be played against the background of a lot of transit providers being consumed into the twin blackholes of GTT and Level3.
Dealing with them is a massive massive pain. They are almost always universally incompetent.
Then there are peering agreements. In the US its all a bit wonky, as it costs to do anything. As far as I'm aware there are no coop style internet exchanges, which means that peering is prohibitively expensive.
else where, in normal land, most places are coops, which means you pay a small fee and negotiate peering directly with other peers.
Given that with the concentration of traffic around 4/5 company's datacenters it makes perfect sense to tap directly into those.
Having a complete network under your control, with your QoS working globally right up to the last mile, is a worthy goal. Being <10ms away from 90% of your customers is worth the cost.
I think it's a bit far fetched to describe the current situation as a cartel. First, what is the function of a cartel? It's to coordinate supply to keep prices high. Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly. Second, the reason they are taking positions / building their own is that there isn't a business case to build these cables without them.
> I think it's a bit far fetched to describe the current situation as a cartel.
Well, they did specifically say it's not a cartel. Yet. I interpreted the article as an early warning to prevent them from becoming a cartel, as the author believes they have the capability to become one if they decide to.
> First, what is the function of a cartel? It's to coordinate supply to keep prices high.
No, it's to coordinate to keep profits high. Prices could fall, but less quickly than they would otherwise, and it could still be due to coordinated action. One example is if costs are falling quicker than prices, and prices drops are delayed or reduced. If consumers are hurt because they've altered the economics of the market to prevent competition, that would qualify for me.
> Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly.
Theoretically, they could make the market economics of new cables harder to justify, while keeping enhanced capability for themselves. Does affecting the world market to the degree that it would take a nation state to have enough money to change the status quo enough to allow competition in the data transit space count as anti-competitive? It may be that the term encompasses a lot more behavior when applied at that scale.
Do the companies in question have enough resources and power to affect the global market in that way? I have no idea. It sounds crazy, but it feels like there's more consolidation of power in these companies (with regard to online content) than other industries have had in the past, and with an industry that's as large and lucrative as this, that seems to make them somewhat unique. The dark horse here might end up being China. If there was a cartel, China would have the capability and motive to bust it eventually. Of course, if the markets China wanted to reach were politically denied from specialized lobbying, that could counter them...
The industry as a whole has been trying to do this by attacking net neutrality. Things like metered plans create artificial scarcity and allow companies to increase the price of switching packets.
>Second, the reason they are taking positions / building their own is that there isn't a business case to build these cables without them.
They can, you know, contract it to an independent company. That's how most businesses in the world operate.
We're moving towards a world where Google can potentially control your computer (Android/Chromebook), your internet connection (Google Fiber), the backbone cables (article), your content (YouTube, etc) and your servers (to some extent). They are already entrenched in some of those markets.
Back in the day telcos used to collaborate on laying cables and in fact owned ships.
Working for BT I found that there was a a whole other set of contracts and company procedures just for those employees who worked on the cable laying ships.
One benefit of all these Low Earth Orbit satellite megaconstellations is they can completely bypass terrestrial internet backbones. Starlink and Telesat LEO in particular. And (in principle) get lower latency to servers on the other side of the planet due to the faster speed of light in vacuum vs glass (and perhaps a more direct route).
It’s not just the faster speed in vacuum vs glass, but the route can be a lot more direct.
An undersea cable will go through (or around) all kinds of trenches or peaks because the sea bed isn’t flat. And it needs to have some stress relief imperfect routing to handle shifting.
I don't think this is a cartel. Big users of data decided "we don't want to pay the price that the owner of the cable is offering, so we'll just build our own." Then they built their own.
The issue with an over-build first approach to competition is visible with airlines. If you see that a particular handful of routes are highly priced, you can set up your own airline. But the incumbent can just drive you out of business with their other markets and bankrupt you.
Then nobody risks trying to take you on again.
It's nice that big users of data may be bigger than the telecoms, but when that isn't the case, the market fails when building your own links on a larger network of oligopolists.
IMHO having more players in this market, which so far is dominated by state operated telcos and de-facto monopolists like AT&T is actually improving things. The more independently operating companies there are operating their own cables, the more room there is for free market to operate.
That being said, I do believe the notion of big corporations with pre-existing near monopolies on e.g. search or online retail with yearly revenues exceeding the gross national product of most nations on this planet, is not necessarily good for a free market. There have been some demands for some of these companies to be broken up and IMHO that would actually be a good thing. Calls for that are only going to get stronger.
> The more independently operating companies there are operating their own cables, the more room there is for free market to operate.
> That being said, I do believe the notion of big corporations with pre-existing near monopolies on e.g. search or online retail with yearly revenues exceeding the gross national product of most nations on this planet, is not necessarily good for a free market
To me, those two statements sound contradictory. Do you want a "free market" or don't you? If it's a free market, you have to expect that the organizations with the deepest pockets that stand to gain the most from larger internet pipes are going to be the ones to invest in it.
I'm certainly no expert, but it seems to me that the more ideal situation would be that core infrastructure like the internet is driven primarily by public money. The obvious argument against that is maybe it won't grow as phenomenally fast as it has, but maybe we don't really need to be able to stream those 4K cat videos when, like you said, in doing so we're empowering for-profit organizations to grow larger than the GDP of many nations.
> There have been some demands for some of these companies to be broken up and IMHO that would actually be a good thing.
Does it really matter if we have an excess of capacity when incumbents own the last mile and prevent open peering close to home and/or charge ridicious per mbit prices for transit or private peering. A little up the ladder for example you can already get HE in AUS https://pop.he.net/?country=Australia so think sub $1/mbit pricing but its all pointless* as 90% of the eyeball ISPs won't peer with them. *pointless is an exaggeration but doesn't help content providers or end users
Obligatory reference to "Mother Earth Mother Board," one of the all-time best pieces of long-form tech writing, Neal Stephenson's gonzo journalism exploration of undersea cable laying.
"Our method was not exactly journalism nor tourism in the normal sense but what might be thought of as a new field of human endeavor called hacker tourism: travel to exotic locations in search of sights and sensations that only would be of interest to a geek."
Id also recommend Cryptonomicon by Stephenson. Undersea cables is a major subject in the novel. It also touches on many things that have become relevant today despite the book being written 1999 (cryptocurrency, encryption, etc). https://www.goodreads.com/book/show/38897904
As soon as the monopoly will be in place, a decentralized multiple-media network based on a distributed privately handled network infrastructure will be already available. I am working on this problem since 2010, see PJON: https://github.com/gioblu/PJON
And will that network include undersea cabling, satellites, or some equivalent means of global connection? I doubt it: these are all extraordinarily expensive. Even the cheapest approach imaginable - say, a series of network repeaters on rafts - is still quite expensive, not to mention incredibly brittle.
I'm all for distributed networks, local meshes, and other initiatives to reduce network hardware centralization. That said, these are not perfect substitutes for a global network. For instance: I'm based in Canada, and my work currently deals with digital service deployment in government. As part of that work, I occasionally need to refer to the UK's Government Digital Service (GDS) website. No amount of local network infrastructure can help me do that: I rely on the trans-Atlantic cables to access this.
Now, you could imagine mirroring the GDS website across a number of these local distributed networks, forming what is in essence a CDN under distributed ownership. That might help me right now, but: in a network monopoly world, how would you mirror content on an ongoing basis in the first place? Who would maintain such a mirror? How would you pay for the immense storage requirements? (Or, failing that, how would you decide which corner of the Internet to mirror?)
Between 2016 and 2020 about 100 new cables have been laid or planned. The primary reason for new cables is the demand for bandwidth. But it is difficult to pinpoint the source of this demand.
[+] [-] KaiserPro|7 years ago|reply
This should be played against the background of a lot of transit providers being consumed into the twin blackholes of GTT and Level3.
Dealing with them is a massive massive pain. They are almost always universally incompetent.
Then there are peering agreements. In the US its all a bit wonky, as it costs to do anything. As far as I'm aware there are no coop style internet exchanges, which means that peering is prohibitively expensive.
else where, in normal land, most places are coops, which means you pay a small fee and negotiate peering directly with other peers.
Given that with the concentration of traffic around 4/5 company's datacenters it makes perfect sense to tap directly into those.
Having a complete network under your control, with your QoS working globally right up to the last mile, is a worthy goal. Being <10ms away from 90% of your customers is worth the cost.
[+] [-] mattrp|7 years ago|reply
[+] [-] kbenson|7 years ago|reply
Well, they did specifically say it's not a cartel. Yet. I interpreted the article as an early warning to prevent them from becoming a cartel, as the author believes they have the capability to become one if they decide to.
> First, what is the function of a cartel? It's to coordinate supply to keep prices high.
No, it's to coordinate to keep profits high. Prices could fall, but less quickly than they would otherwise, and it could still be due to coordinated action. One example is if costs are falling quicker than prices, and prices drops are delayed or reduced. If consumers are hurt because they've altered the economics of the market to prevent competition, that would qualify for me.
> Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly.
Theoretically, they could make the market economics of new cables harder to justify, while keeping enhanced capability for themselves. Does affecting the world market to the degree that it would take a nation state to have enough money to change the status quo enough to allow competition in the data transit space count as anti-competitive? It may be that the term encompasses a lot more behavior when applied at that scale.
Do the companies in question have enough resources and power to affect the global market in that way? I have no idea. It sounds crazy, but it feels like there's more consolidation of power in these companies (with regard to online content) than other industries have had in the past, and with an industry that's as large and lucrative as this, that seems to make them somewhat unique. The dark horse here might end up being China. If there was a cartel, China would have the capability and motive to bust it eventually. Of course, if the markets China wanted to reach were politically denied from specialized lobbying, that could counter them...
[+] [-] yummypaint|7 years ago|reply
[+] [-] gambler|7 years ago|reply
They can, you know, contract it to an independent company. That's how most businesses in the world operate.
We're moving towards a world where Google can potentially control your computer (Android/Chromebook), your internet connection (Google Fiber), the backbone cables (article), your content (YouTube, etc) and your servers (to some extent). They are already entrenched in some of those markets.
[+] [-] UweSchmidt|7 years ago|reply
https://en.wikipedia.org/wiki/Natural_monopoly
[+] [-] C1sc0cat|7 years ago|reply
Working for BT I found that there was a a whole other set of contracts and company procedures just for those employees who worked on the cable laying ships.
[+] [-] tgsovlerkhgsel|7 years ago|reply
> Don’t worry though — we are nowhere near such a scenario. Yet.
[+] [-] ionised|7 years ago|reply
[+] [-] Robotbeat|7 years ago|reply
[+] [-] Scoundreller|7 years ago|reply
An undersea cable will go through (or around) all kinds of trenches or peaks because the sea bed isn’t flat. And it needs to have some stress relief imperfect routing to handle shifting.
[+] [-] walrus01|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] 420codebro|7 years ago|reply
[deleted]
[+] [-] jrockway|7 years ago|reply
[+] [-] Scoundreller|7 years ago|reply
Then nobody risks trying to take you on again.
It's nice that big users of data may be bigger than the telecoms, but when that isn't the case, the market fails when building your own links on a larger network of oligopolists.
[+] [-] jillesvangurp|7 years ago|reply
That being said, I do believe the notion of big corporations with pre-existing near monopolies on e.g. search or online retail with yearly revenues exceeding the gross national product of most nations on this planet, is not necessarily good for a free market. There have been some demands for some of these companies to be broken up and IMHO that would actually be a good thing. Calls for that are only going to get stronger.
[+] [-] samcday|7 years ago|reply
> That being said, I do believe the notion of big corporations with pre-existing near monopolies on e.g. search or online retail with yearly revenues exceeding the gross national product of most nations on this planet, is not necessarily good for a free market
To me, those two statements sound contradictory. Do you want a "free market" or don't you? If it's a free market, you have to expect that the organizations with the deepest pockets that stand to gain the most from larger internet pipes are going to be the ones to invest in it.
I'm certainly no expert, but it seems to me that the more ideal situation would be that core infrastructure like the internet is driven primarily by public money. The obvious argument against that is maybe it won't grow as phenomenally fast as it has, but maybe we don't really need to be able to stream those 4K cat videos when, like you said, in doing so we're empowering for-profit organizations to grow larger than the GDP of many nations.
> There have been some demands for some of these companies to be broken up and IMHO that would actually be a good thing.
At least we're in 100% agreement here!
[+] [-] sdfsdfsdfsdf3|7 years ago|reply
[+] [-] godelmachine|7 years ago|reply
Aren’t they already a cartel, having divided the oceanic territories & protecting each other’s vested interests?
[+] [-] kwindla|7 years ago|reply
"Our method was not exactly journalism nor tourism in the normal sense but what might be thought of as a new field of human endeavor called hacker tourism: travel to exotic locations in search of sights and sensations that only would be of interest to a geek."
https://www.wired.com/1996/12/ffglass/
[+] [-] jds375|7 years ago|reply
[+] [-] grendelt|7 years ago|reply
[+] [-] CrucialTaunt|7 years ago|reply
[+] [-] 4ntonius8lock|7 years ago|reply
[+] [-] kingkawn|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] fosco|7 years ago|reply
[+] [-] gioscarab|7 years ago|reply
[+] [-] candu|7 years ago|reply
I'm all for distributed networks, local meshes, and other initiatives to reduce network hardware centralization. That said, these are not perfect substitutes for a global network. For instance: I'm based in Canada, and my work currently deals with digital service deployment in government. As part of that work, I occasionally need to refer to the UK's Government Digital Service (GDS) website. No amount of local network infrastructure can help me do that: I rely on the trans-Atlantic cables to access this.
Now, you could imagine mirroring the GDS website across a number of these local distributed networks, forming what is in essence a CDN under distributed ownership. That might help me right now, but: in a network monopoly world, how would you mirror content on an ongoing basis in the first place? Who would maintain such a mirror? How would you pay for the immense storage requirements? (Or, failing that, how would you decide which corner of the Internet to mirror?)
[+] [-] tgp22|7 years ago|reply
Memes i say. Memes.
[+] [-] trentino2|7 years ago|reply
[+] [-] wnevets|7 years ago|reply
[+] [-] Piezoid|7 years ago|reply