You could really win my respect by showing that you know the difference between what the industry wants customers and regulators to believe, and the reality as it is when stripped of metaphors treated as fact. Despite all of the points I raised, I’m disappointed that you chose to poke at the bit about bytes. I may not have a talent for brevity, but I would show you more respect than to ignore your points and just take a swat at straw men.

To simplify my explanation one final time today; the cost of maintaining and providing Internet service is relatively miniscule and is dropping steadily. The PRICE of maintaining and providing Internet service is gigantic and growing, due to arbitrary fees and methods of valuation imposed by the top (monopoly) players, and the artificial shortage created for advantage, by their deceptive and *inappropriate* stock market model.

The largest bill my ISP employers paid wasn’t for facilities, utilities, insurance, benefits or wages. It was the gargantuan bandwidth bill. Amazingly, all the rest was paid for with a modest markup to our customers, but it led to running a business with a razor thin profit margin. Though we were multi-hosted, our providers were unwilling to “trade” bandwidth with us. This would have nullified our bandwidth bill, but we would also have become genuinely competitive. They sabotaged our attempt to supply DSL the same way they did with every other alternative provider.

I don’t begrudge an industry it’s profits, but when it’s profits are high enough to build a whole new Internet every few years, I say it’s high time to illuminate and empower the public. We depend largely upon the Press to do this. Our country has some of the slowest standard speeds coupled with some of the highest prices despite our abundance of “IXP’s” and the fact that we invented the Internet. No, actually the public is *not* satisfied with “fast enough” speeds nor proudly paying more due to our relative wealth!

Perhaps my folly is in continuing to assume you don’t understand. It’s clear enough to some of your other readers who commented here. Even Bob Frankston and I have come to highly parallel conclusions about the Enronization of the Internet, though we arrive at it from different directions and employ different language. The burning question is: who are these experts you consult?

Again, I urge you to be a journalist about this, and not take directly to heart what your industry friends and the 92-page treatises they promote say. You obviously have access to a considerable amount of information about this industry’s machination. What you do is create a vivid picture out of a hand-picked subset. The parts you omit would paint a radically different image. The industry is playing chess on a checkerboard, and it behooves you as a journalist to expose that.

One being the concept of “manufacturing” bandwidth, as was already discussed below. The hardware underlying the internet infrastructure costs everyone roughly the same. The cost to trench fiber is roughly the same everywhere. If a company or country is charging more per unit of bandwidth, it’s market related, not cost related.

The other is the over-reliance on the Internet Exchange Points that you made. The *vast* majority of inter-connectivity in the world does not take place across IXPs. To explain why a Netherlands for example has as much traffic flowing through it’s IXP despite having 1/5 the population of Germany or 1/4 the population of England, all you need to do is follow the fiber. Many companies build there because it’s an important intersection point of subsea and terrestrial fiber, so most of the traffic there is being exchanged between companies that aren’t based there. The utilization per subscriber in the Netherlands is actually inline when compared to other OECD countries.

The problem that I have with this, is that the telcos charge hundreds of times for access to the Internet, that it costs them to provide it. How that relates to “wire length” is that while it may cost $100 to install and maintain a cable to a metro location (close to IXP) and it may cost $1000 to install and maintain a cable to a rural home (far from IXP), by the time that wire has “worn out”, the maintenance expense of that longer wire does not justify the steep mark-up in the price of service. The maintenance expense is negligible in the long run.

As before, the reason customers at the end of long wires pay more for their service is because they have fewer alternatives to choose from. It’s the *old* economy, not the “new” speculative one Stacey describes in the article. This new Internet economy runs on the principle of monopolistic gatekeepers speculating on how much profit they can make by maximizing their prices, meanwhile giving the public (and regulators) completely farcical explanations for the hikes to keep market pressures down.

It seems you’re making the assumption that the cost of “longer wires” actually justifies the overcharging for Internet access, when it’s just a minor element that has been whipped into part of the telco’s smoke screen. If there is indeed a surcharge on bits to pay for the wire over it’s lifetime, then it’s buying enough wire to reach Mars, and customers are seeing none of the benefit. In reality, I think you’ll find it’s buying politicians.