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Level 3 Wants To Make Peering a Net Neutrality Issue
New submitter thule writes "A story at Gigaom talks about how Level 3 is trying to pull peering into the net neutrality issue. Regulating peering could hamper how the Internet is interconnected, potentially turning it into a bureaucratic mess. Should peering be regulated?"
Reader raque points out that Netflix CEO Reed Hastings is banging the net neutrality drum, too:
"Some major ISPs, like Cablevision, already practice strong net neutrality and for their broadband subscribers, the quality of Netflix and other streaming services is outstanding. But on other big ISPs, due to a lack of sufficient interconnectivity, Netflix performance has been constrained, subjecting consumers who pay a lot of money for high-speed Internet to high buffering rates, long wait times and poor video quality. ... Once Netflix agrees to pay the ISP interconnection fees, however, sufficient capacity is made available and high quality service for consumers is restored. If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future. Roughly the same arbitrary tax is demanded from the intermediaries such as Cogent and Level 3, who supply millions of websites with connectivity, leading to a poor consumer experience."
Lemme guess: blocking copypasta shit like this is NOT a feature in slashdot beta.
Who's going to pay for it? The people who pay for internet... maybe? What else should they be doing with $75/month that people pay for internet?
Since the beginning of peering, the rules have always been that if you have roughly the same amount of traffic inbound and outbound, peering has no charge. If one direction generates more traffic than the other, the source pays for the asymmetry. If you give me 200 GB per minute average, and I give you 100 KB per minute average, you have to pay me for the traffic you are giving to me to deliver to my customers.
Streaming video has this problem - it's all one way. Peering should cost video streaming sources. The RATE charged has to be reasonable, but they don't get free peering.
as the city makes the choice based on what cable, and phone provider gives them the right bid to lay the lines.
Franchise fees are not a "bid", they are a contractually negotiated fee for using city rights of way. Once a fee is negotiated, it would be hard for a city to say "your fee will be higher" to a second company, since they've set the price for access.
What prevents a second cable system from overbuilding the first is not the franchise fee, it is the lower return on investment from having to compete with the existing system. No business would want to invest heavily in physical plant when there would be little profit in doing so. Their fixed costs would not be recouped by the sales, much less the incremental costs.
It's not like a grocery store where the fixed costs are relatively low to find and outfit a building and have the customer come to you. Cable requires the "grocery store" to go to the customer where he is, and simply lowering prices until the customers stop going to the competitor and start coming to you won't work. It is not economically viable to build the system as you get customers. The turn-on time would be long.
I understand you probably don't work with this type/scale of equipment/network on a regular basis, but the fact is $10k *is* extremely cheap. It's also probably a bit of a bogus number, or at least incorporates a whole lot of stuff beyond the actual connection (not just the cost of the optics, but some of the cost of the blade/chassis, and cost of power and rack space over an X year period, etc). The optics themselves are pretty cheap now - probably no more than $800/side, and with the scale of the large operators it's a good bet they're paying $500/ea for 10g SFPs. Believe me, a network operator of this size sneezes 10g optics without thinking about it - their on-site guys probably play dominoes with the spares.
A little fun math: Let's say for the sake of easy math that the average customer pays $42/month for broadband, or $500/year. Let's say the average lifecycle of a 10g optical link and the associated routers is 3 years, and the single cross-connect costs $10k, spread across those 3 years, for a cost of approximately $3500/yr. So, ignoring the cost of the last-mile infrastructure (partly because the vast majority is in place and has probably been paid off for years), the cable company would have to add 7 customers to pay for each new cross-connect. Again using nice round decimal numbers for the sake of easy math, at a cap of 50mbps per subscriber, you could have 200 customers fully saturating their links before you would saturate the 10gbps cross-connect, assuming ALL customer traffic was being routed that way. So if your first 7 customers paid for the cross-connect, and we're talking about 3-year equipment lifecycles, that leaves just shy of $290k for the ISP to spend on their other infrastructure and overhead.
Summary: I think they'll be just fine, and not need to raise your fees (they probably will raise them anyway, but that's an entirely different discussion).
Yeah, you are paying for it, and they should deliver it to you.
But both ends pay. Netflix, or whomever, pays their ISP, you pay your ISP. Netflix doesn't get a free ride.
When people talk about net neutrality, they worry that Neflix has to pay twice, once to their ISP, and once to your ISP. We don't want that.
But Level(3), one of Netflix's ISPs, may have to pay Comcast if Level(3) sends more traffic to Comcast than Comcast sends to Level(3).
Then again, Comcast better handle that traffic equally well, and better have the capacity to exchange the traffic fairly.
WTF are you talking about? Level 3 is complaining because they are now being extorted by ISPs who are trying to double-dip and charge them hefty fees for peering agreements. This was not a problem when net neutrality regulations were in place, but after Verizon won their case over net neutrality, it took Comcast only five weeks to go on a rampage and start extorting fees from other providers. So this is exactly what you get when you DON'T have net neutrality and you DON'T have regulation.
It's not great for companies like Level 3 because they are the ones being extorted. The current lack of regulation is great for companies like Comcast who are threatening to throttle connections of their own users if content providers don't pay Comcast an extortion fee. Again, it only took five weeks of the regulations being removed before Comcast started pulling this shit. It may be time for you to admit that moderate and sensible regulation is not a bad thing.
I'll freely agree that too much regulation is a problem. But too little is also a problem in a non-free market, and telecom in general is almost as non-free as it gets (bettered only by electric, water, sewer, etc.) Since there's not enough competition to force a given broadband provider to not gouge their customers and partners, we (as a society) either have to use regulation or settle for getting gouged.
I say as a society because an individual does have the option (however unpalatable it is) to simply do without internet; "take it or leave it". But that's becoming less and less of a viable solution as more and more of our day to day interactions with each other, with companies, and with government move to the internet. If improvement only happens after substantial numbers quit and quitting is infeasible, then nothing will ever improve.
Of course, I believe it is possible to have an amount of regulation which is neither too much nor too little, though it's harder to maintain that balance as the bureaucratic empires grow and harden. If you don't feel that such a sweet spot is possible, then I can see how less regulation would be preferable to more. But in that case we need to drop this districted monopoly system too, so we can actually hope for some competitors.