Major ISPs around the world have already connected to Open Connect, including Frontier, British Telecom, TDC, Clearwire, GVT, Telus, Bell Canada, Virgin, Cablevision, Google Fiber, Telmex, and more
But then, Cablevision in general is shocking -- when you compare to most other cable ISPs. I can sustain 130+ megabits day or night on a 100 megabit service tier, with the reliability of dial tone.
Other ISPs need to follow the Netflix/Cablevision partnership model. People who have that, worry about moving and losing it.
There are four invariants as I see it:
1) Netflix is using a significant amount of a limited resource (bandwidth) 2) If Netflix doesn't work, consumers blame their ISP, not Netflix 3) The consumer is going to pay for this bandwidth, whether via ISP or Netflix 4) Consumers don't like caps or understand special packages that differentiate between packets routed one way or another
If Netflix doesn't pay for this bandwidth, then ISPs need to pay for it - and consumers will pay more to their ISPs to cover these costs. That means that consumers that don't use Netflix will be subsidizing consumers who do use Netflix.
IMO ISPs should charge Netflix so that Netflix can charge higher prices to users who are using more bandwidth via Netflix. That better reflects the link between who's using a limited resource and who's paying for it. Unfortunately, because of point (2) above, Netflix has quite a strong bargaining position.
There is a cost involved with peering, even if the peering relationship is "free". That cost is the crux of much of these issues today, as Verizon (and Comcast and others) feel that Netflix should pay for their own in-house upgrades, because Netflix is creating the need for those upgrades.
Netflix argues, and I agree, that the customer is creating the demand for the data, and the customer is paying for access to the data, and the customer is paying for the infrastructure to get the data they're requesting.
OpenConnect means "You're welcome to spend a bunch of money upgrading your interconnection to our free network"
>or can save even more transit costs by putting our free storage appliances in or near their network.
They don't have to interconnect to anyone. Netflix is even offering them storage devices to keep the traffic internal to their own networks.
Or colo their equipment https://www.netflix.com/openconnect/hardware . If upgrading interconnects is such an expensive issue, surely these ISPs could find 4u somewhere to stick one of these boxes in?
ISPs complained about the amount of traffic originating from Netflix.
This traffic was requested by the ISP's customers, and the bandwidth to carry it was promised by the ISP.
But, still, the ISPs were unhappy. So Netflix approached them and said they are willing to offer local caches of Netflix content, for free, to any ISP that requested it to reduce network congestion.
This was a gesture of good will by Netflix, not an attempt to outsource their hosting costs. It is, fiscally, a loss to Netflix because they need to purchase and maintain the storage appliances for open connect partners.
In fact, 100% of Netflix traffic outside the US and 90% inside the US is served from Open Connect[0]. It is actually a shift of the location of the serving hardware that allows both parties (the ISP and Netflix) to save on bandwidth. This is a net win for everyone.
[0] http://arstechnica.com/information-technology/2014/05/netfli...
The ISP is allowing Netflix to bring caches and servers to their interconnect so that the ISP can meet the demands of its users who are requesting that data.
When should an ISP give out "free" things? When the quality of service for their customers requests depends on it.
It's that simple: Customers request data, and ISPs have an obligation to deliver that data once it arrives at their local network.
What you call "Free hosting" and "free upgrades", I call "upgrades for requested service paid for by my monthly bill".
Because when I request data, and that data requires infrastructure to reach me adequately, then I am paying for that infrastructure by virtue of my monthly bill, and my decision to use part of my capped bandwidth on that service.
Remember: residential internet is capped because "users must pay for their use, and infrastructure can't handle too much demand so we need to charge users to upgrade according to their usage pattern". So therefore, I'm paying for that Netflix interconnect, it's not free, I pay for it, because I pay for 300GB of data a month and all of the necessary infrastructure to deliver it!
If I have a network and my customers use Netflix and aren't going to not use Netflix because I don't want them to, then part of my job is to ensure that my customers get the bandwidth I've promised them. (This isn't how it ACTUALLY works but how it's SUPPOSED to work)
As an ISP I have really rather large amounts of bandwidth in the last-mile at least in aggregate. Let's say that I can reasonably offer 20Mbps to each of my 1mm customers from my POPs to their houses. That's 20Tbps in aggregate. I probably don't have 20Tbps worth of back-haul from all my POPs to all the peering stations where I actually get the customers connected to the internet at large.
If network traffic is all long-tailed and the biggest use of bandwidth is 1% of capacity and it goes down from there "free hosting" doesn't make sense. But what if traffic to one company makes up 30% (or 80%) of total back-haul utilization at peak hours? I'm spending a lot of capacity for a single destination.
Now what if that place offered to create a magical wormhole from their servers to my customers at my POPs such that a large fraction -- say 80% -- of my customer's traffic from/to them never hits my back-haul it just appears out of thin air at the POP. Would I consider this a good deal? Depends on how much I pay for the back-haul versus how much electricity they're going to use at the POP. All-in I would suspect that it is a good deal thinking in these terms.
That's precisely what the Netflix appliance is. It's a way to give the customers Netflix without costing any bandwidth on the back-haul network that ISPs operate.
The reason that ISPs aren't all jumping right on this (despite the likely cost-savings) is that they view Netflix as the competition and they're prefer an adversarial relationship that hopefully puts Netflix out of business rather than cooperating and in their minds speeding their own demise.
So the rule of thumb you're looking for is that ISPs should start giving out free hosting when it's cheaper to give free hosting than to pay for the back-haul.
It makes sense, then, that one of the few large cable companies that uses Open Connect is Cablevision, who's CEO is on the record saying "Ultimately over the long term I think that the whole video product is eventually going to go to the Internet."[1]
He's one of a few that has accepted the eventual fate of cable TV, and so his business decisions aren't biased by a need to delay the inevitable.
[1]: http://online.wsj.com/news/articles/SB1000142412788732342060...
Lots more with this search: http://www.dslreports.com/nsearch?cat=news&q=comcast%20caps
The problem is that the last-mile providers try to extract money from netflix for a service that the consumer already paid for (deliver those video bytes)
There is an argument there, in that it costs more real money to deliver video bits the a la carte Netflix way than the cableco broadcast way, but I believe the conflict of interest remains an issue, and the prices I see for exceeding these rather small caps don't strike me as fair.
(Albeit AT&T's, the only choice I have aside from a not so reliable WISP, are particularly ridiculous: 150 GiB/month including I'm not sure what overhead for a continually rising price 2nd from the bottom "up to" 1.5 Mbs down/300+ Kbs up line that currently costs $36/month, each additional 50 GiB costs $10. We'd get a faster line so my father could watch video, at $5/month extra each increment, if the cap wasn't so low and the overages so high.).
The issue you're pointing out is the lack of net neutrality - but that is orthogonal to the pricing.
So you were, sorry about that.
I suspect that the real reason that ISPs like Verizon are resisting, is that with open connect in place there would be nowhere left to hide and blame the internal ISP bandwidth problems.
And I'd say the threshold is the point at which you are no longer to deliver the content by other means.
If those two conditions are true, I am sure ISPs will accept your offer.
The Internet is a collection of public and private networks. When it costs more to upgrade the linkages between your network and everyone else's than to host a server inside it, that is when the ISP should pay to support a local resource.
You're comparing apples and oranges, really. If your website ever reaches the point where traffic starts to saturate an ISP's connections, I'm sure they would be willing to discuss a local CDN resource with you, too. Whether they offer to pay for that or charge you for it depends largely upon how stupid and/or greedy their management is.