[linkregister]

The reason why I and some other HN commenters (and L3 Communications) find this argument bizarre is because of the concept of transit traffic charges being applied to the last mile, which previously was not an industry practice.

Comcast's customers are requesting the data; if Comcast were a second tier backbone, or an AS between two others, then it would make sense to charge for traffic, as it doesn't benefit. But the traffic going to Comcast is there to benefit its subscribers, without which, Comcast doesn't make enough money. The most bizarre thing is that if the customers were to upload the same amount of data back to the sites, then they wouldn't be charged, as the data was symmetrical!

Why would an ISP be able to charge other AS's for sending traffic to its own customers? If there were even a single competitor in that region, this dynamic would change completely.

[19guid]

I think it makes sense because retail ISPs operate in a two-sided market. Comcast provides access to Internet services, which customers want and are willing to pay for. Similarly, Comcast provides access to customers, which the Internet companies who provide those services (and associated CDNs and transit providers) want and are willing to pay for.

I don't think there's anything especially wrong with this business model. It's similar to how a newspaper charges both readers and advertisers for access. The disadvantage is that you have to keep both parties happy.

Incidentally, if customers uploaded the same amount of data as the Internet services, Comcast wouldn't get transit fees but it would get additional revenue from the customers, so I think things would balance out.

[neuterlize2]

> I think it makes sense because retail ISPs operate in a two-sided market. Comcast provides access to Internet services, which customers want and are willing to pay for.

Yes, but this is where your analysis breaks down: it's not a free market. The customers are a captive market.

> Similarly, Comcast provides access to customers, which the Internet companies who provide those services (and associated CDNs and transit providers) want and are willing to pay for.

The Internet companies are only willing to pay because they have no other alternatives. They only pay because Comcast has a monopoly and thus acts as a gatekeeper, and then only because Comcast has such a large market share that refusing Comcast would deprive them of a significant part of the market. Calling this "voluntary" participation in a two sided market is absurd. Blackmail is what it is.

When anybody else than Comcast tries this, they are laughed at and told to piss off.

> I don't think there's anything especially wrong with this business model.

There's plenty wrong. The subscribers have already paid full price and now Comcast wants more, this time from the Internet companies, without which Comcast would have nothing to sell.

> It's similar to how a newspaper charges both readers and advertisers for access.

This is just a bad analogy, again. Newspaper readers aren't paying full price for the newspaper, and they are not paying for getting access to the adverts.

> Incidentally, if customers uploaded the same amount of data as the Internet services, Comcast wouldn't get transit fees but it would get additional revenue from the customers, so I think things would balance out.

This just plain incorrect. Comcast wouldn't get a penny more from it's subscribers. Internet access is inherently asymmetrical. Were subscribers to use their upstream more, it would not result in any more revenues.

[kelnos]

> > It's similar to how a newspaper charges both readers and advertisers for access.

> This is just a bad analogy, again.

Not to mention a poor choice of industry to use for comparison: it's not like the newspaper business is doing all that well these days.

[JustSomeNobody]

> I think it makes sense because retail ISPs operate in a two-sided market. Comcast provides access to Internet services, which customers want and are willing to pay for.

So, I put up a small SaaS that I want people to use. In your world, I now have to go knock on the door of all the ISPs out there to pay them for access to their customers?