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« Please Tell the Truth, M Linden | Main | On the Revolutionary Train »

July 27, 2008

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Gareth Nelson

"Perhaps then we'd see this idiocy in Second Life come to an end, whereby people think servers are "free" and that they cost "nothing" and that the "Lindens charge too much for them"."

Actually, the lindens do have wayyyyy too high profit margins. I once calculated that it's something like 1000%

As for net neutrality in general:
There's nothing at all wrong with charging more for higher bandwidth usage, however it reeks of censorship when an ISP artificially limits traffic based on the content. QoS measures are great if you want to prioritise real-time traffic over downloads (for example), but the main issue is limiting traffic for a competing service.

Example:
It's fine for an ISP to prioritise voice over IP above web traffic, but if they then say "VoIP provider A must pay us or we'll priotise VoIP provider B's traffic above them" then that is a huge problem.

Prokofy Neva

Gareth, you've shown up on schedule to say all the predictable knee-jerk copyleftist/freetard things.

So...you were able to put a value not just on raw server space, but maintenance and programming and updating on a platform that provides streaming 3-D contiguous world imaging from an asset server dynamically updated constantly by user generated content? Uh, could you show us your numbers, and also compare and contrast to all the OTHER pricing where OTHER companies provide these exact same rich services for less. Well? Cat got your tongue?

There's nothing "reeking of censorship" in *capping consumption*. You can't turn "consumption" into "my right of free expression". Gosh, I'd love to have all the world's newspapers translated and digested and beamed into my inbox for free every morning but hey, they are obstructing my "freedom of expression" by not doing that, those mean corporate trolls.

Not seeing the problem. Pay to play. Natural concept. This issue isn't about competing services, really, and it would be natural to compete and limit competitors.

If somebody wants the Internet to be a big free public utility that you pay nothing or pennies for like water, then...accept all the government intervention that implies, and stop whining.

Gareth Nelson

"There's nothing "reeking of censorship" in *capping consumption*. You can't turn "consumption" into "my right of free expression". Gosh, I'd love to have all the world's newspapers translated and digested and beamed into my inbox for free every morning but hey, they are obstructing my "freedom of expression" by not doing that, those mean corporate trolls."

Read my actual comments again. I in fact do pay for my usage on a sliding scale and consider this fair and reasonable. What I would be bothered by is if my ISP decided "website A" is more important than "website B". When I pay my ISP, I pay them to give me a reasonably fast connection relative to the price I pay and the technology used. They shuffle my packets out and I pay them based roughly on how much data needs to be transferred to achieve this. Nowhere in this agreement are there terms stating "but we'll make packets coming from company X arrive slower just because we can". My home ISP does say "during peak times we give certain protocols priority" but they do not analyse what i'm transferring using those protocols - and they shouldn't.

Prokofy Neva

Read my comments again. Consumption has to be capped or paid for. Companies act rationally in making decisions to "make packets coming from company X come slower" not "because we can" but because they have torrent downloads on them.

Of course your company analyzes certain protocols, they'd have to in order to manage the flow properly.

Honestly, you kids are such entitlement-happy freaks.

Gareth Nelson

"Uh, could you show us your numbers, and also compare and contrast to all the OTHER pricing where OTHER companies provide these exact same rich services for less. Well? Cat got your tongue?"

http://secondlife.com/land/privatepricing.php
$1000 setup
$295 monthly
1000 + (12*295) = 4540
4540 / 12 = 378
First year of hosting a private SL region works out at about $378/month for a single region

Hardware can be rented that's capable of hosting about 5 regions for $120/month
Per region, that works out at $24/month
378-24 = 354

$354 profit margin per region
$1770 profit per server

This is very "back of envelope" but shows the HUGE profit margins. Not that profit is a bad thing (personally I think it's great), but it can be done wayyyy cheaper.

Gareth Nelson

"Read my comments again. Consumption has to be capped or paid for. Companies act rationally in making decisions to "make packets coming from company X come slower" not "because we can" but because they have torrent downloads on them."

Then you analyse the actual traffic and see what company X is sending, and if it's BitTorrent then you limit it as you do for all BitTorrent traffic. To do otherwise means playing judge of what content is deserving of fast transfer and what content isn't.

Prokofy Neva

Gareth, once again, you're proving in spades how infantile, near-sited, and stupid this sort of thinking is, and I'm glad it's there for all to see.

You contrast the mere renting of server harder with the maintenance and programming and updating of *software as service*. It's not about mere servers. Sure, somebody could rent servers and put their websites and spreadsheets and what-not on them.

But what is on the Lindens' servers isn't only a constantly dynamically changing world and the software, there is the maintenance.

Somebody renting a server somewhere to run themselves is failing to account for their own salary, and their own cost in such a system. That cost is something that non-tekkies would be paying. So paying the Lindens to manage servers and software-as-service for me, as a non-tekkie, is a bargain, compared to the costs I'd have buying and maintaining services and hiring geeks to keep them running.

This is so obvious that i don't know where to begin to try to get it across, if you are not getting it -- but of course you aren't, due to the myopia of insolent Internet youth.

Gareth Nelson

salary.com gives an average salary figure in CA 94111 (where linden lab is based) at about $60k annually.

Some calculations courtesy of python:
>>> 60000/12
5000
>>> 5000/1770
2
>>> 5000.0/1770.0
2.8248587570621471

2.8 regions (round up to 3):

3 region sales covers the salary of one sysadmin. Now, how many regions are there on SL and how many operations staff members do they have?

http://lindenlab.com/about
"Linden Lab has a distributed network of offices with over 200 employees worldwide."

http://secondlife.com/whatis/economy_stats.php
21489 islands owned (this doesn't even include mainland)

(21489*1770) - (200*60000) = 26035530

$26035530/month on private regions alone pure profit, they could quarter that and still be quite profitable. Note again (before you rant) that I am not saying it's bad or "evil" that they're profitable, but they could easily reduce prices a great deal.

Prokofy Neva

o $60,000 is a low salary, they earn more than that.

o There are more than 300 of them now.

o There are more than 28,000 islands now.

o Costs of software as a service isn't only reflecting a salary of a programmer, but part of the operational costs of the office, equipment, server farm, etc.

If you are ever able to grow up and get a real job, you'll see how real offices work.

Ann Otoole

Part of the problem is these companies trying to get people to accept controlled access whereby the Internet Access Company decides what locations you are allowed to visit and what software is allowed to access the internet. These companies must be crushed out of existence. The internet must be free from access restrictions. If these companies are not utterly destroyed then you can kiss your precious metaverses goodbye along with your freedom of speech on the net.

Prokofy Neva

I fail to see why they need to be "crushed out of existence". If they are paying for the costs, and they are not fully passed on to the customer, who basically has cheap Internet service, why can't they controll access and decide that if you go visit that bit-torrent illegal movie website that causes huge download consumption, they will slow or block you? This just seems like common-sense good management to me given that the download kiddies don't want to pay.

If they can't produce more broadband, and it seems that is merely a fictional future aspiration, then they need to ration it, and make high-speed lanes where they charge more.

I fail to see any freedom of speech issues here, as freedom of speech doesn't also imply an operational full-fledged printing production and media consumption entitlement.

I don't see that we can avoid the reality that we will have to pay more for the Metaverse.

Gareth Nelson

"I fail to see any freedom of speech issues here, as freedom of speech doesn't also imply an operational full-fledged printing production and media consumption entitlement."

Charging more for more data transfer is fine, charging more based on the type of content is NOT fine.

Gareth Nelson

"o $60,000 is a low salary, they earn more than that."

Actually, LL pay below market wages as is generally known

"o There are more than 300 of them now."
[[citation needed]]

"o There are more than 28,000 islands now."
[[citation needed]]

"o Costs of software as a service isn't only reflecting a salary of a programmer, but part of the operational costs of the office, equipment, server farm, etc."

Even factoring in these other costs, there's still a profit margin wide enough that it could be dropped down without significant problems. Of course, there's no point in debating this same fact over and over.

Prokofy Neva

Gareth,

This will be my last post to you, because I'll be happy to let others take up the parental duties and duties of continually trying to set you straight from your constant insolent effort to defy authority, and print utter infantile bullshit not based on any real experience in a constant manifestation of Opposition Defiance Disorder, which can be co-morbid with other conditions.

$60,000 is a fairly low salary; top Linden programmers get more than that and there isn't any credible source that you can actually point to other than gossipy hearsay among lifers at Linden office hours like yourself to prove that "LL pays below market wages."

If a salary is $60,000, that is only part of the employee cost, as you have completely failed to include, being untethered to reality, costs such as:

o payroll tax
o SS
o health insurance

which can all together make a $60,000 employee really cost more like $80,000.

I don't need to make any citations to the FACT that there are more than 300 when the Linden blogs state this. Google it. Ask a Linden. They'll tell you. I don't play this game. The demand for citation goes back to you, as you are talking out of your ass.

Ditto the number of islands -- ask the Lindens. They'll tell you. Good God, you live at their office hours enough, you should be married to one of them by now.

There's every reason to go on challenging your patent bullshit. However, I'm on break : )

Melissa Yeuxdoux

Unfortunately, there are several issues under the umbrella of "net neutrality."

This particular one about Comcast is more an issue of truth in advertising. If Comcast were to come out and say what they were really selling, I think there'd be less of a firestorm about it--as it is, Comcast advertises high-speed internet transfer--and then penalizes those with the audacity to actually use it by intentionally disrupting the attempts. Would you be complacent if the phone company cut off your local phone calls if they ran too long, or that didn't have enough pauses (the phone system is smart enough to conserve bandwidth by not transmitting silence)?

Another issue that falls under the "net neutrality" umbrella is ISPs degrading or blocking service to those communicating with sites that are viewed as competition for services the ISP sells. Canada has had some notorious examples of this, and I'm hoping that never comes to the US.

Prokofy Neva

I don't see that the analogy with telephone service holds. Voice on a phone, from what I understand, is much lighter stuff than images from movies and virtual worlds and photos in email attachments and everything else. So the resources used are greater, are they not?

I don't see anything backing up the claim that Comcast advertises a high-speed service that it then doesn't make available, if in fact the problem is that someone tries to hog it all and slows down the service for reverybody. This is merely the tragedy of the commons, and a good steward has to act accordingly.

Why is the onus put all on the company, and not on this individual hog? That's what I'm simply not getting, and which all these entitlement-happy freetard freaks touting this stuff aren't able to justify.

As for this idea of competition among companies, I'd also like to see the examples and research them, as I suspect this is a side issue being raised to attack the whole concept of net congestion and transform it into "net neutrality" to justify hogging.

I never see anybody really tacking the issue of overconsumption.

Clubside Granville

As long as the off-topic musings on the Lab's pricing is being tolerated, I have to throw in with Gareth, as he is echoing things I was saying shortly after signing up years ago. While you're right about overhead not being included in Gareth's first cost breakdown, I think he was going for a general observation on overpricing rather than a literal attempt to identify the Linden's gouging.

Prok, I think you are attaching too much value to "maintenance and programming and updating on a platform that provides streaming 3-D contiguous world imaging from an asset server dynamically updated constantly by user generated content". I created and help maintain an online education system where tens of thousands take tests that are computed on the fly, saving their answers, auto-grading and alerting when essays need grading plus a full forum and messaging system. Transferring 3D coordinates is no different than text, in-line images no different than textures. Second Life is no wonder or mystery, its assets are no different than those that make up a web page. There is a cost in storing and retrieving this information in both disk storage and bandwidth, but it is not any different than that of any other Internet service, so no special "understanding" of the Lab's costs should be added in approximating their costs.

Back to the original figures: Gareth's being a little conservative by going with server rentals rather than purchases which will amortize and cost even less in the long run. Its the Linden's development incompetence that allows so few regions to operate on a single modern computer, but even our continued funding of their malaise factoring in they are easily making margins akin to loan sharks.

The easiest way to see this reality isn't in the cost numbers or speculation but in the "profitability". They didn't reach a profit until a certain number of regions were finally employed. It took sheer mass (and thus lowering the average total cost of ownership per machine) to reach this point. They could have gotten there by being smarter but as we all know "The Love Machine" rewards no one. Instead their poor software and most likely bad hardware and hosting decisions have colluded to keep the costs higher than Gareth's "real world" numbers would show.

As I said two years ago, the original Xbox running on an i386 hosting 32 simultaneous users looked and performed better. 16 players on a custom map running P2P under Far Cry did the same. The hardware costs are a problem in many ways for both sides, but they point out the more pervasive fact that the software is garbage in design and its woeful execution.

Prokofy Neva

Clubside, you're talking again as a geek running this system *yourself*. The cost offered is for people who are *not geeks and can't run the equivalent*. It's like anything you buy as a customer that isn't wholesale or cut-rate because you are a regular customer.

You've just argued against yourself by pointing out that the Lindens were not immediately profitable, so even "overcharging" didn't do it for them. Bad hardware? Well, I don't see that people in the heart of Silicon Valley would be guilty of that -- they are using a server farm that also houses other businesses and nobody seems to be complaining.

I think it's good that you keep a critical stance to LL and their claims, but it's just not persuasive to me.

Is the software garbage? I hear different opinions on this. Obviously I can't form one myself. It's good *enough* to keep us all logging in *shrugs*.

Gareth Nelson

"I don't need to make any citations to the FACT that there are more than 300 when the Linden blogs state this. Google it. Ask a Linden. They'll tell you. I don't play this game. The demand for citation goes back to you, as you are talking out of your ass."

Read my posts again and the links I gave.

"There's every reason to go on challenging your patent bullshit. However, I'm on break : )"

:)

"While you're right about overhead not being included in Gareth's first cost breakdown, I think he was going for a general observation on overpricing rather than a literal attempt to identify the Linden's gouging."

I was attempting to look only at the private island profits and how they could easily survive cutting back, so yeah. My (VERY) rough calculations didn't factor in profit from premium accounts or misc business expenses.

Melissa Yeuxdoux

Yes, voice doesn't use much bandwidth, but the issues are the same, because telephone switches are designed around that lower bandwidth.

Indeed, an analogous issue came up in the 80s, when local telephone companies tried to charge hobbyists using modems or running BBSs more or make them buy more expensive services because phone switch capacity is designed around short phone calls (look up "Erlang distribution" for details), and people using their modems definitely DON'T conform to that. (Neither do chatty teenagers, but modem users were a safer target.)

Cable companies advertise a certain data rate, but gripe if you actually try to use it a significant fraction of the time. It would be different if they were up front about it, but they aren't. (And it's not as if there's a truly free market; we're talking companies (cable TV, phone local operating companies) that local and state governments have granted monopolies. If you want reasonable data transfer rates, in most places the phone company and the local cable franchise are your only choices.)

A place to start on the Canadian ISP issue would be here: http://blog.tmcnet.com/blog/tom-keating/shaw-communications-sued-for-requiring-qos-on-voip.asp

Prokofy Neva

I fail to see anything at all wrong with anything you are saying. It sounds like a biased and skewed world view to me. Resources are limited, and it's natural that a) they are commercialized and limited and b) local governments grant monopolies. That's how utilities generally work. Gosh, it's unfairt and evil, but most people seem to tolerate it and if it really was the evil you claim, people themselves would change it.

I fail to see the evil in it because i fail to see how having lots and lots of little providers competing adds anything of value to the consumer except confusion and poor functioning likely.

Also, this sounds more like a Canadian problem, these monopolies, than a U.S. -- in my city I know of at least 3 competing cable companies but one likely outstrips the other. That's life in the big city.

I fail to see why boosters of redistributive economics can't cap consumption if they are such believers in redistribution!

Somebody always has to pay.

Gosh, I don't hear you complaining about Google being the monopolist on search, dwarfing all the others, now why do you suppose that is?

Nicholaz Beresford

What cable companies do these days is to offer you an all-you-can-eat and then complain if you can eat more than they expected.

Offering those (flat rates or all you can eat) is calling for overconsumption, but if they can't handle it, they should not offer it and I don't think that offering volume rates has anything to do with net neutrality.

However, if they continue to offer it that way and then try to get extra money from the providers (be it youtube or secondlife) sounds wrong to me, because the providers are already paying their ISPs by data volume.

This sounds pretty backward for me because it practically says: We want to continue to offer our customers a skewed (flat) rate and your service (SL or youtube or whatever) may give some users an opportunity for gluttonous use of it, so you need to pay for your side (with your ISP) and for the user's side.

Where the straight solution would be to just charge users by what they use.

Ann Otoole

Don't confuse bandwidth charges with information access. What some of these so-called ISPs are trying to get to is to limit your access to the internet to only the commercial websites the ISP chooses to allow access to. This is not bandwidth control. This is information access and thought control. These are the companies that need to be put out of business.

Melissa Yeuxdoux

"Gosh, I don't hear you complaining about Google being the monopolist on search, dwarfing all the others, now why do you suppose that is?"

Because, as John Houseman would say, they did it the old-fashioned way... they EARNED it. Nothing is stopping anyone from starting a competing search facility; there happens to be a blurb on Slashdot this very day about a former Google search architect and her husband starting a competing search engine. Google can't emit fraudulent error messages if you try to use Yahoo, the way Microsoft did if you tried to run Windows on top of DR-DOS instead of MSDOS. There's no network effect; I couldn't care less what search engine you use, nor you which I use. If someone comes up with a better search engine, Google will be left in the dust just as Alta Vista and Yahoo were in the past.

John Lopez

Net neutrality has two prongs. The first is the technical side, where specific protocols are being lied to and told the connection failed mysteriously instead of being honest and just blocking them straight up.

Honesty has value: If you plan on forbidding or reducing the value of a service, say so. Lying about your provided service is not the road to financial or political success: there is nothing stopping a company from saying "we ofter super fast connections because we block torrents and games".

The second is the political side, where the bandwidth is throttled based on the affiliation of the site being connected to. This is where the claim that Google would have to pay extra or be cut off from their users comes in. http://www.businessweek.com/@@n34h*IUQu7KtOwgA/magazine/content/05_45/b3958092.htm This is nothing more than extortion by someone in the middle of the stream, as both Google and the client PAY FOR THEIR CONNECTION, just like everyone online does. There is nothing odd about expecting a paid for service to actually connect properly without bandits at every crossroads expecting additional pay, simply because you are successful or disliked.

To bring this closer to home though, Second Life is a bandwidth intensive application. I'm sure everyone in the SL business world will really enjoy it if the traffic gets blocked or throttled. I know you think that only snot nosed kids will be affected by a lack of neutrality, but a LOT of the industry thinks only snot nosed (or sex crazed) people are in SL. Really, why should some game about having sex get any priority?

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