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Level 3 Shaken Down By Comcast Over Video Streaming
An anonymous reader writes "It looks like the gloves are really coming off; Level 3 Communications had to pony up an undisclosed amount of cash to keep Netflix streaming to Comcast customers. Perhaps now the FCC might actually do something to ensure that the internet remains open. Level 3's Chief Legal Officer, Thomas Stortz, said: 'Level 3 believes Comcast's current position violates the spirit and letter of the FCC's proposed Internet Policy principles and other regulations and statutes, as well as Comcast's previous public statements about favoring an open Internet. While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast's decision goes well beyond this. With this action, Comcast is preventing competing content from ever being delivered to Comcast's subscribers at all, unless Comcast's unilaterally-determined toll is paid — even though Comcast's subscribers requested the content. With this action, Comcast demonstrates the risk of a 'closed' Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content.'"
You should have done what FOX and NBC have done in the past - Cut off Comcast. When that happens the customers invariably blame the cable company for being greedy, not the broadcasters or Level 3 or netflix
Then Comcast would be forced to stop banning netflix, else risk losing customers.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Keep the government out of my internet! The corporations can solve their problems in a way that the consumer is not effected!
Right?
Guys?
anyone?
I generally respect Karl Denninger's viewpoint on these issues since he was one of the people actually involved in building out the internet.
Yes they use a lot of bandwidth, that Comcast's customers pay for in overpriced monthly fees.
So glad I don't have to deal with Comcast anymore
Considering that Comcast posted a net income of over 3.5 billion last year I think asking them to reinforce their infrastructure so they can be competitive is not outside the realm of being reasonable.
Then Comcast would be forced to stop banning netflix, else risk losing customers.
Uh, that's not how I see it going down. That would be like a staring contest and I'd bet that Netflix would blink first.
Customer: Hello, Netflix, I can't stream your movies anymore.
Netflix: Uh, well, that's your ISP's fault for not coordinating with our CDN.
Customer: But the rest of the internet is working fine.
Netflix: Yes, well, you need to get a different internet provider.
Customer: Comcast is the only broadband provider in my area.
Netflix: Well, write them an angry letter because it's not our fault.
So do you think the user is going to quit using Comcast or do you think they'll have no choice but to stop subscribing to Netflix since they can no longer stream movies? I think the latter is more likely what would happen. It's different because Fox and NBC provide a lot of free content and can easily tell the customer that their ISP is blocking the news. With Comcast, they know that Netflix is pulling down tons of money (look at their stock value) and they know that if they hold out they can wring more money out of L3 and, eventually, Netflix. And since in most of Comcast's realm there's a complete lack of a competitor. That's the real issue here, that Comcast customers often have no choice and there's a barrier of a cost to entry for anyone else to enter in as competition with them. Fix that and you solve this whole problem because then your scenario might work if users are really upset enough to change ISPs when Netflix doesn't work because their current ISP is trying to negotiate for more cash.
My work here is dung.
Comcast says the issue with Level 3 is a peering dispute and says it "offered Level 3 the same terms it offers to Level 3s CDN competitors for the same traffic." The issue seems to be that the Level 3's addition of Netflix as a customer may have altered the balance of the traffic exchange between Level 3 and Comcast. In other words, Comcast says the volume of traffic is the issue, while Level 3 says the type of traffic is the issue.
Finally, a real example people can point to and say, "SEE!" when talking about net neutrality.
Do daemons dream of electric sleep()?
If Comcast are a monopoly supplier (ie customers cannot get broadband from another ISP) then maybe the customers who cannot get Netflix (or whatever else) should bring a class action suit against Comcast.
They could, but not many consumers are interested in getting a $15 coupon off Comcast cable eight years from now when the lawsuit is over. Our courts, the FCC, the DoJ are all so pro-big business as the result of both political parties' appointments at the behest of lobbyists that breaking antitrust law is just another profitable new business strategy.
Notice that the dispute is not between Comcast and Netflix -- it's between Comcast and Level3, which doesn't create content, only owns pipes. Level3 and Comcast have a "peer" agreement; they generate a similar amount of traffic, so they accept each others' traffic for free. That's a typical arrangement. However, this was before Netflix changed CDN from Akamai to Level3. Akamai sends much more traffic to Comcast than it receives, so it pays Comcast for receiving the traffic. That's also a typical arrangement. Now that Neflix will be going over Level3 instead, Comcast is just trying to negotiate the same deal w/ Level3 as with Comcast:
Net neutrality may be an important issue, but it's not the issue here.
TCP: Why the Internet is full of SYN.
As soon as authority gets involved in commerce, the market ceases to be free, and falls prey to regulation and rent-seeking.
That may be true, but there's a catch. There's a minimum amount of "authority getting involved" required to have a free market in the first place - you need stuff like courts and police and land ownership. It turns out that minimum level is also enough that the market will inevitably cease to be free and fall prey to rent-seeking.
Not only that, but both regulation and rent-seeking can occur for reasons other than Government intervention. Take a look at how the stock market functions, for example - the vast majority of both regulation and rent-seeking is carried out by the stock market owners themselves. The Government regulations tend to be restricted to eliminating fraud, and fraud has no place in a free market anyway. Alternatively, look at scientific journals.
Full disclosure: I worked in a Comcast department that helped to determine what future internet bandwidth requirement were going to be. They fired me for reasons I don't feel like getting into, I'll try to give an unbiased account of what I think their thinking is.
Honestly, Comcast is extremely frugal. This can be both good and bad. In 2008, Wall Street types were encouraging them to take on a lot more debt before the debt bubble popped.
They do a lot of things in order to free up bandwidth and to satisfy bandwidth demand. It's not like they are sitting on their butts and collecting money. But what they are not going to do is put fiber optics straight to your home, which would be the clearest way to expand the amount of bandwidth. That is extremely expensive and only Verizon is doing that. No other telco is doing that.
When they are converting analog channels to digital, they are doing that to free up bandwidth. They are trying to roll out Switch Digital Video in order to free up bandwidth (80 or so channels which barely anyone watches in a given service group will be swapped in and out when needed). They split off customers into different service groups to mitigate this as well. They are constantly monitoring this and a lot of hard work goes into this.
What I think is going on is not that they are worried about cable revenues going down (and I think they know that it is inevitable) but they are freaking out about an increase in web video eating up all their bandwidth. I can't be certain about this. But you have to also understand a corporation has several different parts. One part might not care about something while another part may view Netflix as an existential threat.
So while I would love to bash Comcast because I feel they screwed me over, I can't sit here and tell you that they aren't doing anything.
However, Verizon does have a superior product in my opinion which works better for reasons I could get into. But that basically comes down to the fact they don't have much legacy equipment on their system and they went with fiber-to-the-home instead of fiber-to-the-neighborhood.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.