Recently in Economics Category

As of approximately 20:46 UTC, four hours after this blog was first published, Noor started disappearing from the Internet. They are completely unavailable at present as shown below

As we observed last week, Egypt took the unprecedented step of withdrawing from the Internet. The government didn't simply block Twitter and Facebook (an increasingly common tactic of regimes under fire), but rather they apparently ordered most major Egyptian providers to cease service via their international providers, effectively removing Egyptian IP space from the global Internet and cutting off essentially all access to the outside world via this medium. The only way out now would be via traditional phone calls, assuming they left that system up, or via satellite. We thought the Internet ban would be temporary, but much to our surprise, the situation has not changed. One of the few Egyptian providers reachable today, four days after the start of the crisis, is The Noor Group. In this blog, we'll take a quick look at them and some of the businesses they serve.

Thanks to all for great comments and questions. Please see below for latest updates on the ongoing Egyptian Internet blackout, including some trace-based analysis and a few words about neighboring countries. After this morning we'll be closing this post out, and looking for the restoration. Hopefully sooner than later. --jim

Confirming what a few have reported this evening: in an action unprecedented in Internet history, the Egyptian government appears to have ordered service providers to shut down all international connections to the Internet. Critical European-Asian fiber-optic routes through Egypt appear to be unaffected for now. But every Egyptian provider, every business, bank, Internet cafe, website, school, embassy, and government office that relied on the big four Egyptian ISPs for their Internet connectivity is now cut off from the rest of the world. Link Egypt, Vodafone/Raya, Telecom Egypt, Etisalat Misr, and all their customers and partners are, for the moment, off the air.

The view from seat 22A

You remember 2005, don't you? Back then you could book wholesale IP transit for about $15 (€18 in Europe) per megabit a month. Data volume commits were much smaller then, as little as 1Gb. Those were the good old days. Today, traffic volumes have increased by as much as 10 times, yet many providers have seen little growth in total IP transit revenues.

Think you're too busy to blog? Think again. Or just ask your boss. After more than 100,000 miles in coach class this year (so far), my backbone may be aching, but the IP backbone market is as agile and dynamic as ever. Sales opportunities abound, but to take advantage, you'd better be savvy, and just a little cagey.

So, as our gleaming 777 departs Kuala Lumpur, I'll just relax in my fully-reclined, ultra-deluxe coach seat and tell you what this globetrotting sales guy has seen, heard and figured out.

1. Large eyeball networks (5 million+ subscribers) are selling paid peering to the largest content providers.
2. There are big price reductions in IP transit all over eastern Europe - now close to parity with western Europe.

New York.--Senator Robert Bulkley, of Ohio, has made a proposal which is certainly worth considering.

It is as clear as daylight that, to bring about any sort of recovery, somebody must start some new sort of business or some extension of an old business.

It is also clear that nobody is in sight right now who has any notion of doing that — at least not in time to do this country any good as a depression cure.

There is one business which is a public business but is also a private one. This is the road-building business. The Government pays for the roads and hires the contractors. But the roads are built usually by private contractors and with materials furnished by private manufacturers.

If there is one thing needed in this country now, in view of the development of the automobile, it is express highways running east and west and north and south. Why, therefore, cannot the Government go into the business of building these highways?

Tough Times for Local Exchange Carriers

This week, the headlines seem to be full of fresh doom and gloom for wireline carriers, who employ people in every congressional district across America. Sooner or later, someone is going to call for Congress to tap some of the hundreds of billions in 2009 economic stimulus to help the LECs through troubled times, save lots of jobs, and preserve the way we do business in our critical last-mile communications infrastructure.

Is this wise? Is there a better way?

The Internet is in for interesting times. Previously, I wrote about the engineering issues and about the policy issues facing us over the next five years. But there is at least one large issue still lurking. Most of you will not be surprised to learn that almost all of these issues are outgrowths of a single factor: money. The core of the Internet still doesn't have a sustainable business model.

Many people are getting rich on the Internet, and almost none of them are spending money to keep the interconnection infrastructure (the "Inter" in "Internet") growing and expanding. Look at it from a massively oversimplified perspective: Google make their money from the advertising they sell to search audiences. Comcast make their money by offering TV and Internet access on their local cable infrastructure. Amazon make money selling books and other stuff (including servers and storage space). Most datacenter companies make their money selling space and power inside of their buildings. Spammers make money filling up your inbox with useless crap. Organized crime makes money by launching attacks against profitable companies if they don't pay extortion. DNS squatters make money registering thousands (or millions) of domain names and sitting on them until someone else is willing to pay. And almost none of this helps the core of the Internet.

Look to the wholesale carriers if you want to see an income statement wasteland. Level 3 lost $1.1b last year. They lost $120m in the most recent quarter alone. Cogent is thrilled because they reported a tiny, tiny positive net income last quarter on top of a yearly loss of $30m in 2007. Global crossing lost $300m in 2007 and $88m in the last quarter they're reporting, which doesn't include much of the recent downturn. Other wholesale networks are in the same boat. Dan Golding suggested that it's more important to look at net cash flows rather tha income, but the result is pretty much the same: almost no one is making any money. The only wholesalers who do make money make it on other service offerings: wireless service, metro Ethernet services, VPNs, local phone service, video services and so on. Are there sustainable Internet backbone business models? Does anyone have one?