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AT&T Exec Calls Netflix "Arrogant" For Expecting Net Neutrality
jayp00001 (267507) writes "'As we all know, there is no free lunch, and there’s also no cost-free delivery of streaming movies. Someone has to pay that cost. Mr. Hastings' arrogant proposition is that everyone else should pay but Netflix. That may be a nice deal if he can get it. But it's not how the Internet, or telecommunication for that matter, has ever worked,' writes AT&T Senior Executive Vice President of Legislative Affairs, James Cicconi. Mr. Cicconi took issue with a blog post from Netflix CEO Reed Hastings on the importance of net neutrality.
Your customers pay you, as their provider, Netflix pays their provider, and it's between you and their provider to determine who, if anyone, pays who, based on the flow of traffic.
What, you mean that someone who pays his ISP for a connection to the Internet shouldn't have to pay extra if he actually wants to use that bandwidth? I'm pretty sure that'd be classified as communism, or terrorism, or whatever the 'ism of the month is.
ISPs will fight tooth and nail to keep from becoming the "dumb pipes" that true net neutrality would make them. Because then they wouldn't be able to siphon off the profits of companies that have actually innovated themselves a business in the Internet space, rather than just continuing to make a buck off of their infrastructure semi-monopolies.
Don't tell me to get a life. I had one once. It sucked.
Netflix streams from AWS, and offers ISPs a sort of staging platform where popular content can be cached within the ISP network, eliminating the peering issue. Many cable providers refuse to implement it.
I want to delete my account but Slashdot doesn't allow it.
What exactly does my cable bill give me then, if not access to services on the web?
It gives you access to services on the web, but they have to pay their connectivity bill, too. If the company they chose doesn't have a good connection to your company, though, then your experience with that company will suffer.
In Netflix's case, they chose Cogent, and Cogent wants to take advantage of peering arrangements that presume data will cross their links to other providers in both directions equally, but they want to send far more data than they receive. But they don't want to pay the transit fees that would normally incur.
That would be true of the major cost of providing internet service were the per-packet cost. But in fact the major cost is in installing and maintaining the lines. Next is the cost of running packets through them. That cost breaks down into network management, energy, and infrastructure. In point of fact, there is no real additional per-packet cost. What costs is having enough capacity to carry the packets. So when I buy a network connection that promises 20mbps of capacity, presumably the ISP has 20mbps of capacity for me. At which point you have to ask yourself, what does it matter whether I use the whole capacity or only part of it? Either way, I'm paying for my 20mbps, and I should get to use it.
Of course, the ISP doesn't actually reserve 20mbps for me, at least in the U.S. They figure that for every N customers that are paying for 20mbps, they will have to configure 20mbps of capacity. This is where your talk of socialism comes in: if I actually use my 20mbps that I paid for, and you don't, then in theory you are subsidizing my network use, because there's only 20mbps between N of us (where N could be 10, 20, or even worse).
But even that isn't correct, because it doesn't account for profit. How much of the $80/month I spend on my 20mbps connection is cost, and how much is profit? Suppose N=20. Suppose the profit margin is 90% (which it probably is). That means that 20mbps of actual capacity costs the ISP 0.1*80*N, which is $160. So the ISP is charging the customer $1600 for $160 of bandwidth. They could deliver as much as ten times the bandwidth before their profits went to zero. Chances are that the point at which I am getting Netflix, you are getting Netflix, and all our neighbors are getting Netflix is well below that cutoff, because we typically don't all watch at once.
But even that analysis is wrong, because in fact your ISP does already have 20mbps capacity to your home which is not shared, and is not amortized across other customers. The capacity that is amortized across other customers is core bandwidth: the bandwidth that happens at the peering point, and between that point and the ISP's network distribution center near where you live. That bandwidth is really cheap compared to the bandwidth they have already delivered to the edge of the network: to you.
So in fact it's quite likely that they can deliver full Netflix bandwidth to everyone and still make a profit. So where's your socialism in this picture? It isn't there, unless you mean corporate socialism: government-sponsored monopolies that deliver money-printing profits to those that own them, because we have no choice—we buy Internet from the local monopoly ISP, or we don't get Internet at all. And because we have no choice, Netflix has no choice. They can't go with the ISP that offers them cheaper transit, and use that to drive customers to that ISP, because in most markets there is no that ISP. There is one ISP, zero competition, and a lot of people overpaying for internet service.
FTFA
Interestingly, there is one special case where no-fee interconnection is embraced by the big ISPs -- when they are connecting among themselves. They argue this is because roughly the same amount of data comes and goes between their networks. But when we ask them if we too would qualify for no-fee interconnect if we changed our service to upload as much data as we download** -- thus filling their upstream networks and nearly doubling our total traffic -- there is an uncomfortable silence. That's because the ISP argument isn't sensible. Big ISPs aren't paying money to services like online backup that generate more upstream than downstream traffic. Data direction, in other words, has nothing to do with costs.
**in other words, moving to peer-to-peer content delivery
AT&T + friends just don't like provisioning more bandwidth for companies that don't directly make them money.
[Fuck Beta]
o0t!