Is Comcast going to buy Yahoo?

A good deal has been written about Brian Roberts, CEO Comcast, announcement that 160mbps connections are just around the corner. The problem is the internet was built on best effort relationships and is nothing more than a bunch of networks connected together with no quality control on where or how these various networks interconnect. Without some standard for interconnections it is impossible for Comcast to guarantee any performance of packets once they leave the Comcast network. The network is as strong as it's weakest link so even though you may have the ability to get 160mbps, chances are you won't if the origin of your requested content is not physically in/on your AS.

IMHO this is more about setting the stage for a new approach to the comcast network than bandwidth to the internet in general. It is in Comcast's best interest to get as much capacity on their own network as possible because it gives them a huge advantage over the likes of Google, MSFT, YHOO, Fox, etc when it comes to QoS on specific applications. Besides, there is no possible way this could scale out to the internet and that is on purpose....meaning comcast will never be able to guarantee 160mbps anywhere but on their own network. These ever evolving broadband local networks with some overlay backbone connecting them together is the ideal situation for p2p distribution. At the end of the day, comcast wants to keep those packets on it's network as long as possible because then and only then do they maintain 100% control. In doing so they have leverage with the customers who are mainly home users. Service for the enterprise is not far behind nor hard to accomplish...a simple dedicated line between the enterprise and comcast's network and the enterprise is connected. Or better yet, the enterprise could outsource their IT services such as email, CRM, storage, collaboration, voice, video conf. etc. to Comcast and be guaranteed XX Mbps throughput from an employees homes to the corporate environment. Given all of the local and federal incentives for going green which will trickle down to driving companies to promote telecommuting even more than they are now, this is actually a valuable service to be able to offer. Add video conferencing, voip, VOD, etc on top of it and they'll have a network that offers an enterprise customer the most efficient way to address all of their voice/IP/IT requirements. In doing so it also de-stresses comcast's reliance on upstream links by using them less(assuming p2p is in place) and relying more and more on peering. Comcast was one of the early peering sluts so to speak, when other MSOs thought peering was what you did when you teamed up with your second grade classmate to do a bookreport, Comcast was signing network peering deals with anyone who sends a fair amount of traffic to them or vice versa.

I have mentioned Surewest previously and they are currently offering fiber to the home in Sacramento. For customers where this is available, everything (voice, HDTV, IP, VOD, catv, etc) are delivered over IP. It may seem cutting edge and far too complicated for a dumb old cable company to accomplish but comcast is no TCI even if they are saddled with some of the TCI infrastructure, Brian Roberts gets it and embraced it long ago. If that isn't enough, IP really is proving the most efficient delivery medium available. @home was developing products and applications around these virtues and Comcast has merely expanded on that vision.

IMHO, so take it for what its worth, Comcast and Google are the two powerhouses today. Comcast should buy Yahoo or better yet, pull a trifecta Comcast/MSFT/YHOO combo. That would be the google killer. Why bring in MSFT? They have lots of cash, a great revenue stream, lifelong customers and can turn office apps into a hosted infrastructure which yhoo no comcast have done. All of these services may even be free to the end user because they'll all be subsidized by advertising. After all, it is advertising that drives goog's revs and it will be advertising or subscription fees(I view them as the same as they should be mutually exclusive) that surpass licensing revenue of software vendors. Remember, advertisers are fickle and will spend their dollars where they think they are going to get the best return. As such, when a comcast user needs to access google servers, it is comcast who controls how well that user gets that packet back and it isn't necessarily in their best interest to make it smooth and seemless. Think about it, causing poor user experiences with google is one way to discourage ad spend with google. One piece at a time and sooner or later it all adds up to a significant threat to google's so called "unfair advantage"

Peering at the edge and the role of the P2P

Here are some reasons why I am leaning that way:

1. Ubiquity in access and Choice. Everyone, everwhere on the planet and perhaps elsewhere will eventually have the ability to choose who their isp is and how they connect to their isp. ISP is defined as a company who sells transit. How they connect is defined as the last mile and example are hfc(cable), fiber, copper(DSL), wireless(wifi, wimax, satellite, whatever)

2. Networks are only as good as the networks they connect to. The whole point of p2p was to improve performance and save costs, at least that is my impression of how p2p's position themselves commercially. p2p technology works best when the 'sharing' happens locally, as in the same town, region, neighborhood because the data doesn't have to encounter so many hops along its way from one peer to the next.

3. Last mile service providers don't connect with one another. This is stupid on their part! Example: I'm on comcast and my neighbor uses pacbell dsl. I just downloaded the maverics surfing competition video which i got by seeing it in my koniki client. I watch it and move on but it is still on my computer and kontiki is still running in share mode. My next door neighbor fires up his kontiki client and he too sees the link for the surf comp and clicks it. Does my neighbor get that file that is sitting on my machine or does he get it from some other location on the net? That depends on different factors but chances are it isn't coming from my pc. Stupid because this isn't efficient and when services aren't efficient they will be driven to the ground sooner rather than later. It wouldn't be efficient for my neighbor to get to my pc vs some other node on his isp's upstream provider(for example sake pac bell, sbc and att and all separate companies) even though he can see my pc from his home office window because in order to do so it is going to cost pac bell money, it is going to cost comcast money, and it is going to cost the surfin website company money and its going to take a shit load longer and have no QoS. That little request for the video i just watched, should it have to come from my pc to my neighbors, would have the itinerary below:

neighbors pc to pac bell Central office to pac bell regional hub to upstream provider to some public peering switch to Level3(comcast upstream provider) to Comcast regional datacenter to headend to neighborhood node and finally down to my pc. and then head back(next door to me) in some similar fashion....I think there is another hop between the node and headend too so it's even longer has more potential points of failure.

For this reason, it would make sense to move the peering to the edge and the p2p networks are a potentially more efficient way to peer than what is currently done. This could take place in or at the CO level or Headend level by merely interconnecting the two and running bgp or some other protocol that accomplishes the same thing. In this example, it would save comcast money that they pay to L3 for their upstream connectivity, it would save PacBell money that they pay to uunet for upstream, it would save the peering provider money because the router would consume less power and generate less heat and not be taxed by the demand of the reques. ie, it's more efficient. The old school telco boys with their closed networks and fear of new techonologies and competition are slowly but surely retiring and moving on because they've been at it for 30+ years and they have better things to do like play golf and play golf again. Backfilling for them are leaders from the IP generation and their mindset is more progressive, they understand the layer one is always going to be layer one and that it is a commodity. As such, they aren't as concerned with keeping it closed at the local level as their predecessors once were. They see the value and understand the threat of not opening it up. Its better to get something than go out of business right? They're keenly aware that their incumbant status could be a liability on several fronts including net neutrality supporters stirring up the pot and filing lawsuits, new technologies emerging which are more efficient and have low barriers to market entry and they still owe a shit load of money to pay back the banks for paying for all that fiber so they wise up and collectively develop a plan to have some arbitrator transfer packets amongst themselves. The arbitrator has to be a neutral third party to avoid any conflicts of interest between the networks and has to have deep reach into the networks users hardware and obviously know what they are doing from a technical perspective.

A couple p2p providers, specifically kontiki, are in a great position to jump on this. It's no wonder they were purchased by Verisign!