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by 19guid
3133 days ago
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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. |
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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.