This post shall try to put down some myths about Fiber broadband.
Disclaimer :- These are views of a commerce guy and *not* a networking expert.
About a week back I read a blog post at a site called telecomtalk and was pretty turned off as it seemed to be putting up some myths and seemed a bit biased. While I do not know the firm in question or have met the owner by face I have had e-mail connection with him as he is supposed to put up a ISP service sometime in non-determinate future. I am going to take lot of what has been told therein and show through multiple anecdotes the wool that is put up over our eyes.
1. ISP’s are not stupid!
Current ISP’s – BSNL, Airtel, Tata, Reliance, MTNL – all play in billion dollar figures. Now to set a new ISP in India, one actually depends on their infrastructure for domestic as well as International backbone. Unless MG is going to fund few billion $$ in totally new (or say 70% +) of own infrastructure, we don’t see any good reason for players like Tata, Airtel or Reliance to actually support Hayai.
At the end of day, Hayai will be eating up end-users of Airtel (DSL). Why really Airtel would be interested in such a deal – even when we found CEO/COO of Hayai shouting publically on these companies.
While I totally agree that ISP’s are not stupid, it does not mean that ISP’s do not or would not take any means to give shitty services to users simply because they do know the users have nowhere to go. As far as why would they co-operate with any new ISP for bandwidth resale and peering would also become clear in a moment.
Let’s go back about 3-4 years back where cellular services had just come into India. It was the same scenario where all the cellular operators were saying/claiming high costs including BSNL,Bharti and IDEA (the big boys). At that existing point in time the charges were Rs. 16/- per minute and if you look at the balance sheets they were claiming as being into red. All this info. is in public domain.
then a relatively unknown entity (at least in the cellular business) by the name of Reliance Communications jumped into fray and many people had the same issue. It was not that nobody knew Dhirubhai Ambani or his sons and their project management skills but it seemed far-fetched at that time that they had the project execution capabilities and know-how needed to stay for good in the Cellular business. This was questioned in almost all the financial papers and the magazines at the time as it did not relate to any of the existing businesses and everybody knows/knew it needs a lot of money, both in capital as well as revenue expenditure. Another thing to note was that it was a pure CDMA play rather than the prevailing majority GSM businesses which most of the providers were giving at that time. Reliance launched at Rs. 1/- per minute with a bang and although it shouldn’t have had any effect (as they were in CDMA exclusively that time and it has its disadvantages) it did as many new customers flocked to it and the providers had to reduce their prices to attract to them. A part of the Reliance deal was also that people will get low-cost handsets (IIRC something around the range of Rs. 500/- or so) a.k.a bundling which also got them lot of customers as well.
Cut to 2011 and now we have one paise per second by most of the service providers.
There are/were several reasons for the same. One of the big reasons is the passive and active sharing of infrastructure between competitors. In fact, the Indian companies became the leading proponents of the benefits of infrastructure sharing and now it is acknowledged methodology and is being replicated worldwide.
Other less popular ideas as pushing ads to users in one way or the other, cheating users by charging for services not asked for or/and charging users more than they say, under-reporting of revenues for taxation all sorts of stuff done to augment monetary resources apart from other ideas.
So, for companies like Airtel and TATA Communications it would be commercial deal and I am pretty sure they would be in similar deals with smaller ISP’s that is not known or talked about in public domain.
The other part is this sort of stupidity is not just done by our ISP’s but ISP’s all over. Just see the recent AT&T’s 250 GB data cap news which has had lot of negative impact as far as general populace is concerned.
2. When BSNL, Tata, Airtel all seems failing depite of fact they have ton of money to invest, we don’t see any cool thing in Hayai buildup, thus it’s hard to believe how MG claims to build last mile network.
Well, if you look in public domain records you would find that most of the ISP’s through their lobbying group ISPAI as well as individually have conveyed that it does not make sense for them business-wise to put fiber unless and until they have 10 odd years exclusivity to some geographical area. The deal would be something like this, one private ISP apart for BSNL/MTNL would have permission to lay fibers and the areas would be served by both of them.
More recently, there has been a proposal to have a nationwide fiber layout plan and the way things are going I’m pretty sure it will be buried. There are enough vested interests who would like to see the status quo be as it is. People have been pushing for open access for ages but have got nowhere till date (in India).
MG constantly excites people with so-called “Hayai zone” and he plans to run file sharing related stuff like torrent tracker + DC++ hub.
Well in real world, over 95% of torrents and p2p traffic via dc++ is for pirated/copyrighted content like movies, porn, softwares, etc. Do you think Indian govt. is sleeping that much that it will let MG to allow such stuff on his network at 1Gbps?
Downloading a movie in just 1second! Sounds good in technical terms, in real world absolutely no way. If that was possible, BSNL/MTNL would have done that much earlier. It costs almost nothing for BSNL to send traffic within it’s own network and if it charges say 2-10Rs for every such GB transfer, it would be still making a lot of money.
Say BSNL comes with (additional) plan to get 10Mbps speed within it’s network for just 5Rs/GB. In that one can download a movie within 10mins?
They are forgetting quite a few things there. One of the big things is there are enough legal torrent downloads which would make users more than happy. Hell, even if say Google were to put up a server on say MG and the we, the users would have the option to upload videos to Youtube at a faster rate you would see a lot of videos being shared and the tiny community of YouTube creators,mixers (within India) et al would grow huge. YouTube has been growing exponentially each year, something close to 20~30% each year. If we get good speeds both DL and UL I see no reason for us to also become top creators. As it is, Bollywood is known to have the most number of movies paid per year.
What they have not also taken into account that the strange beast called the Net culture makes its own hits and misses. One of the current cult favorites which people watch and rave about is The Pioneer One . The show is licensed under CC-Zero and its all done by public donations. Similar one would be ‘Sita Sings the Blues‘ . The idea that there is nothing beyond Bollywood and hollywood is really naive. There are tons of creative content being made and disseminated by the network, for the network.
For softwares, even if they provide say a mirror of sourceforge.net , distrowatch, major GNU/Linux distributions and mirrors for their archives, they would have lots to gain, even torrents of the same from such edge networks would be so much more welcoming.
There is another thing they have not really thought about. BSNL does have a Video on demand although where they have failed is constantly invigorating it with new content. Something like Netflix or something with buying movies and keeping it online could also trigger quite some people.
The other thing they have not really thought about is that BSNL has a mixed fiber and copper infrastructure. Fiber to the exchange and the last mile copper which as number of times its spliced gets more and more interference. Hence they cannot give either that kind of service or have any kind of guarantees.
In fact, about couple of weeks back when my phone line went down and the BSNL technician came to repair the line, it was found out that out of 10 odd lines which they had kept for such occasions only one was functioning, all the others are dead. Mind you, this is in Pune (arguably, a metro city) and not some village.
Another interesting anecdote to share was about an uncle of mine who subscribed to that Video on Demand (VOD) service, he is on one of the Night Unlimited plans (most probably the Rs. 625/- one) . When he subscribed to the VOD service they were unable to decouple the bandwidth used between VOD (on their network) and otherwise. Its a technical issue in the sense that BSNL does not/did not have such kind of accounting software installed.
A similar service to the one MG is saying was launched by Star Hub (a broadband play by the Media giant known as News Corporation a.k.a. Rupert Murdoch). This was around 2 years ago when they launched the service in Singapore. The terms of the service were the same. Within their network they (the users) would get unparalleled bandwidth but anything from outside their servers or network the bandwidth would be dependant on external network speeds and environment.
One another major point which actually should be shocking and rude to people which almost all ISP’s do and have done is they pay something to the MPAA/RIAA (put simply the media studios). This information is again available in the public domain (in the west) but the opaqueness of both the IT Industry as well as the ISP business has made sure that we would never know the truth. Put simply, the MPAA/RIAA believe that all (whether individuals or corporates) when they access Internet they would be downloading infringing copyright content and hence a tax without any legal approval or/and obligation needs to be paid by all users.
There are a few other loopholes as well but these were some of the major ones.
I really wish they were investigative journalists but they are not. It would have been more interesting, more educative to us if they had got authentic breakup of an ISP’s costs (say BSNL) as to what their expenses are, what is the break-up, what they count and do not count under the broadband head. I am sure they would find a ton of money being diverted to wasteful expenditure or for wrong uses.
I say BSNL because it should be accountable to us as tax payers money is involved, sad to say though neither BSNL is interested in giving any sort of transparent accounts nor are people able to get any info. on the same. That actually is a big scam but because there is not much detailed information in public domain, no scam.
Something more for your ‘investigative reporting’ . Yesterday, Indiatimes reported that we are the only country to have not upped the broadband bandwidth in the whole of Asian region. Now this either means that our ISP’s are pretty bad at negotiating bandwidth prices compared to all the 12 countries in Asia or they got good rates but *do not* want to pass the savings to us.
The other logic would be that others are fool to down the prices or/and up the speeds while only our ISP’s are true businessman who know how to do business.
Last but not the least, people who are interested in pursuing broadband would do well to read George Gilder’s books specially ‘Telecosm: The World After Bandwidth Abundance’ and others by him.
Just my 2 paise. 🙂