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Comment by anoncow | Hacker News Reader

Someone please clarify my doubts. When I run a server, I have to pay for bandwidth costs. For eg. My website hosted on linode gets me 20TB of data transfer limit. I expect end users to be able to view content worth 20 tb of up/down data transfer. Netflix runs its own servers but the ISP providing connectivity must be already charging Netflix for a certain bandwidth and data transfer limit. If the ISP is charging for data transfer already, I expect the ISP to provide the entire service. For eg. Let us assume that Verizon charges netflix 1 usd per tb of data transfer. And Netflix uses 20000tb of data in a month. Then Netflix owes Verizon 20000 usd a month. And Verizon has to serve the data according to the bandwidth agreed to.

Is Netflix not paying Verizon for the bandwidth and data transfer?

If Netflix is not paying Verizon then why does my hosting provider charge me for bandwidth and data transfer?

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Netflix has their own ISP.

Netflix's ISP and Verizon pay eachother nothing to exchange traffic (called peering).

Verizon wakes up one day and says, "Shit out of all the ISPs we peer with, Netflix and their ISP is responsible for 35% of our traffic, we have to do huge upgrades on the link to them, and they aren't paying us a dime"

That's my understanding of what is going on.

Does Netflix's ISP pay anything to anyone? If no why does linode make me pay for data transfer?

Thanks for replying (Linode is just an example)

To prevent you from abusing the network and keep their data center not congested, and have other customers service not degraded by your uses.

Linode isn't an ISP, they still have to deal with ISPs for the end user, which is why it is different.

The traffic exchange would only occur once a customer routing data over a Verizon network uses Netflix, no? Meaning that the 35% of the Verizon network usage that Netflix uses, is due to customers actually using the connection they pay for, no?

As an ISP, I think if you are offering 100Mbps unlimited in/out, you should Expect full thrust from every connection, or at least be capable of delivering that. I know it's not really realistic, they need to assume that some people, sometimes are disconnected but if I am paying for a connection and a certain level of throughput, I expect to get that.

Just my point of view, correct me if my assumptions are incorrect!

Do you have any idea what internet service would cost if they built every node to handle 100% of the Internet's traffic?

Hence why I said "I know it's not really realistic". To answer your question though, I have no idea. Do you? I'd love to know what an ISP builds to expect in the terms of constant traffic..

Over subscription is what drives economies of scale in IaaS and PaaS. It allows companies to drive down prices and increase performance for the p99 customers.

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