Verizon inks paid peering deal with Netflix
gigaom.com
gigaom.com
I can't wait to see people freak out about and completely misunderstand this one, too, though.
It's interesting that Netflix is continuing to ink these deals while waging a PR war against the people they're contracting with, rather than just backing Cogent's play. If they're really concerned about this kind of thing, then it kinda seems like inking the deal and then complaining about it puts them in a really morally indefensible position, unless they're just counting on public hatred of the telecoms to carry them to an advantageous position.
It may be non-intuitive, but this kind of 'tax' is actually to Netflix's benefit. From now on, it'll be much more expensive and difficult for any other competitors to enter the on-demand video market. Regulation/taxes often help solidify the status-quo. Look at the healthcare/finance/education industries...
This move doesn't raise rates for competitors, but it certainly goes give Netflix an financial advantage that a non-established player wouldn't be able to gain.
That's been one of my primary issues with Netflix's behavior in this whole thing. They've presented this false dichotemy of "we pay the ISPs protection money, or we can't deliver our bits to you :(", and it's just...not true.
Here's a list of everyone that peers with Comcast. You might notice that the list is larger than "Cogent and Netflix": http://bgp.he.net/AS7922#_peers
https://peering.google.com/about/
https://www.techpolicyinstitute.org/files/amkinternetpeering...
"Some of the largest content providers have, in effect, created networks equivalent to those of Tier-1 ISPs. Google has the most extensive set of peering points, covering every continent, but Microsoft, Yahoo, Amazon and Facebook also have extensive peering. TeleGeography, citing Arbor Networks, indicates that “Google has boosted its share of traffic exchanged via peering links from 40 percent in 2008 to 60 percent in 2010.”
If deals like the Netflix/Comcast deal were made illegal, this would only tilt things further in favor of the existing big players, because if you have the kind of scale available that you can build out your own peering networks (like Google), then you can deliver your content for pennies on the dollar as compared to your competition. Transit is expensive. Paid peering allows companies like Netflix - miniscule compared to someone like Google - to achieve effective transit rates that are much closer to what Google can achieve than they could otherwise.
In general, in a world where the only choices are transit or free peering, smaller players could buy CDN services from CDNs that are large enough to qualify for free peering and multiple competing CDNs would drive prices down. It has already been observed that CDN pricing is about the same as transit pricing even though CDNs add value through locality.
In terms of financial resources? Not even close. Google utterly dwarfs them in terms of capability to build out and maintain networks.
I would love some info on CDN vs transit pricing. In particular, it seems somewhat apples-to-oranges, since CDN pricing is generally per GB delivered, whereas transit pricing is generally per Mbit of capacity. You can approximate a conversion between the two, but you'd have to be careful when comparing them that the comparison is valid.
I have to disagree here. I'm buying in the tens of Gb/second of transit (1 year terms), and its under $1/Mb. I define that as fairly inexpensive.
Comcast isn't specifically throttling Netflix, they're just not providing sufficient link capacity for primetime delivery of traffic (including Netflix) via some routes. Netflix could provide traffic across alternate (or multiple alternate) routes; as those saturate (particularly with the emergence of 4k streaming), Comcast's service as a whole would suffer. Anyone who was delivering traffic via Cogent to Comcast could attest to how awful their delivery was during primetime; if that were happening on multiple links, it wouldn't just be Netflix and a few other services that were slow, it would be the entire internet, from the perspective of the Comcast customer. This would serve to exert pressure on Comcast to upgrade those links.
It's not a pretty solution, but the issue isn't "Netflix is throttled", the issue is "Comcast is a shitty ISP", and Netflix peering with them directly does nothing to solve that. Degrading multiple routes will exert more pressure on Comcast to improve than just about anything short of Google Fiber moving in next door.
Google Fiber could move in next door and Comcast would still do nothing to improve.
They may be evil, but they aren't stupid.
Pretty much. They've made plain their envisioned future, and now they're haggling over the price. Netflix as a company doesn't actually need or want net neutrality, because free communications based on alternative protocols will undermine their lucrative position as the new hip entertainment provider. If you're giving Netflix money then you are responsible for helping to centralize (and thus destroy) the Internet.
http://knowmore.washingtonpost.com/2014/04/25/this-hilarious...
It's really a shame Netflix just gave up instead of fighting them, though.
Looking at those graphs, I notice two interesting things. First, Comcast, Verizon, and AT&T all experience downward trends starting around Q4 2013...which is right around when Netflix rolled out SuperHD to everyone (which would have increased throughput, and exacerbated saturated links.) Their trends roughly track each other...and the remaining ones tick upward when Netflix started routing directly to Comcast. Now that's curious (anyone care to traceroute Netflix's streaming edges from an ATT uverse connection?)
Second, there are two ISPs on that chart which don't have throughput issues. Cox delivers Netflix via XO, I don't know about Cablevision. Did they just miss the Evil Memo or something? Or perhaps there is a fundamentally different issue at play here other than thugs demanding protection money?
Fool me once...
At their stage, they are taking advantage of their place in the short term and this benefits them heavily while playing the PR side against it. But in the end they may have figured their own downfall when they don't own their own network and can't compete with comcast, verizon, cox, etc's own streaming networks which will have all the cable channels as well as other content.
They could have changed law with only lobbying the consumer, now it will cost them and everyone. It might be hard to imagine but the moment someone streams live sports and hbo the game changes dramatically. Would have been nice to have network neutrality last longer than 2 decades on the internet, it is over.
Hyperbole much? This is a peering agreement. It has nothing to do with "network neutrality"--a phrase that is vague and hollow enough to mean absolutely nothing.
Immediately after the Sept. ruling these Cogent connections seemingly started to downgrade in unison: http://knowmore.washingtonpost.com/2014/04/25/this-hilarious... They aren't providing faster service, they are providing the service levels they took away, the extortion is to get back to normal levels.
Netflix just made extortion part of the game behind the consumer line (of course Verizon and Comcast want that but Netflix just made their future much more murky). This will hit consumers in 2-3 years for sure. Tell me I am being hyperbolic in a year or two when your broadband/content services just doubled... in cost, while not doubling in speed or service. This also coincides with a Netflix rise in rates as proof already.
The definition that google gives when searching for "define network neutrality" matched my understanding and does not seem vague:
"the principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites."
That is my understanding. My comment was just pointing out that "net neutrality" is not considered a vague term by a considerable number of people.
I do think it is unfortunate that Netflix is incentivized to make this type of deal rather then their ISP.
The definition that google gives and I quoted does not not contain that phrase.
> If I have "equal" connectivity to content sources X and Y, but X sends 10 times the amount of traffic that can fit in its pipe, it's very "neutral" of me to do nothing about it. And then the experience sucks for everyone.
The ISP has the option to charge more per packet until it makes economical sense. The increased revenue would allow the ISP to increase infrastructure and incentivizes heavy users to reduce their use. That is one of at least a few options ISPs have while remaining net neutral.
It would be violating net neutrality if they were deliberately slowing down Netflix traffic within their networks, rather than offering to peer (provide a more direct or higher-bandwidth connection) with Netflix's transit partner.
I don't understand why the definition of net neutrality should be frozen, leaving companies free to invent new loopholes.
This is not new or unique to Netflix. Netflix is just the most visible casualty because their total traffic load is such a substantial chunk of the total.
So which ISP is next?