Residential networks are actually part of my current research, and, although I don't know the full details of every technology, I am familiar with the basics of how DSL and DOCSIS networks work.
Yes, there is a cost (in terms of performance and congestion) over these links, but this not really relevant in the discussion when talking about the cost of where the traffic is originating. Whether the traffic originates in Comcast's data center in Seattle, from a CDN in Level3's network, or over their peering links with Tata, the cost of it traversing the last-mile is irrelevant. In any of these cases, traffic will still be crossing this link. And yes, this is a significant cost in terms of deploying the last-mile network, but as I said, it has nothing to do with the cost of getting of getting the packets to the DOCSIS network.
What we're saying is that if Comcast is carrying traffic from Seattle to a user in their network, they do not have to pay a transit provider to carry this traffic. If it is from Level 3, Level 3 would actually be paying them to carry that traffic to Comcast subscriber. If the traffic were coming from Comcast's peering link with Tata, Comcast would have to pay Tata (their transit provider) for the traffic.
Yes, the cost of the last-mile network is real and important, however, in this discussion it doesn't really relate, since you would be traversing the DOCSIS network in all cases.
Well... Isn't there a fundamental assumption in the network neutrality debate that cost per bit is zero or very low? At least that's the feeling I get from reading this discussion. People seem to think that cost comes mostly from IP transit, and implicitly that last-mile infrastructure cost is constant and sunk.
Well, that assumption is wrong for mobile, and to some extent for DOCSIS. Last-mile cost scales with traffic volume (and completely overshadows the cost of IP transit). That's why I think you'll see MNOs and MSOs fighting the hardest against network neutrality.
Yes, there is a cost (in terms of performance and congestion) over these links, but this not really relevant in the discussion when talking about the cost of where the traffic is originating. Whether the traffic originates in Comcast's data center in Seattle, from a CDN in Level3's network, or over their peering links with Tata, the cost of it traversing the last-mile is irrelevant. In any of these cases, traffic will still be crossing this link. And yes, this is a significant cost in terms of deploying the last-mile network, but as I said, it has nothing to do with the cost of getting of getting the packets to the DOCSIS network.
What we're saying is that if Comcast is carrying traffic from Seattle to a user in their network, they do not have to pay a transit provider to carry this traffic. If it is from Level 3, Level 3 would actually be paying them to carry that traffic to Comcast subscriber. If the traffic were coming from Comcast's peering link with Tata, Comcast would have to pay Tata (their transit provider) for the traffic.
Yes, the cost of the last-mile network is real and important, however, in this discussion it doesn't really relate, since you would be traversing the DOCSIS network in all cases.