Netflix Launches Its Own Content Delivery Network

1sockchuck writes "Netflix has launched its own content delivery network to manage data delivery for its streaming video service. ISPs can choose to host caching appliances in their data centers, or peer with Netflix at Internet Exchanges. 'Netflix will provide either form of access at no cost to the ISP,' it said. As part of Open Connect, Netflix is sharing its hardware appliance design and the open source software components of the server. Does this mean Armageddon for the CDNs currently serving Akamai? Not really, according to analysts, citing the leverage Netflix had in dealing with providers."

Comments

What about Comcast?

[Anonymous Coward]

So Comcast is going to roll over for this? Comcast is an integrated Cable TV/ISP, which wants to favor their own delivery mechanism and content relationships. Only Common Carrier status for Internet delivery will break that stranglehold - lots of luck for achieving that in the USA!

- Leonard

Re:What about Comcast?

[TubeSteak]

If Netflix can get its hardware inside Comcast's network, does that mean Comcast won't count it against their data caps?

Re:What about Comcast?

[milkmage]

FWIW when I got comcast (internet only if that matters)... they told me my area gets X amount of bandwidth, and they won't signup any more users, if you don't average the advertised speed. I pay for 20. early AM and late night (say before 8AM, and after 8PM) I can get 30-35 sustained... during peak hours, drops to about 15-17. last mile is not really an issue for me (and comcast is about the only high speed network in town - we have very little to no fiber where I live because of local politics)

as much as I want to hate them, they do deliver.. (and I haven't seen an outage in 3 years)

Re:What about Comcast?

[dgatwood]

I think we can safely say what would have happened. Almost nothing. In the U.S., somewhere around a quarter to one fifth of the people are spread out across approximately 97% of the land mass, and the other 70-75% are concentrated in the remaining 3% of our land mass. Even with the best wireless technology we have at our disposal, covering much of the U.S. is infeasible because of geography (mountains, etc.). And the cellular phone industry has doubtless poured more money into wireless research than the total spending on ISPs nationwide.

Let's take my hometown in Tennessee as an example. Many of my friends did not have cable service because even with subsidies, it was not profitable. It costs about $30,000 to run a mile of coax or fiber, and in many places, that would serve only one or two households. Even if they stood to make $30 profit per month (unlikely), it would take over 40 years to break even, without factoring in such pesky things as interest.

So what about wireless? Realistically, most wireless Internet services cap out at somewhere on the order of ten miles or so. Assuming you placed a cellular tower ($150,000 or so) in a location where it could serve the areas between towns, there are many areas where a tower with a ten mile radius would serve only a low four-digit number of households). Many of these areas do not even have basic cellular phone service today from any carrier.

Given that probably 90% of those four-digits worth of people live in a town (and thus would likely already be served by a wired Internet provider because it would be profitable to do so, subsidies or not), you're talking about almost half a grand per household served. And that's just for the initial tower construction costs. On top of that, you have to add the cost of a trunk line out to the middle of nowhere (at $30,000 per mile times 10+ miles to the nearest town), plus hundreds of dollars in customer premises equipment costs for each household (that many of those households could not realistically afford). Granted, $2,000 per customer is a far cry from $15,000, but it is still something that no sane person would invest in.

Even if you could miraculously crank up the radius up to 30 miles, it would barely be profitable, and short of insanely tall towers, that's about where the curvature of the earth itself will bite you in the you-know-what.

And the bigger problem is that all this proposed infrastructure is unlikely to pay for itself before the technology becomes obsolete.

In short, there is just no feasible way to solve the last-mile problem except for either A. the government forcing private enterprise to build out the wired infrastructure in exchange for the right to serve other, more profitable areas or B. the government building the infrastructure itself. Your viable choices are basically the system we have now or socialism. Take your pick.

Re:What about Comcast?

[hairyfeet]

Or maybe, just maybe, Comcast is like the cableco in my area and oversubscribing like mad while pocketing all the profits and not spending dick on upgrading squat?

Sadly I've found traveling around the south that most ISPs while making money hand over fist frankly have creaky as hell last miles and many are even ignoring places where they could make money simply because it would require spending a dime and they are too fucking greedy to do that. I know that when I was there in the mid 00s there were places in downtown nashville without cable OR DSL because they were both too fucking greedy to spend a dime on infrastructure while the places that did have it were oversubscibed horribly. One of the reasons i love my current apt is I'm the only one getting cable net in the whole building so i have the pipe pretty much to myself but I can tell you in many areas cablenet is so damned oversold it practically crawls between 9AM and 11PM.

So he may have just found out as i did that they will sell 100 people on a line that could reasonably take 30 and then stuff the money in their pocket instead of adding more pipes. Its sad but that's ISPs in America, too fucking greedy and shortsighted to see anything beyond the next quarter.

Content providers won't do it

[Hamsterdan]

Seriously, The Cablecos and Telcos won't probably even bother. In an *ideal* world, they would do it to save bandwidth (and therefore not charge their costumers for that bandwidth), but I really doubt Videotron, Rogers, Bell and all the other money-hungry monopolistic providers will do it. It would eat into their Rape-the-customer-tv business. Besides, since we can get about third-world country 50GB/month of bandwidth here in Quebec, how many hours of Netflix does that give me?

Those big ISPs already have a bunch of cdn servers (Akaimai comes to mind), but they still count their usage towards your monthly cap, even if it doesn't cost them a penny on their peer links (since the content is already mostly cached).