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.

Comments

It's not arrogant, it's correct.

[BronsCon]

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.

Re:It's not arrogant, it's correct.

[Qwerpafw]

Put another way:

* Netflix pays for their bandwidth
* Customers pay for their bandwidth

And yet, AT&T wants more money because they think they have the right to charge Netflix more to pass through their tollbooth.

People aren't paying for "Internet except for Netflix" and Netflix isn't paying their bandwidth costs for "Internet except for consumers."

AT&T, and other providers, should have no right to put up walls. If there are issues of peering, those should be working out at the peering level, and not at the application/service or individual business level.

The news about Apple being willing to pay for AppleTV to have a "special line" to consumers is particularly worrisome and strikes the core of the problems with anti-net neutrality positions: they create unfair markets with barriers to competition. Netflix may complain, but they can (and do! with Comcast) pay if they have to. Apple can afford to pay the gatekeepers as well.

But some new startup (Aereo, for example) or small business? They can't and won't be able to pay those gatekeeper tolls to reach consumers. And they'll be prevented from competing or disrupting.

Big business will thrive in an anti-net neutrality world. Honestly, it might even help Netflix in the long run as barriers to any competing service will be high. But it's anticompetitive and small businesses and startups alike will be prevented from innovating, and maybe even be driven out of the market by an inability to pay these tolls.

Re:It's not arrogant, it's correct.

[Lloyd_Bryant]

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.

Re:It's not arrogant, it's correct.

[udachny]

And yet, AT&T wants more money because they think they have the right to charge Netflix more to pass through their tollbooth.

- it's not their 'tollbooth', it's their road. On a road you can charge different rates for different types of vehicles, this is the same situation. An eighteen wheeler can cause more damage to the road that requires more maintenance than a motorcycle, this is the same thing: a movie that needs to be streamed a million times takes up much more capacity and energy and basically uses the system much more than millions of small individual requests do.

See, I even used an appropriate car analogy.

Re: It's not arrogant, it's correct.

[Anonymous Coward]

time to take away their roads.

Re:It's not arrogant, it's correct.

[Shadow99_1]

Not just that, but from what I've seen in other news bits... The consumer side ISPs want to charge their customers, Netflix, and Netflix ISP... So they are being paid triple for the same bandwidth. How exactly that is supposed to be 'normal' is left up to the craziness of those saying such things.

Re:It's not arrogant, it's correct.

[ZombieBraintrust]

No it is like phone calls. The person who initiates the call pays. They pay because they are the one who is creating congestion. Netflix is not generating any traffic. AT&T customers generate the traffic when they open thier browsers and start downloading movies. It is not Netflix desision that AT&T charges all its customers the same thing. Netflix should not be punished because AT&T promises high speed connections with unlimited access. That is AT&T's fault.

Re:It's not arrogant, it's correct.

[Anonymous Coward]

a movie that needs to be streamed a million times takes up much more capacity and energy

No it doesn't. 10 GB of traffic uses up exactly the same capacity each time it's streamed regardless of whether it's a movie or cat pictures.

If you charge more for heavy trucks you have to charge all trucks.
You can't just charge wall-mart trucks double because you don't like them.

Re:It's not arrogant, it's correct.

[bluefoxlucid]

Their large problems are as thus:

Firstly, they can only charge those who peer to them. NetFlix using a Tier 3 provider would resell AT&T, who would charge the Tier 3 provider for bandwidth, which would essentially charge NetFlix for bandwidth. If NetFlix picks another Tier 1 or Tier 3 who resells a different Tier 1, AT&T can no longer charge NetFlix; they're stuck with their peering deals between Tier 1 providers.

Secondly, not being allowed to charge NetFlix for bandwidth passing through another Tier 1 peering arrangement means they need to compete on a market with all players--they can't make a move against NetFlix due to their negotiating position (inexperience, high amounts of capital and less inclination to squeeze out a favorable deal, business criticality, etc.), rather they must deal directly with all of their Level 1 peers and all of their Level 3 resellers and direct clients. If they make up a cost schedule that NetFlix will submit to but Google will not, then Google will argue down the cost schedule and they will bill NetFlix less; if they refuse to budge, Google will move to another Tier 1; and if they try to shift the costs onto a stratified consumption model and increase the cost at the lower usage levels, their lower usage clients will move to a Tier 1 without big players who charges less.

In the end, they don't want a level playing field. The providers want a playing field where they can extract maximum profits from the weak, particularly the rich and weak.

Re:It's not arrogant, it's correct.

[bluefoxlucid]

But they're only shipping packets. It's more like NetFlix is driving eighteen million motorcycles and doesn't want to be charged five times as much per motorcycle; in fact, they should pay less due to bulk rate discount.

Re:It's not arrogant, it's correct.

[Anonymous Coward]

Okay, so should the road owner (AT&T/Comcast) be charging the owner of the eighteen-wheelers that come onto their roads (Level 3, etc.), or the company whose freight is contained within those trucks (Netflix)?

Netflix pay Level 3 to deliver the freight. Level 3 pay AT&T to use their roads. Netflix only use AT&T's roads through Level 3's service, so why should Netflix have to pay AT&T directly?

Re:It's not arrogant, it's correct.

[oh_my_080980980]

Dude you're a freaking moron. As has been stated Netflix pays for their bandwidth and Customers pay for their bandwidth. AT&T wants to double dip. And if you think that's o.k. is AT&T going to refund the billions of tax payer dollars given to the telecommunications industries to roll out their fiber cables??? Hmmm....douche.

Re:It's not arrogant, it's correct.

[Burdell]

Netflix pays for their bandwidth

Well, but they don't always, at least not as much as anybody else. Several times in recent years, Netflix has switched bandwidth providers to "wanna-be tier 1" networks; that is, networks that are not as well-connected as they'd like to be because they don't really meet anybody's requirements for settlement-free peering. These providers see Netflix as leverage against their bigger competitors and appear to have sold Netflix bandwidth at well market prices in order to strong-arm competitors to provide new network interconnects.

Large networks don't just peer with anybody. There are costs involved in each additional turn-up, both for hardware ports and for the management side. They also don't just peer at a single or few locations (since that can allow outsider actors to cause drastic changes in internal network bandwidth utilization); they require other large networks to peer in a bunch of different places. Some of the smaller networks can't afford to do that, and want to dump large traffic hogs like Netflix at already congested peering points, and then complain that the big guys didn't bend over backwards to help them.

I've worked for small to very-small ISPs for over 18 years, and I definately don't hold Netflix blameless in this. They do things they know will impact their customers and then blame the other networks for all problems (and they aren't the only one, just one of the biggest in recent years).

Re:It's not arrogant, it's correct.

[alen]

because direct peering with ISP's means netflix can go around level 3 and cogent and save money

it's not like they are paying AT&T and comcast and also paying their Tier 1 providers. netflix is now connecting straight from their data centers to the ISP's on dedicated fiber links and bypassing the Tier 1 networks all together

some idiots can't seem to understand this

Re:It's not arrogant, it's correct.

[OneAhead]

I'm not sure this is what you and GP are alluding to, but the elephant in the room here is the "metered internet" option. You know, like you get a higher electric bill if you use more electricity, a higher water bill if you use more water, like you used to get a higher phone bill if you would make more phone calls, and like the ISPs have higher costs if their customers consume more bandwidth. Ironically, a lot of US customers are vehemently against metered Internet, even though the current system amounts to some form of "socialism", and metered internet would be fairer and would arguably allow for more competition between providers, making internet cheaper for everyone except the few % bandwidth hogs. Incidentally, metered internet would also defeat all those whiny dissonant anti-net-neutrality arguments the ISPs are making.

Re:It's not arrogant, it's correct.

[Monoman]

AT&T can't meet their customer's demand so they are charging the other end (Netflix) for being too popular. Yeah that sounds about right.

Re:It's not arrogant, it's correct.

[The Grim Reefer]

And yet, AT&T wants more money because they think they have the right to charge Netflix more to pass through their tollbooth.

- it's not their 'tollbooth', it's their road. On a road you can charge different rates for different types of vehicles, this is the same situation. An eighteen wheeler can cause more damage to the road that requires more maintenance than a motorcycle, this is the same thing: a movie that needs to be streamed a million times takes up much more capacity and energy and basically uses the system much more than millions of small individual requests do.

See, I even used an appropriate car analogy.

Except we paid for the road. They got the money to build the "information super highway" Instead we got a standard 4 lane highway that was designed for traffic from a decade ago. And it didn't even go to all the places it was supposed to.

Re:It's not arrogant, it's correct.

[bferrell]

This same sort of thinking is what brought about the interstate commerce commission rules for railroads.

They though that if you made more the carrier should too.

The government slapped the carriers once before (railroads). It's time to slap the telecom carriers too

Re:It's not arrogant, it's correct.

[phayes]

AT&T keeps saying that Netflix, which is the company that most of their clients are paying more to get faster Internet access to, has to pay more because Netflix sends more data than they receive.

It's funny but I've never seen a single AT&T statement that they should be paying money to blackblaze, crashplan, & the other cloud backup providers. It's strangely hypocritical because AT&T is clearly sending a lopsided amount of traffic to the cloud backup providers.

Re:It's not arrogant, it's correct.

[mellon]

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.

Re:It's not arrogant, it's correct.

[nine-times]

Or more to the point: You can't just charge Walmart trucks because you own Target, and you want to use your ownership of the road as leverage against your competitors.

That's the real issue.

Re:It's not arrogant, it's correct.

[kasperd]

metered internet would be fairer

The problem is that you do not have complete control over what amount of traffic flows over your line. Paying according to the amount of traffic which other parties could be driving up, is not an acceptable situation to most customers.

Re:It's not arrogant, it's correct.

[hinchles]

I wonder how AT&T would feel if Netflix, or Amazon or hell even google/youtube decided that AT&T should pay them for consuming their provided content....

Re:It's not arrogant, it's correct.

[Trepidity]

On U.S. mobiles phones, interestingly, both sides pay.

On European mobile phones, on the other hand, only the caller pays, but they pay a non-neutral rate, which varies depending on the type of device the recipient has: calling mobile phones is more expensive (in some countries, much more expensive) than calling landlines.

Re:It's not arrogant, it's correct.

[Fieryphoenix]

Doubtful AT&T can't meet their customer's demands. Congestion is not an issue.

Re:It's not arrogant, it's correct.

[schnell]

NetFlix using a Tier 3 provider would resell AT&T, who would charge the Tier 3 provider for bandwidth, which would essentially charge NetFlix for bandwidth

Kinda sorta. Here's the problem which makes the situation a little more nuanced than it appears at first. Think of this more like one of those occasional disputes you see where "DirecTV stops carrying ESPN because ESPN jacked up their rates" or something like that. One side wants to pay less, the other side wants to charge more, and it's tough to easily pick out who the good guys and bad guys are in that kind of situation.

Netflix buys most of their bandwidth from Cogent. Cogent has historically been the Wal-Mart of bandwidth - they sell dirt cheap but scrimp on quality to do it. The Tier 1 ISPs have said to Cogent, in effect, "you are not our peer. You will buy bandwidth from us rather than getting it for free," and Cogent doesn't want to pay. That constrains the bandwidth between Cogent and the Tier 1s (which Cogent is definitely not).

Netflix has only gotten involved because, as Cogent's #1 customer, they are feeling the pinch of Cogent's bandwidth crunch. Remember, Cogent is no stranger to peering disputes. The Tier 1s have said to Netflix, in essence, "we aren't upgrading our bandwidth to Cogent for free, and if you want your customers to have better performance you can connect to us directly instead of going through Cogent. Oh, and by the way, you're a content provider (albeit a huge one) and not our ISP peer so don't expect to get it for free, either."

It may sound like a Net Neutrality issue, but settlement-free peering vs. purchased transit has been a contentious issue since the mid-'90s if not before, and it has always been sorted out among the ISPs rather than being regulated by the government. Peering and its market dynamics have always been one of the most sensitive topics among ISPs, but it has almost always been dealt with inside the industry without exposing its gory details to the public - just like how you rarely hear about those "cableco vs. content network" disputes even though those negotiations are always going on... you only hear about it when the crap really hits the fan.

It's a perpetual issue that pits the Tier 1s vs. the Tier 2/3s, and always will be: the smaller ISPs want free peering of course, and the bigger ones don't want to give it away. The Tier 1s argue that they have to pay for a much larger network infrastructure than the Tier 2/3s so they are in effect subsidizing the networks of the smaller ISPs if they peer for free; the Tier 2/3s argue that they shouldn't have to pay to connect to other networks when the end result is (theoretically) better service for everyone.

It is a dangerous and very slippery slope to cast peering as a "Net Neutrality" issue because it invites the government to stick its nose into a topic that the world's ISPs have quietly managed among themselves for many years. "Settlement-free peering for all" sounds good at first blush but creates a dangerous precedent potentially for content providers to be considered as networks. What if CNN.com decides it doesn't want to pay for bandwidth anymore and wants all the ISPs to peer with it as a network for free? What happens when bobshardwarestoreintuscaloosa.com makes the same request? Where do you draw the line? Why should any business pay for transit bandwidth when it is providing content that users want to see? You could theoretically see the whole cost of the Internet flip onto the consumer ISPs if you follow the model to its furthest conclusion.

Another side note - it's not entirely true that "subscribers pay for their Internet, and content providers pay for their hosting." Larger ISPs factor in the revenue of paid transit to their business model - and they *always* have, since the earliest days of the commercial Internet - so that is in effect

Re: It's not arrogant, it's correct.

[amiga3D]

They can't find a way to double fuck you over cat pictures but when you want a movie they have another source of revenue they can hit. If they charge you for bandwidth and then charge Netflix for the same bandwidth you already paid for it's win-win for them. Free money for AT&T! At the expense of their customers who they could give a flying fuck about. You exist to line James Cicconi's pockets with money and have no other reason for existence. I remember back in the 70's how AT&T fucked over their customers until finally they got torn down by an Anti-Trust suit. 40 years later it's time for a repeat.

Re:It's not arrogant, it's correct.

[DamnOregonian]

Netflix has vast peering arrangements. My company peers with them for our residential customers. It's the only way you can get "SuperHD" content.
I suspect what's going on here, is that ATT's customers are pressuring them for SuperHD (peering-only) content, and NetFlix is saying to ATT: "Sure, just peer with us, and they can have it!"
I suspect that ATT is pissed that they would be forced to peer freely with a mere content provider (as well as perhaps lost revenue for any other lopsided peering arrangements the traffic may transit to get to ATT), and are telling Netflix that if they want to enable the chunk of their customers on ATT to have the higher-bandwidth content, the Netflix can pay ATT for the peering link.

Re:It's not arrogant, it's correct.

[GameMaster]

AT&T can't meet their customer's demands while making the dramatically increased profits that they desire. There, fixed that for him.

Re:It's not arrogant, it's correct.

[BronsCon]

That's all fine and dandy; then AT&T customers who want access to that content can move to another provider. My ISP was literally the first on board for SuperHD peering; Netflix provides the equipment, the uplink (bandwidth), and the content, at no cost to their peer, why should they be paying to provide this?

But, that's not actually the issue here. AT&T wants Netflix to pay them for their data that hits the AT&T network via their peering agreement with Cogent. Figure that one out... Netflix pays Cogent, AT&T users pat AT&T, AT&T peers with Cogent; if there's an imbalance in that peering agreement, that's between AT&T and Cogent, not AT&T and Cogent's customer.

Re:It's not arrogant, it's correct.

[postbigbang]

This isn't telephony. It's a data communications issue, upon which rides both time-sensitive data (audio, video) and non-time sensitive data. AT&T's arrogance is that of Southwestern Bell's (remember, this is not the AT&T of old) vision for profits.

It's a monopolistic view. It's the old "we own the highway" versus "we gave you rights of way because you were a municipal and regional utility". I say we reclaim the rights of way, and meter AT&T for their belligerence. That'll fix it for everyone.

Re:It's not arrogant, it's correct.

[DamnOregonian]

I'm the senior network engineer at an ISP. Your assertion of no-cost is utterly incorrect.
Here in the Seattle area, cross-connects typically happen at the Westin building. I assure you it's plenty expensive for cross-connects before you even factor in equipment (multiple 10Gbit optics and line-card ports).

The issue is actually that ATT wants Netflix to go chew cud in response to Netflix saying "You should peer with us for free."
http://www.reuters.com/article...

"“Netflix believes strong net neutrality is critical, but in the near term we will in cases pay the toll to the powerful ISPs to protect our consumer experience. When we do so, we don’t pay for priority access against competitors, just for interconnection,” he wrote, in relation to the ongoing debate over the future of net neutrality and paid agreements between Netflix and Comcast."

You're being caught up as sheep in a war between capitalist organizations. This isn't even an issue of net neutrality.
ATT isn't asking Netflix to pay for traffic transited into their network.

"In his original post, Hastings said internet service providers should give content companies adequate network connections for free, and singled out Comcast for supporting "weak" internet traffic rules."

Regardless of your *opinion* on costs, forcing an ISP to interconnect with someone else is *not* net neutrality. Net neutrality is simply the buzz-word being used by the combatants to rally their supporters.

Re:It's not arrogant, it's correct.

[sjames]

Not overselling 100:1 is what fixes that problem. Failing that, fair queueing can make it work.

Re:It's not arrogant, it's correct.

[BronsCon]

I never said there was no cost, I said there was no cost to the peer, the party who is not Netflix, that Netflix foots the bill for it, or, to put it another way, that Netflix pays and AT&T (or whichever peer) does not. My ISP peers with Netflix in this manner; I've had many a conversation with the CEO of my ISP, who, of course, was directly involved in setting up this peering. In fact, my ISP was literally the first ISP to jump on board for this. According to my, in my opinion very reliable, source, Netflix pays for the rack space, the power, the backhaul, and the interconnect between their equipment and ISP equipment, including paying for rack space and power for ISP equipment and, in cases where the ISP does not have appropriate equipment in place already, is willing to pay for part of that, as well. In the case of my ISP, they've been growing rapidly for the past few years, so they actually had equipment in place already, but if they did not, Netflix would have covered it.

Seems pretty reasonable to me. Also seems like that article is putting a spin on what Hastings said.

Re:It's not arrogant, it's correct.

[DamnOregonian]

I see our disconnect.
Again, I am a senior network engineer at an ISP who does have Open Connect connectivity.
They do not pay for a rack, they do not pay for a backhaul. They do not pay for anything in fact. All connectivity is our responsibility.
There are 3 tiers of Open Connect, simple free peering, peering + caching hardware, and just caching-hardware filled via transit.

We connect via BGP to the caching hardware, and we connect via BGP to Netflix over the peering link.
I wouldn't call anything in the arrangement high-cost (in fact, it's a benefit to us, we save transit bandwidth, and we're small enough for that to matter)

I'm not going to call you a liar regarding what you say about CEOs, but in my position, I've sat at conference tables with every large ISP operating in the Seattle area. I also setup our Open Connect system with my bare hands, every single aspect of it (Yes, that is all the ISPs responsibility).

I'm not making this up. I also don't consider it a bad deal. But I refuse to call the refusal to play an aspect of Net Neutrality.
The article isn't spinning Hastings words- those *are* his words. He believes every ISP out there should peer with him for free. From a logical perspective, I'd say he's pretty much right, and the deal is more than resonable. I simply refuse to acknowledge he has the right to force me into the arrangement.

Re:It's not arrogant, it's correct.

[BronsCon]

Very interesting. I might just have to call him on that next time I talk to him, then. It's also possible that this was the case for this ISP, given that they were the first on board; it may have been stipulated that Netflix would foot the bill in exchange for being allowed to use my ISP as a testbed for the platform. It may also no longer be the case, I haven't spoken with him in nearly 6 months at this point.

It does appear, now, that they only provide the equipment.

That said, what Netflix is actually offering is a way to offer your customers a feature which they do not charge more for, which may not be available through competing ISPs (e.g. I pay Netflix $7.99/mo whether or not I have access to this feature; and if I was with AT&T or Comcast, my other two ISP options where I live, I would not have that feature, SuperHD), as well as a way to greatly reduce the amount of data you have to serve to your customers from external sources, by providing free hardware and access to their CDN, from which you can serve Netflix data to your customers. So, then, even if they don't pay for backhaul, rack space, or power, I'm not sure why any ISP serving any significant number of Netflix subscribers would *not* want to participate; surely, the upkeep on the Netflix equipment costs less than the equipment and transfer required to serve the same data from an external source?

Clearly, I don't know all of the details, so if I've left anything out or gotten anything wrong here, please correct me. I don't see where they're forcing anyone to do anything, here; it's not cost-effective for them to serve SuperHD content over Cogent, so they cam up with another way to do that, for ISPs who wish to make the feature available for their customers.

The net neutrality issues effectively have nothing to to with Open connect or SuperHD, though; AT&T is bitching about the amount of traffic coming over Cogent's links and trying to get Netflix to foot the bill for some of it, since most of it is theirs anyway and Cogent isn't playing ball. That is, plain and simple, not to right way to go about it. Cogent, not Netflix, is AT&T's customer, and Cogent is who should be paying AT if that's not happening, that's between Cogent and AT&T, not AT&T and Netflix. If Cogent needs more money from Netflix in order to pay the higher rates AT&T is seeking, then that is between Cogent and Netflix, not Netflix and AT&T.

There are two separate issues at play here, and it is important to keep them separate.

Re:It's not arrogant, it's correct.

[Enigma2175]

This isn't telephony. It's a data communications issue, upon which rides both time-sensitive data (audio, video) and non-time sensitive data. AT&T's arrogance is that of Southwestern Bell's (remember, this is not the AT&T of old) vision for profits.

It's a monopolistic view. It's the old "we own the highway" versus "we gave you rights of way because you were a municipal and regional utility". I say we reclaim the rights of way, and meter AT&T for their belligerence. That'll fix it for everyone.

Who is "we"? The people? The people have no power, how are they going to reclaim these rights of way? The government? The government won't do anything because of the way campaigns are financed and the corrupting influence of power. The government gave the telcos BILLIONS of the people's dollars to build out high-speed networks - which they have obviously failed to do.

The problem is that nobody (outside of the narrow /. demographic) gives a shit about this. Heck, we can't even make them care about the NSA listening to their fucking phone calls, do you really think you can make enough people care about this issue to exert political pressure?

Re:It's not arrogant, it's correct.

[postbigbang]

It's my belief that there are many, many more than just the slashdotters that are of the belief that the communications shenanigans are tough. If you don't speak up, you give tacit silent approval. So, speak up. Educate the populace regarding the history of utilities, monopolies, and how this affects them. Then do it again. That's why I posted. That's why you posted. Don't give up.

Re:It's not arrogant, it's correct.

[BitZtream]

You'd be wise to just ignore Mr 'I'm a senior network engineer' because I'm a former network admin for an east coast telco and he's pretty much described it exactly as greedy assholes want it described rather than reality. He's twisting reality and words. He probably works for AT&T or Comcast by the sound of it.

Re:It's not arrogant, it's correct.

[jxander]

The solution seems simple. Separate the bandwidth providers and content providers. Neither CNN nor Bob in Tuscaloosa provide any connectivity, so they wouldn't be a part of network peering agreements and would have to pay some ISP for that connectivity. If they wanted to get into the ISP business and start providing connectivity, it would have to be an entirely separate entity from their current offerings.

Of course, this would mean splitting up a lot of the current ISPs that are having their cake and eating it too (selling you bandwidth, and then selling you content along that bandwidth) but it's the best option in the long run.

Or even simpler, just kill the geographical monopolies. Where I live, there is exactly 1 (one) option for High Speed Internet. They've been adding fees and charges by the boatload for the last several years, while happily pointing out their monopoly when I call. Most recently they added a modem rental to my bill, for absolutely no reason. I have only ever used my own modem. Even better, the addition of a modem rental negated the automatic payment that I'd setup, so I stumbled into a bevvy of late fees which were never refunded, despite the ISPs admission that the original rental fee was in error. I also incurred a fee for speaking with a person, and another for not using their automated phone system to pay the bill (which only accepts check routing numbers as payment method, no credit cards, debit cards, etc.) There was a fee to reestablish the automated payments, and to "reactivate" the account, even though service hadn't been interrupted... The best part though, I was charged a "restocking fee" on the modem.

So you'll forgive me if I don't see the need for a deeper view quite yet. The ISPs are enjoying their status as de facto monopolies, and are more than willing to piss off (or piss on) their customers to squeeze out a few bucks. I can only imagine the lengths to which they'd go, if they thought they could shake down Reed Hastings near 1,000,000,000 net worth.

Re:It's not arrogant, it's correct.

[NeutronCowboy]

The problem is that ATT uses its position as both a Tier 1 provider and as a consumer ISP to play both sides of the argument: on the one hand, they're arguing that Netflix sends too much traffic their way to get peering agreements hashed out, and on the other hand, they artificially constrain their upstream data by restricting how much and what customers can upload.

Because of this, there is no way for anyone to peer properly with ATT: they can always create traffic conditions that will suit whatever argument they want.

Re:It's not arrogant, it's correct.

[JMJimmy]

And game traffic which is even more time sensitive is somehow different?

The fact is that Netflix drives demand for AT&T's services - especially the higher capacity ones. They're bitching about having to invest in more capacity even though they're able to oversell what capacity they do build. Someone has to pay for this investment, that is true, and it's the customers who are paying $65/mo for 45Mbps connections and the $10/50GB beyond the cap. Interesting fact though, according to AT&T themselves:

"In fact, less than 2% of AT&T High Speed Internet users utilize more than 150GB per month." - AT&T Broadband FAQ

So, if the vast majority of users are using less than 150GB/month that means, on average, it's less than 5GB/day of traffic - by their own advertising that means that they are serving 98% of their customers at full capacity for 16 to 232 minutes a day (16mins@45Mbps, 232mins@3Mbps).

Re:It's not arrogant, it's correct.

[jxander]

The very existence of Netflix has revealed the truth of the Emperor's new Clothes : ISPs have been promising bandwidth MASSIVELY above their actual capacity. Now that ISPs are feeling the pinch of customers demanding what was promised to them, they're lashing out at the perceived cause of this pain

It would be as though a city metro system sold million and millions of tickets MORE than what they could actually handle, but it was never a big deal because no one really used the metro all that often. But when a reason to use the metro comes up, the whole system is clogged, not functioning properly and basically ceases to function at all. Would you expect the Metro to take the blame? "Yep, our fault, we'll fix it" ... or blame whatever sparked sudden interest. Even if that impetus, whatever it was, only existed to aggravate the metro's over-sold lines, the metro is still ultimately at fault for overselling.

ISPs have been massively overselling their lines for years. Making billions of dollars on the promise of speed and throughput that they KNEW was nonexistent and completely untenable if anyone actually tried to use it. And now people are using it. So who do you blame: Netflix for being popular? Or the ISPs for selling you empty promises and lies, with full knowledge.

Re:It's not arrogant, it's correct.

[ClickOnThis]

It seems the postal analogy is better than the car analogy.

At one time (19th century?) when you mailed an international letter, you might have to affix postage for all the countries the letter went through. Not any more.

In effect, AT&T is trying to make Netflix pay for "stamps" to send "letters" into their system, even though most other "letter-senders" don't have to. (Of course, AT&T already charges its customers to receive the "letters" so whatup.)

But really I think AT&T is trying to set up its own cyber-fiefdom, and charge "import duties" to competing content-providers like Netflix.

Re:It's not arrogant, it's correct.

[tlambert]

You pay for access to the network of your provider and this has nothing to do with the provider - supplier communications.

Can I have another provider, then, please?

What do you mean "There's an infrastructure monopoly due to rights of way, and they won't let Google hang fiber optic cables on their telephone ples" ?

Re:It's not arrogant, it's correct.

[whois]

The dynamics have changed somewhat. Mainly because ISPs became monopolies when dialup died. Remember Earthlink or Mindspring, Speakeasy? Or Netzero? Big old ISPs that nobody uses now because they were merged into global conglomerates or went out of business.

In the old days Netflix could say "hmm, we're an outbound only company with lots of cash and nobody will peer with us.. why don't we buy an eyeball company and balance our traffic so peering is fair"

Now there is nobody to buy, unless you want to buy some giant companies.. or get bought by one of them.

Also, ratio based peering was a model that made sense in the old days because it was the easiest way to determine fairness amongst multiple providers. Even in/out means you aren't stealing my eyeball customers and I'm not stealing your server customers right? Or at least we're stealing both in equal amounts?

Now that argument doesn't hold true when you're talking about Amazon or Google or Netflix, or Rackspace or anyone else doing cloud business. They aren't eyeballs and don't want your eyeball customers. Most of the time if you talk to them directly they'll peer based on your inbound traffic from them. The same applies to CDNs like Akamai or Cloudflare. Again, they aren't getting in the residential market and aren't your competitor so why not peer to ease congestion?

Ok, so big monopoly telcos that do both content and customers don't understand this, their arguments are pretty feeble.. "it costs big $$ to peer!" Well, run a dark fiber down the street and peer out of joes basement peering for $10/xconnect .. "but optic costs!!".. are cheap if you're doing 10gig MM or SM with no fancy wavelengths. "Port costs?" Same.. buy cheaper gear.

The only question is if netflix and friends end up flinching and paying to connect to AT&T and Comcast, then nothing will change.

Re:It's not arrogant, it's correct.

[alexborges]

Your low ID attests to your wisdom, oh elder of the internet. It cannot be said any better (or in a shorter sentence for that matter).

Re:It's not arrogant, it's correct.

[Pinhedd]

>AT&T, and other providers, should have no right to put up walls. If there are issues of peering, those should be working out at the peering level, and not at the application/service or individual business level.

It is strictly a peering issue and it is being worked out at the peering level.

In order to keep their operating costs low, Netflix decided to go with the lowest cost bandwidth around, Cogent. Cogent is great for getting data between datacenters on the cheap, but not-so-great for getting huge volumes of data to end consumers. As a result of Netflix growth and the rollout of higher bandwidth video streams, Cogent began dumping tons of traffic onto other ISPs with which they have peering agreements. Peering agreements are mostly informal and involve exchanging X quantity of traffic for Y quantity of traffic where X and Y are reasonably close to each other. As long as the peering agreement is fair, there's typically no money involved, so the sender of the traffic keeps all the revenue. The amount of traffic originating from Cogent has smashed into the limit of the peering agreements that Cogent has with various consumer ISPs. The bulk of this traffic just happens to originate from Netflix.

The cost of expanding the interconnects to handle all the added cogent traffic would fall entirely on the consumer ISPs, but the revenue for doing so would end up entirely in Cogent's hands. The consumer ISPs perceive this as being rather one sided and unfair (a matter of debate and opinion), so they're dragging their feet and refusing to bolster the exchanges or expand the peering agreements with Cogent unless Cogent foots some of the bill.

This is not a net neutrality issue at all. Netflix is not being treated any differently than any other traffic source. The dispute is between Netflix's upstream ISP and consumer ISPs. Netflix only got involved directly because Netflix is Cogent's biggest consumer, and is indeed the largest source of internet traffic by volume in the world right now.

I'm certain that many consumer ISPs would love to create "Internet + Netflix" packages, but doing so would be a flagrant violation of network neutrality. Instead, they have to bite the bullet and treat it the same as all other traffic which means downloading all of the costs of delivering it onto all of their customers equally regardless of whether or not they actually use it. The workaround is to shift some of those costs onto the source of the traffic (Cogent) who in turn would shift those costs onto the source (Netflix).

Re:It's not arrogant, it's correct.

[hhw]

I call BS. We're at the Westin as well, and x-connects in the 19th floor meet-me room are free, while x-connects between floors are a one-time build cost. even if you don't have your own space and are leasing lines from a data centre, they're only $50-$200/mo. Powered equipment may not be permitted in the meet-me room, but there is nothing that would stop you from putting some passive DWDM muxes in there so you could even run 40-80x 10Gb-100Gb links over the same fiber. The only way I see x-connects being expensive is you're using Equinix, but that would be your own business decision, and not inherent costs to peering.

Also, 10Gb optics sourced directly from China where they're manufactured can be purchased for less than $100 for LR optics, or less than $1000 for DWDM optics, which is peanuts for a one-time cost. Sure, line cards and therefore physical interfaces are expensive, but that's why public peering exchanges like the SIX (Seattle Internet Exchange) exist so you can peer with many different networks over the same interface. If you are doing enough traffic over a link to justify private peering however, your equipment costs should be built-in to your business model, and whether it's peering or other traffic shouldn't matter.

Although I do agree with your assessment that this isn't a net neutrality issue, it most certainly is a case of large eyeball networks trying to double-dip on charging for bandwidth, and criticism of them is well deserved.

Re:It's not arrogant, it's correct.

[hhw]

Netflix does most of its heavy lifting through its own CDN boxes running FreeBSD + nginx, which it will place on ISPs' networks for free, although the ISP would be responsible for the space and power. They most certainly do have their own data centres though, with infrastructure that goes well beyond Amazon.

Re:It's not arrogant, it's correct.

[msauve]

BS. ATT wants to charge both ways. It's a matter of whether to charge for the data received (requested) or sent. That's already been decided, in both Internet and traditional telecom. To have a phone, one pays a small access fee. When you originate a call, that's when usage charges kick in. Similarly, it's ATT's Internet users who are originating requests for service from Netflix, and it behooves ATT to service their customers, not try to double-dip by asking Netflix to also pay for transport of that data.

No, Netflix is not using ATT as a transit network, they're just delivering the data ATT's customers have requested.

Not how it works?

[sqorbit]

"But it's not how the Internet, or telecommunication for that matter, has ever worked,' Hasn't that how the internet has been? If someone calls me to play a song they wrote over the phone should they pay a fee to provide me that entertainment over the phone?

WE pay

[btpier]

Doesn't my monthly ISP bill pay for that delivery already?

So what am I paying for?

[asmkm22]

What exactly does my cable bill give me then, if not access to services on the web?

Re:So what am I paying for?

[geek]

What exactly does my cable bill give me then, if not access to services on the web?

I'll give you a simple example of what the Telcos want this to be like:

My wife and I went to a new wine tasting place here in town. They touted the fact they have more wine tasting machines than anywhere else in the world. You walk up to it, insert your payment and choose the oz you want and the type and you get it in a little tasting cup. Sounds simple right? It should be except that you can't use your debit or credit card and the machines don't take cash. You have to purchase a card from them to use the machines. Just the card, you have to then put money on the card after you've purchased it.

AT&T want you to think of the connection they give you as that card. They then want to charge you per site or service beyond that. You pay for the priviledge of being their customer. It's the same racket gym's have been doing for decades with their "initiation" fees they claim they need to process your paperwork and somehow cost 100$+.

Want to be their customer? You have to pay for it. Then you get to pay for it some more.

Re:So what am I paying for?

[Ioldanach]

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.

I already pay you AT&T

[gurps_npc]

When I pay you to provide me internet service I am paying you to do a service.

I don't pay you to provide me only the cheap internet, I pay you to provide me the entire internet. I don't pay Netflix to do that, I pay YOU to do that.

So YOU are the one that has to build the internet to provide me the service that YOU pro missed to supply me. No, you can't blackmail other people I do business with to help out. I have already paid you, you can't charge them for services I already paid for.

I'm already paying AT&T to deliver Netflix

[kaplong!]

I'm already paying AT&T to deliver Netflix. Seems to me the carriers expect to be paid twice for the same service, once by the source (Netflix) and once by the destination (me).

Re:I'm already paying AT&T to deliver Netflix

[pr0fessor]

Netflix already pays for service at their data centers and you pay for service at home. AT&T want to charge Netflix for traffic that passes through their network to non-AT&T customers in addition to getting paid by Netflix's service provider for handling the same traffic.

Re:I'm already paying AT&T to deliver Netflix

[TubeSteak]

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.

Nonsense

[fredprado]

The user already pays for it, both to AT&T and Netflix.

Re:Nonsense

[GodfatherofSoul]

This is the *entire* point of the net neutrality debate. Businesses want to reserve the right to gobble up subsidizes to build out our internet infrastructure, but want reject the responsibilities of being a common carrier and turn around and double charge both the content consumers *AND* producers.

Well, *someone* here sound arrogant, anyway...

[pla]

there is no free lunch, and there’s also no cost-free delivery of streaming movies. Someone has to pay that cost.

So the $80 a month I pay my ISP goes to what exactly? Oh, riiight... All those rural infrastructure improvements you've fought tooth and nail against. Got it.

Guess what, Jimmy? Without the likes of Netflix, we have no use for your "internet" that goes nowhere. Perhaps you could go read up on this idea on your Compuserve account.

Re:Well, *someone* here sound arrogant, anyway...

[ObsessiveMathsFreak]

So the $80 a month I pay my ISP goes to what exactly?

Your free lunch.

The deep, deep irony --actual classical irony -- here is that Cicconi does believe in cost free delivery and free costs. We know that because that is exactly what they promise to their customers.

Netflix is not the cause of recent video traffic volumes on the web. The cause is "all you can eat" unlimited monthly usage rates which have become the industry standard. It was agreed in the 1980s that ISPs would operate on an "end user pays" model, but at some point in the 2000s, ISPs move towards an "All you can eat" model where the end user pays only for the connection, and not the volume of traffic they actually upload/download.

So when customers actually do start downloading all they can eat, where does the blame lie here? At Netflix, who have already paid cogent handsomely to upload every single byte of every single video they stream? With the customers, who paid up front for a connection which said "unlimited, all you can eat downloads", and then proceeded to do so? Or does the blame lie with the ISPs and telcos, who wrote millions of unlimited download cheques that their networks now cannot cash.

So Mr. Cicconi , If your customers are downloading too much data, charge them for the cost. If you can't do that without losing customers, then you can't compete, and its time to step aside for ISPs who can. Netflix does not enter into this equation. The internet is based on an end-user pays principle and if you AT&T want to have end users using without paying, that's your problem and nothing to do with Netflix, Youtube, the Pirate Bay, Facebook or anyone else. Don't extort others when you've bitten off more bytes than you can chew.

Classify 'em as Common Carriers under Title II

[QuietLagoon]

Cogent: Reclassify ISPs As Common Carriers Under Title II

In a bit of a clever public relations dance, Cogent has issued a press release stating that while the company refuses to pay companies like AT&T, Verizon and Comcast new peering tolls, they will pay the costs incurred by those companies to ensure there's adequate capacity at interconnection points. Cogent has been at the heart of more than a few debates over settlement-free peering, usually when the levels of traffic exchanged aren't equal. ...

Here we go...

[MrSome]

His comment shows exactly where these ISPs want to take the internet.

It's not about paying for an internet connection so you can get what you want... no no.

They want you to pay for an internet connection to get what they want to give you.

Fed Ex and Amazon

[gurps_npc]

Using the same logic, Fed Ex is slowing down my Amazon purchases over $25, because while Amazon pays for the shipping, I have refused to tip them.

Oh wait, no they are not, because Fed Ex is not run by greedy idiots trying to charge twice for one service.

AT&T will likely regret this.

[Last_Available_Usern]

AT&T has quite the sack to go on record with this statement. I can only assume they hope other ISP's will get on board and try to somehow make this an acceptable thought process. A few points...

1) Where the consumer goes on the internet is their own business.
2) If the consumer is using more bandwidth then your business model allows, adjust your rates to the consumer to match.
3) You can't build a toll road between a gambler and the city of Vegas and then charge both the gambler and Vegas for their travel.

Re:AT&T will likely regret this.

[Anonymous Coward]

No they won't. This government belongs to them not you. Best you remember that.

Double-dipping

[nctritech]

This is the problem with removing net neutrality: the service providers will be double-dipping. Each endpoint pays a service provider for a certain level of connection to THE ENTIRE INTERNET, and the only speed limitations should be the lowest level of upstream/downstream bandwidth paid for by one endpoint or another.

Without this "hands off" approach, service providers can say "pay us for a certain amount of speed accessing THE ENTIRE INTERNET" and then say to Netflix or others "pay us to be allowed to send to our customer at a certain level of speed, even though you've already paid another provider for the same thing." That means that the end customers ARE NOT receiving what they paid for unless the sender pays the tariff.

This should absolutely be fought tooth and nail, because in the end ALL costs fall upon the end consumer. I, for one, would be more than willing to set up something at my end that helps Netflix host its streams in a distributed fashion as is done with torrent downloads.

Re:Double-dipping

[Gothmolly]

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.

Re:Double-dipping

[rkohutek]

Interestingly, as a tier-2/regional operator, these cache devices are hard to get because they fill a certain role. We have worked with Netflix to try and get the caching device, and it just doesn't do any good if you have less than 3-4gbps of pure Netflix traffic. It does not work because the caches have to ... populate the cache! They do this regularly, and the do it overnight -- but it is an absurd amount of data, especially when there are multiple bitrates. I am told that the cache runs > 1.5gbps to populate, almost nightly. So if you don't push significantly more than that, it is not a cost winner.

As a transit provider/local ISP/bandwidth buyer, 3+gbps is a lot of traffic. We found it mildly more attractive to buy a 10gbps wave to a Netflix-available peering point and peer directly with them than to buy 2+gbps of transit from Level3/Cogent/HE, especially factoring in last mile costs.

Also of note, my own traffic engineering testing shows that Netflix *strongly* prefers Hurricane Electric (as of last fall), then Cogent, then Level3.

There is a really horrible hole between 1gbps and 10gbps of consumption that there isn't a good solution for. Netflix knows about it, but it is a very difficult target to hit -- it may be cheaper to buy transit, or it may not be, but hardware isn't the answer. This same situation exists for all CDNs - limelight, edgecast, akamai, L3.

As usual, peering is the answer. Our customers pay us to bring them Netflix ... so we buy a wave and backhaul it hundreds of miles to satisfy them. It'd be ridiculous for me to charge Netflix when my customers are asking for it!

Netflix should charge fees back to customers

[hawguy]

Netflix should charge back whatever fees they pay to Comcast back to their customers that view content via Comcast. This lets the customer see the true cost of their ISP.

Why should users of Google and other ISPs that don't charge fees to Netflix subsidize Comcast subscribers?

Landlines

[mepperpint]

I would like to introduce Mr. Cicconi to a device called a 'Telephone', particularly a variant colloquially termed a 'landline'. Historically 'telephone' companies, such as AT&T, would sell users a 'landline' to which they could connect a 'telephone'. These services included a basic connection charge as well as usage charges. In the event that a connection was made form one 'landline' to another, the party that initiated the session was charged for the usage of the session. This is exactly the treatment that Mr. Hastings is proposing.

In particular, I would like to note that while some providers charged users based upon usage, other providers allowed for a fixed cost plan where the subscriber paid a flat payment independent of their usage. These sorts of unlimited plans are exactly what AT&T, Comcast, etc. are selling as an ISP to their customers now, so they have no business trying to extract usage fees from Netflix and they have no business telling us that we're asking non-Netflix customers to subsidize the connections of Netflix customers. We've paid the fees that AT&T, Comcast, etc. demand for unlimited usage, so they need to provide it without whining about how they're not getting paid twice for the same service.

More Corporate Greedmeisters

[sdinfoserv]

As an American, I really get tired of billionaires arguing with millionaires about money.... All that happens is I get screwed.
- the US has fallen from 16th in 2012 to 31st in 2014 for broadband speed...
- pro sports tickets are almost unaffordable to the average person
- US healthcare is the most expensive per capita in the developed world and is ranked 33 for infant mortality

We need to get of this 'we;re great, capitalism solves everything' fox news mantra and look at what's actually happening.
Otherwise, at some point, there's going to be just 2 jobs left in the US. The guy who owns everything and they guy who cleans his toilet.

Re:More Corporate Greedmeisters

[geekoid]

Infant mortality is a horrid example. Every country considers infant mortality a little different.
In the US, anyone born with any signs of life, who then die counts toward that statistics. In some country's, premature babies that are born, but die within 7 days don't count. Russia being one of them.
When you normalize the data, are IMR is actually much lower.

IMR also doesn't take into account fetal deaths; which is a very important metric when using infant deaths as an indicator of country quality.

Re:More Corporate Greedmeisters

[geekoid]

He didn't say capitalism was bad, he said
"We need to get of this 'we;re great, capitalism solves everything' fox news mantra and look at what's actually happening."

And he is correct.

Re:More Corporate Greedmeisters

[NIK282000]

You mean like right now? You don't get rich by working hard. You get rich by being born rich, by fucking over other people, by being really lucky or by being REALLY fucking smart. Of all of those cases only one of them involves hard work and not many people are born smart enough to come up with a real money making idea.

Unethical

[hawkbat05]

Someone can correct me if I'm wrong here but the way I see it is Netflix already pays an ISP for its access to upload and download data and the end users already pay their ISP access to upload and download data. Both ends of the connection are already paid for, charging anything on top of this is basically charging for the same service twice. Netflix and the ISP's share the same customers, charging Netflix more means they'll pass the charges on to their customers this basically amounts to the ISP's increasing their prices/revenue by artificially restricting the supply.

For example if the ISP made a deal with Netflix that they can utilize X bandwidth at a rate of $Y/GB then Netflix is already paying for the data it sends. Putting another condition on that data and saying that you have to pay $Y+Z/GB if the data is providing something to customers is just a BS way of raising the price for businesses when it's not costing the ISP a dime more than any other data.

Re:Unethical

[guacamole]

AT&T doesn't want to charge Netflix extra for the same connectivity they get right now. What AT&T and other telecoms want to be able to do is to offer Netflix a higher priority (higher bandwidth and lower latency) service than what the rest of internet traffic gets for an additional fee. Netflix always refused this idea, and just hoped that telecoms upgrade their infrastructure which would benefit everyone at once.

I don't see a problem with telecoms charging Netflix extra for a higher priority service, but there is one big conflict of interest here. AT&T not only provides the pipes, they also provide the TV content with the U-Verse service. So AT&T is in direct competition with Netflix. Without net neutrality, AT&T is now in prime position to make sure that Netflix doesn't hurt their TV cable business. Either they charge Netflix so much that it stays uncompetitive, or perhaps Netflix stays competitive but AT&T will skim its profits through the fees anyways. Huge conflict of interest. FTC should look into this.

Start the supplanting already

[Average]

Google Fiber, meet Netflix. Netflix, Google Fiber. Amazon Web Services, you in? Apple?

It's time to start more overbuilding. Yes, it's expensive. Yes, Comcast or whoever already has the lines and could bump up to 300Mb plans for $50 at almost no additional cost (making them hard to compete against). But, until you build (and build at a much faster rate than the current Google Fiber projects), this is only going to get worse. You're currently dependent on not just a quasi-monopolist monster, but a wounded and irrational monster (because their TV profits are hurting). You have to bypass them.

It's ugly, I know. There will be communities with roadblocks (overbuilding is supposedly legal everywhere since the Telecom Act of 1996, but reality isn't so pretty). Sad, but true. We'll end up bypassing those communities, too. In every community that welcomes you, BUILD. Fiber is nice, but if you have to go DOCSIS/HFC (fiber to the block/neighborhood) with a better upstream split frequency because of cost, build that... coax is under-rated. But build. You can train high school students to lay coax. You can leverage massive discounts for buying 30 million identical ONUs. Build. Please. For the good of the country and the internet.

AT&T Wants everyone to pay

[wolfguru]

As consumers, we pay for internet access to get the content we are interested in, not the content the ISP can make the most money delivering. If AT&T wants the content providers which are what drives consumers to subscribe to pay for the bandwidth it takes to provide than content, then AT&T should not be charging the consumer for delivering the content at the same time. It is quite simple, the telecom providers want to be paid twice for delivering the content; by the consumer and by the provider. It is purely greed and until the regulatory agencies are given the power to correct it, it will get worse for both provider and consumer.

Dear Comcast/AT&T/Verizon/Et al

[PortHaven]

I pay you $68/month for my broadband internet.

I don't give a damn about your whiny bitching, you deliver my content. If Netflix is the content I want, you !@#$ deliver it.

Playing these BS games is just you being greedy !@#$s.

The fact that my internet bill went from $35 --> $68 a month in a period of 7 years pretty much tells me you're just a bunch of greedy fucks.

So at this point, I am of the opinion we need to file a class action lawsuit against you for not delivering what we paid for.

And yes, your contract stating that said performance may not be available at all times, I don't think that will protect you. Because IMHO that's a good faith clause, that says hey sometimes shit happens. Sometimes bandwidth or connection will be down.

But in no way does that give you the excuse to have 0% uptime for providing service. And that's what you've been doing with your games.

AT&T - Fed wants their money back...

[Anonymous Coward]

Guess what AT&T, the Feds want their money back - you know, the millions they paid out for you to improve your infrastructure, those same millions that you gave your execs as bonuses while doing nothing to improve your infrastructure.

Yeah, those millions. While we're at it, they're going to revoke your licenses to be in the communications business, that includes cable, internet, cellular and phone service nationwide.. Why you ask? Well, it's due to your own arrogance and incompetence. You pissed away resources to improve your status, doubled and tripled the cost for communications and now have the temerity to ask content providers to pay you to deliver data that they've already paid to have delivered, that your customers have already paid you to deliver...

Sorry Charlie, but you can't do that. That's extortion and blackmail, that puts you (along with Comcast, Verizon, Time-Warner) up for Rico Act violations, please enjoy your time in prison and your loss of all infrastructure, patents and copyrights, you'll have nothing left.

The good of the people will prevail.

Between Netflix and Youtube

[PortHaven]

They're also the reason we're willing to pay $70/month for internet.

Honestly, this is the tactic they should take...

[PortHaven]

Netflix announces that Comcast customer's (and only Comcast customer's) rates will go up $2/month.

Who's not paying enough?

[wangmaster]

I'm somewhat sympathetic to the ISPs issues.
1) Internet connectivity at the end user level is oversold. AT&T (comcast, timewarner, google fiber, [insert your ISP here]) does not charge in such a way that every single user can have 100% unfettered access to your bandwidth all simultaneously. It's just the way it works
2) Netflix may pay their ISP for their bandwidth usage.

Here's the disconnect. Netflix's ISP and [insert your consumer ISP here] do not share the same network. Thus at some point, the two ISPs have to cross some barrier. Now if all of [insert your consumer ISP here]'s customers are simultaneously connecting to Netflix at the exact same time for primetime hours, who's responsibility is it to ensure that the peering arrangement is fair? Does the consumer ISP need to pay to make sure that the peering relationship is such that all their users have the ability to stream from Netflix unfettered? Considering 1) above, is this fair to the ISP? They could do so, but to maintain their existing cost structure it'd likely mean that they may have a smaller pipe to another peer. Is it fair to users using those other peers or do they also have simply make sure ALL of their peers are able to fully pass 100% of traffic unfettered at peak times?

The simple answer is, if you expect the consumer ISP to allow full bandwidth to all of these sites, it's going to significantly raise the cost of bandwidth per end user. So we're complaining that consumer ISPs are demanding money from Netflix, but the alternative is to demand more money from the end user or eat the costs. We know eat the costs is never an option in the US market system :). So where's the money coming from? If the consumer ISP started charging people more for this, people bitch about being charged more rather than bitch about crappy Netflix.

Perhaps Netflix's tier 1 should pay for a larger peering pipe to the consumer ISP. But where's that money coming from? They're going to increase Netflix's rates, but even then, the consumer ISP would have to have the proper equipment to handle the larger peering pipe.

I don't really agree with the entirety of either Netflix or the consumer ISP (AT&Ts) arguments, but peering bandwidth has always been a balancing act, especially with multiple networks you have to peer with. This is why we have CDNs to begin with, and CDNs are paid for by the content producer, and they in turn either pay the consumer ISP to host their gear, or work with the consumer ISP to come up with a mutually beneficial decision. In some cases, the reduced bandwidth flowing through the peering reduces the ISPs costs that they can justify hosting the CDN equipment without asking for any money.

I do agree that it's wrong for a consumer ISP to purposefully lopside their peering arrangements to hurt a competitor, just like I agree that there's nothing wrong with the notion of paying an ISP to host a CDN appliance. Given our lobbying system, do you really think that net neutrality legislation will even begin to address the many nuanced aspects of this issue?

Re:Who's not paying enough?

[Todd Knarr]

This is what peering agreements handle, and they're already in place. Netflix pays it's Internet provider. That provider in turn has an agreement with AT&T wherein they pay each other for handling each other's traffic. The problem is that AT&T's mostly an end-user network, primarily clients who receive data with very few servers who send data. That means that at the peering point it's primarily the providers AT&T peers with who handle traffic for AT&T's network, with very little traffic bound for those providers handled by AT&T's network.

AT&T simply doesn't like the terms. When an AT&T customer requests data from Netflix, providers like Level 3 handles that traffic as it passes from Netflix to AT&T. AT&ampT has two choices. It can peer with Level 3 at the same exchange where Netflix connects and handle delivering the traffic across the AT&T network to their customers. This is usually relatively cheap, but it means AT&T has to build a larger backbone network. Alternatively, they can peer at points closer to their customers and let Level 3 handle the cross-country transit. This way AT&T avoids having to build a cross-country network to deliver data, but they don't like having to pay Level 3 for handling the transit traffic. They'd rather have Netflix picking up the bill for it. But why should Netflix have to pay to accommodate AT&T's decisions about how to build their network? This rightly ought to be a matter for AT&T to work out, deciding what the trade-off should be between the cost of buying cross-country transit capacity from someone else vs. building their own cross-country network.

The first rule of PR war is be a hypocrite

[interkin3tic]

The first rule of PR warfare is accuse your enemy of whatever it is you are doing. If you're being greedy, accuse the other people of being greedy. If you're spending taxpayer money needlessly, accuse your political opponents of wasting tax dollars and then imply they're going to raise taxes. If you're committing a war of aggression, accuse the other side of being the aggressive instigators. If you burned down the Reichstag, say your opponents burned down the Reichstag.

The public, who wants a reason not to care, will take both of you saying the same thing, and will side with whoever it is they want to side with. They like believing the world is a just place, so they'll assume you're both assholes and ignore it.

Sadly, the reverse tactic does not work, we cannot accuse AT&T of only wanting what is fair.

Re:Oh, the Copper-Squatters club.

[Average]

Straight letter-of-the-law, there's no exclusive right to lay copper wires anywhere in the US. No franchise agreements since the Telecommunications Act of 1996 passed are allowed to be exclusive. This theoretically supercedes state, local, and even HOA/apartment management policy.

Now, again, the reality on the ground is very different. Cities can make it very easy for a competitor to come in. Or they can make it almost impossible (not allowing access rights similar to the incumbents, demanding almost-instant universal coverage (while AT&T offers U-Verse on some blocks and 768/128 ADSL in poorer neighborhoods and calls it 'universal coverage')). But, that's on your local and state governments to get over (but, remember, Comcast and AT&T spend a lot of money to keep those roadblocks coming). The Feds opened up the market years ago.

I'm sick of these stupid analogies...

[brxndxn]

There is no way to morally or technically side with the ISPs on this one. It is a revenue grab - simple as that. These fucking horrible companies - mainly AT&T and Verizon - have been double and triple charging customers for data on the cell phone side and now they are trying to bring it to the wired side. For example, they charge customers for text messages differently than voice calls. They charge customers for a metered amount of data accessed through their cellphones and then another set of metered charges for accessing via tethering. It's bullshit. It's the same fucking data. It's encapsulated data packets..
Don't forget that the US has some pretty shitty home Internet connection speeds compared to our standing in the world as a 'technology leader.' Don't forget that the ISPs in the US have received hundreds of billions of taxpayer dollars over the years to upgrade their networks. Don't forget that these companies are 'entitled' to your own property to run their data lines. Also, don't forget that these ISPs have relatively zero competition.
Also, do not forget that these ISPs run competing media providing entities. They would prefer to control your access to content - force you to watch commercials or pay monthly fees for channels - or force you to pay for 10 channels when you only watch one. When these companies are given an inch, they take a mile.
I write to my lawmakers telling them we need to look at gutting these companies - breaking them up and separating their media companies from the data providing part. Also, lawmakers need to understand that all data on the Internet is broken into packets. You can always tell who paid for the packets. In this case, AT&T and Verizon are trying to say they want more than the sending and receiving entities to pay for the packets - they want to charge extra for these packets to go in and out of their networks. Once that happens, they will just create more routes and more tolls.
I don't believe AT&T or Verizon deserve to exist as they currently do - they are putting the US at a huge disadvantage. Also, their CEOs are awful human beings.

but it *is* a net neutrality issue

[Chirs]

Given that they're specifically asking *Netflix* to pay extra. That's not just a peering issue, that's a type of traffic issue, which makes it a Net Neutrality issue.

It would be a straight peering/transit issue if the Tier-1 ISPs just told Cogent "your traffic isn't balanced, pay for the imbalance" without bringing up what type of traffic it was. In that case Cogent could pay the extra and then charge Netflix more for upstream. Netflix would then pass the costs on to their customers or would find a new ISP.

Re:but it *is* a net neutrality issue

[schnell]

In the old, old days (get off my lawn!) if you were a small ISP or web host you would just factor into your cost of doing business that you would buy transit from a Tier 1 ISP (MCI, UUNet, Sprint, AGIS[!]) who would deliver all your traffic to the rest of the Internet.

If you were cheap, you'd buy transit from a Tier 2 or Tier 3 provider who did the same thing - your customers would suffer longer latency but you'd save money. Those Tier 2/3 ISPs were paying the Tier 1s, et cetera, and factored that into their own costs.The Tier 1 ISPs recouped their network investment in part by the fees they collected from direct customers and indirect customers under those Tier 2/3 ISPs. When you moved up in the world, you bought transit from multiple Tier 1 ISPs to cut out the middlemen and get your traffic to the rest of the Internet faster.

Cogent has been trying forever to "jump the line" and get Tier 1 free peering, and it hasn't worked out so well for them. You either peer settlement-free (truly "peer") or you don't, and pay for it. There's no option, unfortunately, for differential payment. (BGP is BGP, and it would take a lot of work to try to DiffServ or partially bill for that.)

Netflix is suffering from the same desire Cogent and legions of Tier 2/3 ISPs have always had - to get free peering. It ain't gonna happen, but the only difference is that Netflix is trying to make this a Net Neutrality argument given their importance in the content consumption ecosystem. I'm not saying they're wrong, but it is a well worn argument that runs counter to the history of the Internet.

Re:but it *is* a net neutrality issue

[laird]

They're not asking Netflix to pay anything for transit that Netflix is buying through Cogent - they paid Cogent for that bandwidth.

AT&T is an ISP, who delivers bandwidth to customers. ISPs do peering arrangements with other ISPs because they exchange data with each other roughly equally, and it make more sense to exchange bi-directional traffic for free than to waste time and money billing each other for charges that would roughly cancel each other out.

Netflix is asking for a peering arrangement with AT&T. Netflix isn't an ISP, they are a content provider. Content providers pay their ISPs for transit to push data into the internet for delivery to consumers. And in particular, Netflix doesn't exchange balanced traffic with AT&T - they push a lot of traffic into AT&T's network, and don't receive any traffic, so it's a completely one-sided traffic flow. And that you pay for.

It's not an issue of Net Neutrality. Any content provider who wants bandwidth from an ISP pays for it. And there's no indication that AT&T is differentiating between Netflix' traffic and anyone else's, which is what Net Neutrality is about. If anything, Netflix is demanding preferential treatment over other content providers (who pay for bandwidth, and don't have peering arrangements), and they're trying to use their market power to push AT&T into giving them preferential treatment. Which is exactly the OPPOSITE of Net Neutrality.

Netflix isn't stupid - they know all this quite well. So Netflix wanting to peer with AT&T and talking about Net Neutrality is a bunch of BS hand-waving trying to trick non-technical people into complaining about AT&T, generating some faked-up bad PR to pressure AT&T to sell bandwidth to Netflix cheaper.

Reality

[TheSync]

1) In telecom [telegraph, telex, telephone] "sender pays" has been the rules on settlements. Just like a sender pays to put a stamp on a letter. Even when a customer of a CLEC 1 initiates a call to another CLEC 2 through an ILEC, CLEC 1 pays ILEC, ILEC pays CLEC 2. This is why there were many of these free teleconference systems, they are run by CLECs trying to get settlements by having more people call them long distance.

2) There was a brief period of the Internet where "no one paid" for the Internet because of government support, and the result was a typical tragedy of the commons - horrible congestion (the 56K NSFNet). Eventually the NSFNet had to classify traffic into high-priority terminal sessions and lower priority traffic like FTP.

3) The CIX came along to interconnect large commercial networks. These networks were generally exchanging equal amounts of traffic. Once you bought into CIX, you peered without settlements.

No-Pay peering with others that exchange equal amount of traffic with you in both directions makes technological sense due to symmetric bandwidth capacities of interfaces.

For example, a network service provider's 100 Mbps FDDI connection at the MAE-EAST provides 100 Mbps in both directions. It doesn't make sense to peer with someone who sending you 100 Mbps and only receiving 1 Mbps of your traffic.

Peering and/or settlement agreements between networks have evolved over time to balance the real-world business situation. For example, you might not want to charge as much to a customer that runs a huge, dependable software archive that your other customers benefit from. Similarly, today's cable providers probably should make Netflix pay less, but Netflix should still pay something.

I feel this is something the market should work out.

In the meantime, we need to figure out how to enhance competition in the local ISP market. A Federal law to make local monopoly franchises granted by government illegal would be a good start...

Re:Reality

[Average]

"A Federal law to make local monopoly franchises granted by government illegal would be a good start...".

Congress did that. In 1996. There is no local monopoly franchise in your local community. There is, de facto, an economic monopoly/weak duopoly. And in many cases, local governments are actively hostile to competition (because they make a lot from franchise fees from the incumbents and don't want prices to fall). But, what you're asking for? Happened. Is old enough to graduate high school this year.

Wrong approach.

[Karmashock]

Netflix shouldn't even be talking to these people. Literally not even answering the phone when they call.

Rather... Netflix should keep their customers and media informed of bandwidth throttling and then let those customers and the politicians terrify the ISPs into doing their jobs.

Understand, I don't like using the politicians to push companies around. Its using one evil against another.

That said, the ISPs have contrived a monopoly for themselves. There is but one phone company in most communities and one cable company.

The reason for this is largely down to leases on poles and tunnels that the actual wires run through. The ISPs have set up a system for leasing this space that really no one else can afford or process the paper work to buy. As a result, they have no competition throughout most of the country.

Very well... then they complain when they don't have enough bandwidth to process all the customers they forced to use their wires and no one else's wires.

THAT is a problem.

They either accept net neutrality OR they we reexamine all these deals they've cut with local municipalities and states and counties to find the details that ultimately sustain their monopolies.