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Why You'll Pay For Netflix — Even If You Don't Subscribe To Netflix
Velcroman1 writes "At the 2013 Consumer Electronics Show, Netflix announced Super HD, an immersive theatrical video format that looks more lifelike than any Web stream, even competing with Blu-Ray discs. But there's a costly catch. To watch the high-definition, 1080p movies when they debut later this year, you'll need a specific Internet Service Provider. Those on Cablevision or Google Fiber are in; those served by Time Warner or a host of smaller providers will be out of luck. But regardless of whether you subscribe to Netflix, you may end up paying for it, said Fred Campbell, a former FCC legal adviser who now heads The Communications Liberty & Innovation Project think tank. 'Instead of raising the price of its own service to cover the additional costs, Netflix wants to offload its additional costs onto all Internet consumers,' Campbell said. 'That's good for Netflix and bad for everyone else in the Internet economy.'"
Yes, they want to upgrade for fast low latency connections, and the people with Pentium IV machines will not see the benefit. Just like the people who were paying for dialup didn't see the benefit of pipe-size increases that were in place to accommodate DSL.
But while net neutrality doesn't allow them to charge for "Netflix" (which is as it should be), there is nothing stopping them from charging extra for the awesome bandwidth that will get to the customers, and to use that extra charge to pay for the infrastructure upgrades. These upgrades during low-Netflix-use times may benefit others.
Right now I pay $120 a month for 25Mbits, no cap. My friends pay $80 a month for 20 Mbits with a 250GB cap. So they already have everything they need in place already. Watching 10 movies a month and doing nothing else, you would blow through the cap and need the upgrade. Article's author is a troll.
Netflix is encouraging my ISP to build out infrastructure, and I'm supposed to be upset that I have to pay for it? More bandwidth is good for everyone, and can be used for anything, not just Netflix. This is unequivocally good.
Give me Classic Slashdot or give me death!
This is more neo-con style stories that want to allow ISPs to charge as they see fit.
Total BS. It should not even be on this site.
All of these cable companies want to charge Netflix for using their bandwidth. Netflix has responded by saying, essentially, that to use their highest bandwidth services on your network, you'll have to let us connect directly to your network. Netflix will still provide all of the servers and other equipment. Comcast, Time Warner, and whoever else only need to give them a location to tie into their network. I, as a customer, am already paying Comcast, Time Warner, and whoever else for that bandwidth. There is no extra cost for anyone else, because no extra infrastructure is required.
To me it is a stretch. The ISPs are not fools. If the Netflix customers want special high speed access, they will be forced to cough extra cash for that privilege. And that money will upgrade the network for all customers. They may not be able to tack on a "fee for being a netflix customer". But they surely will tack on a fee for "50 Mbps service with guaranteed network latency of less than 200 millisecond" or whatever is the technical spec.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
This is the same old story, cable companies want content providers to pay them to reach their customers.
The 1080p Netflix service is only available when the ISP allows Netflix to deploy CDN (Content Delivery Network) nodes in the ISP's network.
Now true this is unfair to those ISPs who don't allow Netflix to deploy CDN nodes, but in general, CDNs save both the content provider and the ISP money: instead of traffic traversing the ISP's Internet connections, its served locally from the CDN nodes. So it acts to save the ISP money, not cost them. If 1080p videos are twice as large, but things are cached in the local network 75% of the time, the ISP sees substantial savings.
The only reason a major ISP would not want a Netflix node is that they are worried about Netflix competing with their (non Internet) TV services.
Overall, the Fox "article" is clear propaganda, written by and interviewing those who either, through ignorance or will, misunderstanding how CDNs operate.
Test your net with Netalyzr
I remember reading an article years ago about how Yahoo! only payed for half of their transit costs. Since they were/are such a huge content provider, many ISP's wanted to peer with them. It makes complete sense to connect content to eyeballs in the most cost effective way possible. This has been going on for ages. This is now the Internet works, reducing transit costs by peering is nothing new.
The only difference in this case is that Netflix doesn't want to push their super HD content over their transit links. I would expect that ISP's don't want it either. The solution is a win-win for ISP's, especially ones that have a lot of Netflix customers.
This has always been my point with net neutrality. Net neutrality is worried about traffic shaping, etc, but I could prefer one VoIP provider over another by making sure the peering connection to their network is low latency compared to the transit link. I'm not shaping the competing traffic or blocking it.
So basically this is a Faux News article arguing against net neutrality.
ESPN already does this. You can only view the ESPN360 website if your ISP pays ESPN a fee for every one of its subscribers. It is a small fee and most ISPs have concluded that passing that fee along to all of their subscribers is worth it to keep those who would jump to another provider in order to get access to the ESPN360 website. ESPN claims that ESPN360 is a free website, since they get to hide the charge in your Internet bill (the ISP is not going to break it out because then the people who have no interest in ESPN would scream, but since it is so small most of them are completely unaware of it).
The truth is that all men having power ought to be mistrusted. James Madison
What's going on here isn't about Netflix, it's about bandwidth. It boils down to: the Netflix HD service requires a lot of bandwidth to the end user, Netflix is setting it up so the ISPs have access to the high-bandwidth external connection needed to deliver the streams to their networks, now the ISPs are trying to figure out how to allocate costs for the bandwidth on their networks to deliver those streams to the users. And right now I don't see a problem. My ISP has no regulatory problem whatsoever charging different prices based on the bandwidth available to me. So, do that. If the user wants the extra bandwidth needed to deliver the HD video stream and still be able to do anything else without mucking up both, he's going to have to buy the higher-bandwidth Premium service instead of Standard. If he doesn't, he's going to have to live with HD streams that stutter and jump and Web sites that load slowly or fail to load completely while the video's streaming because the ISP's throttling his traffic to the rate he's paying for. End of cost-allocation problem.
And I'd note that it's not Netflix demanding bandwidth on the ISP's network. It's the ISP's own users asking for the bandwidth. Netflix doesn't send a single packet to an ISP until a user of that ISP connects to Netflix and asks them to start sending data. And the ISP has explicitly sold their service to their users as a way to do that, to access sites and services on the Internet. That's why they're called Internet Service Providers: the service they offer is providing access to the Internet. If their users are requesting more data than the ISP's network can handle, seems to me that's an issue between the ISP and it's customers. I'm sure the ISP would rather side-step the issue, but I don't see where that obliges anybody else to help them. If I'm ordering things delivered to the apartment complex I live in and the complex has a gate that the delivery trucks won't fit through, that's not the delivery company's or the store's problem. That's between me and the complex to deal with.
News: Netflix is rolling out higher definition and higher bandwidth video qualities (similar to what is happening with most internet services).
Not news: Higher bandwidth actually requires more bandwidth, so ISP's must upgrade infrastructure.
Slashdot (apparently no better than Fox): You'll all pay more because of Netflix!!! Even if you don't use it!!!
Me: WTF?
Of course, when I saw TFA was on Foxnews.com, I realized what was really happening here.
Akamai has done this kind of thing forever. When I worked at Network Operations for the university I work at, Akamai approached us. They wanted to install cache engines in our data center. They would provide us all the hardware, 3 fairly high end servers and a switch, as well as support for setting them up. All we had to do was put them in.
Net result? About an immediate 5 mbps average drop in our traffic, more at peak times. This was back in like 2002, and we only had like 100 mbps of Internet total.
It was all kinds of great. We had less network traffic, people got much faster videos, MS updates, and so on (Akamai is used by a lot of companies), and of course Akamai saves on bandwidth on their end. Everyone won, it was better service/less cost for all parties.
Yes. I'm surprised that nobody else has read into this. All Netflix is doing is localizing their content in a small, 4U appliance inside of the ISP's.
From what I can tell is that this has potential to be a win for everyone. As you say, this is a win for ISP's, as it cuts down on internet traffic at their peering points - where things tend to be the most expensive - it keeps traffic inside of their network. This is also a win for the consumer, as it can deliver higher quality video. This is also a win for Netflix, because they can lower their internet bandwidth costs by moving their content to these localized (or regionalized, as the case may be) appliances once and serve streaming content to all customers on an ISP's network.
-Turkey
Per Ars Technica, this thinktank's got a history of opposing Net Neutrality.
Actually, read the Ars article. It's better quality than this paid hit piece. Did anyone notice that the final link in the summary goes to Fox Propaganda?
Hail Eris, full of mischief...
E pluribus sanguinem
As soon as I saw that the author of the article is "Fred Campbell, a former FCC legal adviser who now heads The Communications Liberty & Innovation Project think tank" I knew it was going to be some kooky tea-bagger/liberty-for-corporations-slavery-for-customers bullshit.
Anytime you see the words Liberty or Freedom thrown around by a TeleCom "think-tank" you can expect the usual "were here to fuck the consumer at all costs" propaganda.
We play the game with the bravery of being out of range
The article paints the picture that Netflix should be paying extra money and charging its subscribers extra money to deliver high speed internet to them and that antiquated network neutrality restrictions make the whole thing unfair.
Netflix is now going to be able to offer even higher bandwidth services. In order to take advantage of them, you need a fast pipe (direct to your house and for your ISP to have good connections to the bandwidth sources) this means your ISP may need to cough up some more $s in order to deliver you the content that they are charging you for.
So let's review:
Netflix is paying for bandwidth in order to be able to provide the streams.
Consumers are paying for bandwidth in order to receive the streams.
If you don't purchase sufficient bandwidth from your ISP, then you can get the shiny new streams and you may need to give more money to your ISP if you want the highest quality service.
If you did purchase sufficient bandwidth from your ISP, but they have been enjoying being able to charge you for premium bandwidth (8mb/s down woot!) but they haven't been investing in the upstream bandwidth/peering/etc in order to deliver, then it's time for them to spend some more money on the infrastructure that your bandwidth is for.
The fact that 30% of the traffic is Netflix doesn't make it a Netflix problem. Netflix pays for its bandwidth. I want to stream Netflix so I spend extra $s to buy a bigger pipe. The only problem I see is the carriers raking in huge profits without investing in the infrastructure required.
Evolution: love it or leave it
But while net neutrality doesn't allow them to charge for "Netflix" (which is as it should be), there is nothing stopping them from charging extra for the awesome bandwidth that will get to the customers, and to use that extra charge to pay for the infrastructure upgrades. These upgrades during low-Netflix-use times may benefit others.
Their point is that, from a market perspective, a service provider "buying in" to a service like this through upgrades exclusive to Netflix (probably in the way of CDN servers/bandwidth) don't pass that cost on to just the consumers using Netflix. And while there might be some benefit to increased bandwith between you and the CDN hub, there is no guarantee that it will do you any good should you be interested in content that isn't on that CDN. The internet isn't a flat ocean of content that you pay for a little pipe full of, placement matters bigtime when it comes to overall throughput and latency.
Not too long ago Netflix showed a discrepancy between ISPs breaking down somewhere at the 1.8/2.0 megabit realm. Despite service providers almost univerally offering faster "guaranteed" rates than that (3 MBit to 6Mbit, which can be demonstrated with a *regional* bandwidth test) the bandwidth to the Netflix content was markedly lower. Why? Not all 3Mbit/6Mbit/25Mbit pipes are created equal.
Problem is that is what the ISPs have been selling. It screwed up the peering model already, and next it will impact the ISPs.
The issue here is that any ISP would rather be able to keep charging the same rate for the same service (or increasing the price each year), rather than get the same fee for providing ever-increasing bandwidth. As the infrastructure is paid off, the providers should either reinvest or drop rates; they prefer to do neither.
As I understand, Netflix's CDN, while access to "SuperHD" content is used as the lever to get ISPs to buy in, isn't SuperHD-specific. So, buy buying in, the ISP improves the experience for Netflix users while simultaneously reducing the load Netflix places on the ISP's bandwidth -- resulting in better performance for all of the ISPs users.
Right there -- 5Gb of throughput is probably a lot less that any but an extremely small boutique ISP is already having consumed by connections to Netflix at peak. Last I saw stats, Netflix was estimated to be the source of around a third of the peak downstream internet traffic.
So, let me get this straight... An ISP can either take advantage of a free peering arrangement (paying only connection fees), or accept a free caching appliance, and ultimate ends up SAVING money through reduction in transit, but somehow this is Netflix making non-subscribers pay for SuperHD? TFS is bullshit, pure FUD.
Almost every ISP in Canada is already on Netflix OpenConnect, qualifying for SuperHD. Some of them are huge, like Bell, some of them are tiny little indie ISPs, like Colba. Many of them didn't do anything specific to get on OpenConnect, but got it for free by already participating in a peering point that Netflix is on, or using a transit provider on OpenConnect.
>Their point is that, from a market perspective, a service provider "buying in" to a service like this through upgrades exclusive to Netflix (probably in the way of CDN servers/bandwidth) don't pass that cost on to just the consumers using Netflix.
Yes, that is their point, and the grandparent's point is "that's bullshit." They have a mechanism in place to charge subscribers by bandwidth. They are buying "content access" they can serve to dramatically increase the amount of bandwidth their subscribers pay for. If your ISP gets another $40 a month for the bandwidth to enjoy HD moves as often as you enjoy SD movies, then the consumers that are using it are paying for it.
No it's not precise to the penny, some of Grandma's ISP fees may be going for this, but some of my fees have been subsidizing her unprofitable dialup connection for years. But then, some of your text messaging fees are paying for 911 service that you may have never used. Some of the cost of your voice minutes goes into handset development for handsets you don't want to buy. At Mel's diner my dinner tab includes the cost of ketchup that other diners use, and I HATE KETCHUP!
The article writer, and the industries for which he shills are greedy crybabies. Nothing more.
Look, this article is just another BS anti-net neutrality argument showing how the poor internet carriers can't afford to support rich Netflix's content. Powerful Netlix is strong arming the little Internet providers (like, ahem, Time Warner) into carrying all of that expensive streaming video and cutting off ISPs who won't play ball.
But the whole article is BS, and this is why: There is no buy in. No one is getting cut off.
According to TFA, Netflix is not forcing any ISP to carry this traffic and they are not charging any ISPs for the privilege. Netflix is providing local caching servers to minimize traffic across the national backbones. This will save Netflix money and save the ISPs money because local traffic is cheaper than backbone traffic. If Netflix really wanted to stick it to the ISPs, they could just turn on Super HD for all subscribers and really rack up the bills. Netflix is being downright polite with this. At best, Super HD will be a minor competitive advantage for a handful of ISPs who have the servers.
Best post in the thread so far hands down.
The simple fact is that if the ISP's would re-invest into their infrastructure they would be doing everyone a great service (themselves included), but instead they seem to be pissing away the profits and doing nothing really for their customers other than jacking up the prices for the same basic service. Of course there is absolutely zero incentive for them to do so in most markets since most have a utility style monopoly.
I got here through a series of tubes
Look, this article is just another BS anti-net neutrality argument showing how the poor internet carriers can't afford to support rich Netflix's content. Powerful Netlix is strong arming the little Internet providers (like, ahem, Time Warner) into carrying all of that expensive streaming video and cutting off ISPs who won't play ball.
It's worse than that. The language in that spiel is so loaded it's practically impossible even to figure out what the fuck the man is complaining about. I kept reading it, hoping that at some point the guy's argument would make even the slightest bit of sense, but every single descriptive element of the article (and I use that term loosely) was so charged with invective that he wasn't even able to make his own case.
The entire piece is just a poorly composed diatribe without any logical basis whatsoever. Honestly, if this is how the larger carriers choose to defend themselves, they deserve to lose.
Crumb's Corollary: Never bring a knife to a bun fight.
I lived on my street, in the next to last house built, with no option for cable at all. DSL sure, but there was no cable on my side, and no plans to build it.
I called, I chatted, I mail-bombed the board and executives with a copy/paste chat session which went so horribly wrong I would not have bought the company's services if it had been available the next day.
I saw a cable truck on my side of the street, 4 years after the last house was built. Nothing but satellite dishes on this side. I got DSL, which was re-branded AT&T two months in, and I was furious, but I trusted satellite less.
I got the $20/no naked DSL for 4 years, and finally upgraded to a faster speed. The cable co can go fuck themselves, which is exactly what they have been doing. They didn't call me to let me know it was available - they sent the same flier they have been sending for 4 years, when it has not been available.
I gave the co. my phone number, a very pleasant woman called me after my mail-bomb and apologized that they didn't have service here, and sorry that the representative took 30 minutes to not figure that out. So they have me as a lead. A simple call and some negotiation on price as someone who raised awareness of failures in their process, and I'd be a happy customer.
Still on DSL. Cable co can't be bothered with me, apparently. Or with informing customers that a cable has been laid and service is available.
Doing nothing for their non-customers, and would-be customers, despite having it pointed out to them.
Zero incentive indeed, even after having put in the cost. Sending someone out to knock on my door would have given them years of continuous service upgrades. Guess they don't care.