Comment by dboreham
3 years ago
You're misunderstanding this market. There's a wholesale market, which he is buying from. There's a retail market which he is selling into. Some providers service both the wholesale and retail markets, but typically with different divisions, people, tech, resources. It's like saying that if you build a gas station and buy your gas from Exxon then that's bad because Exxon also operates gas stations. It's not like an MVNO where all you're doing is sending the customer a bill, and provisioning API requests to Verizon.
> You're misunderstanding this market. There's a wholesale market, which he is buying from. There's a retail market which he is selling into. Some providers service both the wholesale and retail markets, but typically with different divisions, people, tech, resources.
The difference in divisions/people/tech/resources doesn't explain anything for me. They're both the same company with the same CEO, whether it's one business unit or a dozen. It's not like the executives are oblivious to how much money each unit is making and whether another unit could make more in place of it. If you're the CEO and see you could charge twice as much by doing retail instead of wholesale then you'd obviously try to do that.
Rather, the explanations I'm getting from the other comments seems to be that (a) regulators require some kind of reasonable wholesale to exist to third parties, (b) the big ISPs aren't planning to serve those markets anyway, so they're not missing out on any income by taking money from the last-mile ISPs. And as long as those last-mile ISPs don't try to compete for the same customers then they're fine.
> The difference in divisions/people/tech/resources doesn't explain anything for me. They're both the same company with the same CEO, whether it's one business unit or a dozen.
Then you've not worked in large B2B companies before. Eg Apple pays Google money and Google pays money to Apple, any perceived public rivalry goes out the window as far as business between the two is concerned.
If you're the CEO of Comcast, you've never even heard of this small time ISP, you have far bigger things to spend your time on, and the "upstream" business unit of Comcast really doesn't care what you're doing, so long as your money's green. It's all business. See also: Netflix using AWS despite Amazon having a streaming video service of their own.