[jbooth]

The article said that their cable business is way less profitable than their internet business. I haven't done any research on the topic, but given that they have to pay content providers for cable, and don't for internet, I'm inclined to believe Cringely -- even though in a normal market it should be a low-margin business, selling undifferentiated bits for $.

[danielweber]

If it was "selling bits for $" we would already be done.

But today's ISP capacity is unsuitable for tomorrow's ISP demands. One might hand-wave the network as "sunk costs" but the ISP has to keep on sinking those costs.

In fact, that's what Crinkley is complaining about: the ISP isn't sinking costs into its peer with L3.

[jbooth]

Sure, so you've got depreciating capital costs on a schedule coupled with ongoing operational costs, that gets you to some amount of $/yr to operate the network, and $/year/bit in terms of network capacity.

What should be happening is competition driving down the price per bit to some amount just marginally above their costs. These costs may be high but the margins should be low. That's Econ 101 and it's what everyone who ever advocated for the free market is making a case for.

What appears to be happening is they're collecting a big fat surplus on top of that figure, and that surplus is in addition to all the wasted money in their corporations that's never had to be cut in a down quarter.