How Netflix came to pay Comcast for Internet traffic
qz.com
qz.com
Other customers paying $8/month to get this amazing Netflix service and are "forced" to "subsidize" Comcast customers, that won't elicit much tears from me. :P
while history {
history = true
}If someone told you in 2001 that they would start a service based on delivering millions of full HD video streams concurrently over the internet, would you be able to take them seriously?
Except Netflix is not pumping data anywhere. This data has already been paid for and is being requested by Comcast's network. They also are not asking anyone to "foot the bill" - they've offered to pay for it entirely.
Also, what was feasible in 2001 is a really poor indicator of what's a reasonable business model today.
The problem isn't Netflix. The problem is that a ton of customers are paying Comcast for 250 GB per month at 50 Mbps, which their infrastructure is incapable of actually providing.
Comcast should absolutely foot the bill. They are the ones unable to fulfill their end of the contract.
Data might only be sent once, but every internet transaction has two sides that benefit from the underlying infrastructure. Why is it wrong for the company who builds the infrastructure to charge both parties who benefit from it?
The landlord is charging me rent for the property I'm living in, and then charging me more when I have friends over for dinner.
It's not even about reciprocity of used bandwidth (that is used to be taken as the basis for free peering), but the provided value from the traffic flows.
And since there's an asymmetry in value (the request data from Comcast's customers is much more valuable for Netflix than for Comcast, and with the added local monopoly of Comcast, there's no real value for Comcast in those reverse flows, because it doesn't help its business position, market share, and just means net upkeep costs) both Netflix and the end-user ends up playing more to Comcast than what'd be reasonable in competitive market.
Number of payments by itself is hardly meaningful... Have you never received a parcel with insufficient postage, and been asked to pay the remainder (else it be returned to sender)?
How evil of the postal service, demanding to be paid twice (nevermind that they weren't paid in full the first time)!
I (and millions of others) pay Comcast a certain rate for a certain data plan. In my case, about $50/month for 50Mb down, 2Mb up, capped at 250GB per month.
So if I want to watch 250G of movies in a month, at those data rates, why should I or anyone else have to pay more? I've already contracted with Comcast for that much bandwidth.
The reality, of course, is that Comcast (and all other ISPs) MASSIVELY oversubscribe their own network. They don't have any where near the capacity to actually support what they sell. And they want Netflix to foot the bill for the buildout required to provide the capacity they claim they sold me.
You don't pay the post office a flat fee for the ability to receive all packages, but from my perspective that's exactly what I pay my ISP for.
Granted you do pay the post office in the form of taxes, but IMO that situation is different enough to make for a very poor analogy.
That seems to be more of a comcast issue.
Or, read the entire petition, which is a good read; it’s 100 double-spaced pages. The PDF also includes other evidence: 22 pages of statement from Ken Florance, VP of Content Delivery (PDF page 110) and 100 pages from economist David Evans (PDF page 134).