Cisco gets it right, twice

I work in the network systems business, for a company that competes with Cisco. I like to point out the failings of the companies my company competes with, and I also like to highlight the instances where they get it right. Cisco has lately been in the getting it right camp, and here are a couple of examples.

The public policy lead, Bob Pepper, has written one of the better pieces on net neutrality:

The supporters of net neutrality regulation believe that more rules are necessary. In their view, without greater regulation, service providers might parcel out bandwidth or services, creating a bifurcated world in which the wealthy enjoy first-class Internet access, while everyone else is left with slow connections and degraded content.

That scenario, however, is a false paradigm. Such an all-or-nothing world doesn’t exist today, nor will it exist in the future. Without additional regulation, service providers are likely to continue doing what they are doing. They will continue to offer a variety of broadband service plans at a variety of price points to suit every type of consumer.

Depending on their requirements and preferences, some consumers will choose to pay more for premium service. Others will decide that they don’t need such high service levels, so they will pay less. Inevitably, the market will adjust, just as it has in the past, to this varied population and its preference for a highly diverse mix of services, quality, bandwidth and price. This is the hallmark of a competitive market.

This is so good, it was banned from Wikipedia.

And on the business side, this makes a heck of a lot of sense:

Cisco Systems (CSCO) on Thursday announced plans to acquire online conferencing service WebEx (WEBX) for $3.2 billion in cash.

WebEx’s subscription service allows customers to share presentations and host video conferences online. Cisco will pay $57 for each WebEx share. The deal is worth about $2.9 billion, after WebEx’s cash reserves are subtracted.

The deal has been approved by the boards of both companies but still must get the OK from regulators. It is expected to close in early summer.

Contrary to some uninformed commentary, WebEx is not a “Web 2.0 company,” it’s a high Quality of Service Internet bypass for small and medium size companies who want on-demand QoS for occasional use. I’ve worked for several companies who use the WebEx service, and find that it does exactly that it’s claimed to do, and does it well. Cisco can expand the market for its routers by increasing the size of the WebEx business, and generally move more data to IP networks, and that’s the key to success for them.

Some critics have charged Cisco’s Pepper with “not getting it”, the usual complaint that net neutrality fans make against others:

While I agree with him that more rules may not be necessary, I disagree with the framing of his argument. The Net is not just a service, users don’t just consume it, the market is hardly competitive, and many choices are overpriced or just not there.

First, the Net is a vast set of connections on which countless services can be deployed. Telephony and television are just two. Because telephone and cable companies offer Internet connections as a secondary “service” on top of their primary businesses, customers tend to think of the Net in the same terms — something extra you get from our phoen or cable company. This is wrong. In terms of what-runs-on-what, the Internet will in the long run become a base-level utility, and we will come to regard telephony and television as two among many categories of data supported by that utility, just as we now regard Fedex delivery as a service that runs on roads, but does not control them.

The error here is failing to realize that all communications services aren’t about the Internet, whatever its many virtues may be. Cell phones are not about the Internet, cable TV is not about the Internet, and private corporate networks are not about the Internet. And it’s certainly no more fallacious to talk about the first-hop Internet subscriber service as a service than it is to talk about it as “the Internet.” The Internet is a system that interconnects private IP networks, not the system that connects the Searls household to a default Internet gateway, nor is it the be-all and end-all of communication.

It would be nice, I suppose, if the day came where live telephone and television services were to migrate to the Internet, but that would hardly signal a significant advance in human civilization: television will still suck, and the Internet will remain far behind the cellular telephone network in terms of convenience and mobility.

So the score this week is Cisco 2, Utopians 0.

6 thoughts on “Cisco gets it right, twice”

  1. How does free-market competition fit in when I have exactly and only one broadband provider (SBC/at&t) available to purchase home service from? The local cable provider claims that their infrastructure isn’t sufficient to offer quality broadband, and they’ve not announced any intent to offer such service in the forseeable future. (I’ll leave it up to you, whether to believe what the rep told me).

    I’m not trying to be snarky or argumentative, I’m genuinely curious.

  2. You can buy wireless broadband from a number of cellular network providers, and you can buy satellite-based broadband from DirecTV and others. Nobody in America has one and only one broadband option.

  3. Hmmm. Wireless wouldn’t work where I live. The air’s too noisy to get anything even remotely resembling a reliable signal in computerland. I’m not sure if that’s because of the airport across the street or the 18 different home-wireless networks I can see from my living room at any given time.

    I also have yet to find a cellphone provider that has more than 1 bar in my apartment (and not for lack of trying!) I’ve invited people over from all the major carriers, no luck there. I’d love to get rid of my landline. I’m sick of paying $25/month for exclusively local service. (They force me to get some crummy minimal long distance plan, even though I don’t want it. That’s what my calling card is for.)

    I never thought of satellite, though. Whoever offers it needs to do a better job marketing it. If my apartment complex let me put up a satellite dish (they don’t, but if they did), that would give me a second option.

  4. Your apartment complex is forbidden by federal law from barring you from having a VSAT dish. If they tell you otherwise, simply file a complaint with the FCC and action will be taken.

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