Thursday, August 21, 2008

P2P: down with Dvorak, up with Dvořák!

My second poll has ended. Time for some commentary and a new poll.

Basically, it is Andrew Odlyzko v. John Dvorak (not to be confused with Anton). (Anybody care to make a Wikipedia entry about me?)

1. Outcome of Poll #2

What to do about illegal P2P file sharing? (multiple answers were possible)
  • It's like shoplifting: learn to live with it. 8%
  • It's illegal and killing ISPs: keep fighting it. 0%
  • People want downloads and streams, at lower price points, instead of disks, which are perceived as expensive: new distribution models and record companies are needed. 70%
  • P2P file sharing can be legal, as well as a very efficient distribution model: new business models and DRM are needed. 41%
The third and fourth answer were similar, but especially the third obviously rings true with many file sharers. In the Internet era, where pop stars are born on YouTube, record companies are perceived as expensive dinosaurs. And who needs discs, if you can store them on ever smaller devices?
The fourth answers was quite popular too. It centers not on records and record companies, but on the technology itself.
The second option still has some support, but the good thing is that they focus on providing legal alternatives.

2. Commentary

Several topics are related to the P2P problem:
  • Usage growth. In June, Cisco predicted a 46% CAGR for global IP traffic during the 2007-2012 period. Then in August, Andrew Odlyzko picked up a very conspicuous decline, the first ever on a quarterly basis, in the data traffic on Cogent Communications' backbone (-1% qoq, with school holidays to blame at least partly). On Telephony Online it was suggested that CDNs could have something to do with it (pushing content closer to end users, so we should look at last mile traffic separately) and that internet-based video is far from mature. Odlyzko himself is still seeing 50-60% growth rates. Dave Burstein of DSL Prime has some AT&T statistics, such as: growth per customer is 25-30% per year. I would add that the availability of high-speed networks causes usage to go up, as Ventura Team has pointed out.
  • Net neutrality. Should network owners be free to 'shape' (or whatever term they use) traffic, or would that be a threat to innovation? Too much is being said about this problem, but I will add one thing. Operators are trying to squeeze more money from the likes of Google, who already pay to put their content in the cloud (!), just because they have no pricing power at the other end, as the retail market is very competitive. In other words, it is one possible answer to the:
  • Broadband Incentive Problem (MIT, September 2005). Flat-fee pricing is at the heart of our broadband economy, but at the same time it perversely stimulates ISPs to discourage usage. "... operators have not yet found access pricing mechanisms that both make sense to users and effectively align user behaviors with the costs they impose".
  • Usage-based metering. Is this then the answer? The first argument against it is to say that the 5% of users that use up most of the available bandwidth changes every day. However, I don't see how that would make usage-based metering an unfair pricing mechanism. I could even go a long way with John Dvorak, defending a metered internet. He is absolutely right - except that he is totally wrong. We must remember that dial-up was really bad and that the internet is meant to bring lots of benefits (economically, socially, environmentally). We should not return to the 90s. Instead, usage must be stimulated (as Odlyzko says, or read this piece by Colin Dixon), not discouraged. We must remember that bits aren't like water or electricity. When it comes to bits: the more the better. Water and electricity however are scarce and producing them requires energy and puts a strain on the environment. But some folks just won't stop.
  • FTTH. I suppose throwing bandwidth at the problem is at least a partial solution. However, I have heard people say that they refuse to believe in FTTH, because there is no legal use for such networks. "Why should we pump money into it, if all people do with it is illegal file-sharing?"
  • The value of music. Last but not least my personal view on modern music cultures. These days music is all around us. Long ago, it was limited to concert halls and in the 19th century people like Franz Liszt produced piano reductions for people to enjoy the great works of art in their homes. The rise of popular music has accelerated this technological development, and now we have iPods and iTunes. Thirty years ago, people complained about elevator music, aptly called muzak. But I don't hear the term muzak anymore. Today, we have gone so low that DJs make CDs. This dear reader, is behind the third option in the above poll. People want to listen to DJs, but at least they are right about one thing: it shouldn't cost them anything. May I suggest you go to your web store (I would suggest and get yourself a decent set of Olivier Messiaen (born 100 years ago) and Elliott Carter (100 years old this year, and composing like mad) CDs. Just so you know good music is still around and very much alive. And not very expensive.

3. New Poll

My third Poll is in the right hand column. Cast your votes!

1 comment:

Anonymous said...

I voted on your new poll to your question "How many different infrastructures are needed, at minimum, for effective competition?"
My vote was 4 as in the US. I think itts incredibly smart to do what they have.

Great blog,