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Cable Companies: We're Afraid Netflix Will Demand Payment From ISPs
Dega704 (1454673) writes While the network neutrality debate has focused primarily on whether ISPs should be able to charge companies like Netflix for faster access to consumers, cable companies are now arguing that it's really Netflix who holds the market power to charge them. This argument popped up in comments submitted to the FCC by Time Warner Cable and industry groups that represent cable companies. (National Journal writer Brendan Sasso pointed this out.) The National Cable & Telecommunications Association (NCTA), which represents many companies including Comcast, Time Warner Cable, Cablevision, Cox, and Charter wrote to the FCC:
"Even if broadband providers had an incentive to degrade their customers' online experience in some circumstances, they have no practical ability to act on such an incentive. Today's Internet ecosystem is dominated by a number of "hyper-giants" with growing power over key aspects of the Internet experience—including Google in search, Netflix and Google (YouTube) in online video, Amazon and eBay in e-commerce, and Facebook in social media. If a broadband provider were to approach one of these hyper-giants and threaten to block or degrade access to its site if it refused to pay a significant fee, such a strategy almost certainly would be self-defeating, in light of the immediately hostile reaction of consumers to such conduct. Indeed, it is more likely that these large edge providers would seek to extract payment from ISPs for delivery of video over last-mile networks." Related: an article at Gizmodo explains that it takes surprisingly little hardware to replicate (at least most of) Netflix's current online catalog in a local data center.
"Even if broadband providers had an incentive to degrade their customers' online experience in some circumstances, they have no practical ability to act on such an incentive. Today's Internet ecosystem is dominated by a number of "hyper-giants" with growing power over key aspects of the Internet experience—including Google in search, Netflix and Google (YouTube) in online video, Amazon and eBay in e-commerce, and Facebook in social media. If a broadband provider were to approach one of these hyper-giants and threaten to block or degrade access to its site if it refused to pay a significant fee, such a strategy almost certainly would be self-defeating, in light of the immediately hostile reaction of consumers to such conduct. Indeed, it is more likely that these large edge providers would seek to extract payment from ISPs for delivery of video over last-mile networks." Related: an article at Gizmodo explains that it takes surprisingly little hardware to replicate (at least most of) Netflix's current online catalog in a local data center.
What part of that suggests they're afraid Netflix will threaten them?
Reminds me of the stories of panhandlers begging at intersections who get picked up by their chauffeurs at the end of the day to go back to their mansions.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Don't discount the misplaced priorities of the masses.
Prhaps they don't affect change at the ballot box, but the thongs that really matter to them can drive them into a frenzy.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
This might be reasonable if it was coming from a group who hadn't spent huge sums of money fighting to stop legislation that would have made it illegal for either netflix or comcast to charge for the specific route. That being said if Comcast, Time Warner, etc. make Netflix pay to be inside their networks now and in the future Netflix turns around and says "if you don't pay us to stay we will remove our servers from your networks and your customers will have to get Netflix through standard routing" then I have no sympathy for them but they may be right in worrying.
Companies that are virtual monopolies (south park pointed this out) exist in local areas. I can drop netflix and get hulu, or whatever, no matter where i am. But if verizon is the only place that has dsl in my town, or a cable co dominates the market in a city and the dsl is a joke by comparison, i'm fucked. period. netlix can ask for money, perhaps. But comcast for example can simply unflap its nipple-cover and rub that shit raw, because there is no actual competition for real reals. any competitor can offer online video streaming, and there are a whole bunch i can choose from. i happen to have netflix, but i also use hulu and other services too. i pay for what i use and i'm fine with it. But when it comes to ISP choice, i have 2 choices. dsl that is barely enough to have one stream coming in, or one other option that is way more expensive. i choose the expensive one because a: i'm a nerd, and b: throwing another 100 dollars a month at dishnetwork or whoever seems like a huge waste of money :)
They are dreaming. We are thinking about throttling them here right now. Why should we let all those other sites suffer due to one service using nearly 75% of our bandwidth.
Customers are DEMANDING those bits. If you can't afford to keep those bits flowing, start charging your customers more.
So it's only ok when you do it, then? What a hypocritical joke. I have a better idea: just focus on providing the most reliable bandwidth on the network for your customers as possible and let them provide the content.
They are dreaming. We are thinking about throttling them here right now. Why should we let all those other sites suffer due to one service using nearly 75% of our bandwidth. Let them fix their busted streaming model to include some caching ability.
Surely you're not talking about Netflix? If you're an ISP, Netflix will peer with you for free at 8 major POPs. They will even give you caching servers to put at your border. If one service is consuming 75% of your transit, someone probably does have a busted model but it isn't Netflix.
Thanks to the War on Drugs, it's easier to buy meth than it is to buy cold medicine!
Other customers are demanding other bits and they don't wan't to pay more to feed others hunger for back to back streams of game of thrones. Its a poorly designed system and its not the isp's at fault its the netflix don't understand how to do things efficiently. And that box that locally caches netflix, it uses almost as much bandwidth as our customers use. Thats straight from netflix. Its crap on top of crap with them.
you've had all the advantages to do it for years... any of the major cable companies has a huge advantage if they wanted to release a video on demand service.
but you're so determined to suck off the TV model that you've crippled yourself.
And now you're paying the price.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
It is like carmakers such as GM / Ford / Chrysler are saying that they are afraid of the DMV start charging them
Translation: We'd do this to a small company in a heartbeat, and we're really disappointed we didn't kill net neutrality before there were enough big players to fight us on this. Unfortunately we have to make ourselves out as the victims, again.
These guys will do anything to keep their monopolies, and want to be sure they can do anything they want to milk customers.
As usual, this is lobbyists and lawyers and PR people making their clients out to be the poor downtrodden victim here.
And, of course, the FCC being totally sympathetic to the plight of these poor, downtrodden monopolies, I'll be surprised if they don't give it to them.
Lost at C:>. Found at C.
I guess if Netflix was doing something better than me at a cheaper price I would be worried about my customers demanding it too.
In a sense this is already happening, Netflix is charging me per month and it was so good that I stopped paying for cable. No commercials and for the small amount of time I actually spend watching TV in a given day it is totally worth it. So now Netflix gets my money and the Cable company does not. (Well they still provide network access.)
They colocate content servers with telecommunications providers. Just not with podunk microISPs who boast that they host seven whole websites.
Throttle Netflix and you can kiss your residential customers (if you have any substantial number) goodbye. You don't have the scale or technology required to create a virtual monopoly around your customers. They'll drop you in a heartbeat in favor of the next service to offer DSL or point-to-point wirless.
To extort money from someone, you need to threaten them with something. Netflix has no leverage because their customers will most often have no choice in ISPs.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Cable companies have been gouging customers for decades (high prices, low speeds, low quotas, even worse in Canada), they're trying to extort streaming services. They're afraid of competition and are doing everything they can to stop them instead of competing.
The problem is ISPs are also TV providers in most cases, something that should never have been allowed. Of course they'll try to protect their TV business. Here in Canada (Montreal), Both Bell and Videotron sell internet and TV services, why do you think they have such ridiculous quotas? 60GB is not that much, especially when watching Netflix.
ISPs should welcome those servers since it will cut down on traffic, not charge Netflix.
I've got better things to do tonight than die.
I must be missing something - you are unable to provide the bandwidth you advertise to your end users and you are complaining that the companies they are requesting data from are at fault? This is the same as saying that the concert at the stadium is at fault for the traffic backups. Wouldn't the fault be more with the road providers? Especially when the concert people are saying "Hmm, we know this is possibly a problem - we can put a live hologram local to your people so they don't have to get on your roads" and instead of saying "yes", you say "no, it's all your fault we can't provide it". Your end-users are your customer - and should you start throttling because you're unwilling (or unable) to provide the bandwidth, they are well within their rights to nail you to the wall for failing to provide SLA data throughput if it is correctable by you.
And that is why they're offering those servers *for free*, to cut down traffic.
I've got better things to do tonight than die.
"Whom". It is ". . . who is it that is actually paying whom?"
Correct - in formal usage. But 'whom' is in decline, and for many writers is mandatory only when governed by a preposition.
You're missing the fact that revek is part of a microISP which serves a county that has a population of about 20,000, out of a county seat with a population of about 10,000.
Netflix is somehow responsible for his cost issues with buying bandwidth from a real telecommunications company, and his lack of scale sufficient to justify co-locating a content server to serve such a small population.
They are dreaming. We are thinking about throttling them here right now.
So why don't you tell us who you work for so we know who to start filing lawsuits against for abusing their monopoly?
You want to charge your customers for Internet access, and then not actually provide it. Thats what you're saying. Your customers paid for that bandwidth when they paid you. What you're saying is why you shouldn't be allowed to do business. Either provide the service you sold or get out of business.
I mean really how hard would it be to include some kind of encrypted cache that would store media for a time.
You don't actually work for an ISP, do you? This exactly what content delivery networks like Akamai and Netflix's own CDN do. The fact that you don't know about them makes your story highly suspect.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
Other customers are demanding other bits and they don't wan't to pay more to feed others hunger for back to back streams of game of thrones.
Thats your problem. You over sold service and can't provide what you sold.
Its a poorly designed system and its not the isp's at fault its the netflix don't understand how to do things efficiently.
Actually they do, which is why they'll colo a rack for you for free, or peer with you at any major pop, for free.
The poor design is yours. You're just a shitty ISP.
it uses almost as much bandwidth as our customers use. Thats straight from netflix. Its crap on top of crap with them.
Bullshit. Its a local cache, exactly what you were demanding they do originally. You're clueless.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
No, they were bullying us!
It makes no sense to people who know the situation, but maybe for a split second they can confuse someone who doesn't know the situation.
God spoke to me
Don't worry.
We'll just pirate the shit out of the video content if the service isn't implemented in a way we like.
You are misunderstanding the substitution rule. 'Who' for subject/'whom' for object.
So your statement should read,
"who gives a fuckm?"
If you believe this, then you're falling for the exact same two-faced argument the cable providers said to the FCC back during the first net neutrality debate. I.e. they told the FCC net neutrality will absolutely DESTROY infrastructure investment, and did an about-face and told Wall Street that it wouldn't put a dent in investment.
"Fool me once...shame on...shame on you. Fool me, can't get fooled again!"
To be fair, Akamai does charge some ISPs for its service. At least according to someone who actually went over the financial reports, Akamai doesn't get actual money from this, but rather a reduction in the cost to co-locate the servers.
Still, this is not the same thing as TFA. The thing that Akamai charges ISPs for is the peering traffic saved, not access to the content. If an ISP says "no", then no local Akamai cache, and the service is as good as the ISP's bandwidth to other providers that do have an Akamai presence. Neither availability nor performance are hindered by refusing to do business with Akamai, except losing the obvious advantage of a local cache.
Disclaimer:
I (currently) works for Akamai. This post, however, is not affiliated with Akamai in any way or form. The opinions do not represent those of my employer, nor does the information employed come from any data not publicly available.
Shachar
Netflix is perhaps the most ruthless corporation to have ever existed. They will stop at absolutely nothing to dominate the economy. In a year or two stopping them will be impossible. We must act now, otherwise it will be too late.
Why? Does their player mine Bitcoins for the Winklevii in the background while playing movies?
ESPN is the most expensive cable channel. It accounts for the largest chunk of your bill. I have never watched ESPN and don't plan to. Why can't they go with a subscription model like HBO?
Only the State obtains its revenue by coercion. - Murray Rothbard
Isn't that what consumers pay Netflix for (and justly so!)? And where the hell would that work? If the ISP didn't pay the bill, then the service would fail and the consumer wouldn't pay their part of the bill either. These guys are fucking insane. A chimp eating carrots out of his own asshole makes more sense.
Reality: cable companies are afraid of Netflix because they fear the day they lose the competition with them.
Chewbacon
The Bible is like Wikipedia: written by a bunch of people and verifiable by questionable sources.
Is it a requirement that cable company employees (probably above the level of grunt) must be utterly despicable {socio|psycho}paths, or is that the industry just doesn't attract anyone the rest of us wouldn't be better off without?
Fascinating.
A whole article on their CDN boxes and not one mention of the OS. I'm surprised. It's FreeBSD.
To be fair, Akamai does charge some ISPs for its service. At least according to someone who actually went over the financial reports, Akamai doesn't get actual money from this, but rather a reduction in the cost to co-locate the servers.
What you're saying, as I understand it, is that Akamai is paying ISPs to house its CDN servers and gets a discount in some places. This makes sense due to the business model in place, but I don't think you can say that Akamai charges ISP because they get a discount.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
Netflix is going to bend internet providers over?
http://online.wsj.com/news/art...
So why are they being comcast bitches?
_ _ _ Go for the eyes Boo! GO FOR THE EYES!
And yet the rules you're proposing apply to these "microISPs" (of which I am the senior network engineer of one), and the last bastion of a free market in the US ISP market. Having to accomodate Netflix was not easy for us (until they started doing open peering at our local IX- we're fortunate enough to have a presence at one). Previously, we did not meet their private peering guidelines (wait- what's this? Netflix is allowed to set limits on who they will peer with??!! but.. but.. Net Neutrality!) and they were *crushing* our other upstreams, that were far more than adequate for all other use, minus Netflix.
Maybe you think we podunk ISPs have no place in the large world of monopolistic ISPs... My customers will be smiling at you with their Gbps FTTH connections. I hope you really enjoy your Comcast, because once you give content provides more power than free-market eyeball networks over management of our network and cost structures, you've killed us once and for good.
Yes, it is what I'm saying. However, I don't think even if the balance turned out to be positive on Akamai's side, even that would count as "asking ISP to pay for access".
Imagine a small ISP. Not a lot of hosted content. In order to boost local content, this ISP provides co-location services at lower than usual costs. Due to the same considerations, the ISP pays a lot of peering costs (mostly incoming traffic, not a lot of outgoing traffic).
And then this ISP has an idea: I'll contact Akamai. The Akamai network accounts for over 25% of web traffic. If I have a local Akamai presence, this will greatly reduce my peering costs. Akamai's sales people are aware of this equation, of course. As a result, the deal finally negotiated mean that the ISP is paying Akamai for the privilege of hosting Akamai servers!
And the ISP is ecstatic. Yes, they are hosting a commercial server for free AND paying for the privilege, but they are saving a bundle on their peering costs. This is a straight bandwidth for bandwidth money-equivalent transaction. If Akamai started asking for too much, the ISP could tell them to take a hike. Presumably, for that to happen Akamai would have to ask more than the bandwidth costs it is saving!
Should Akamai choose to play dirty (as far as I know, they never do), they would be in a stronger position than Netflix. After all, you can get Netflix content elsewhere. Conversely, you cannot get to, e.g., apple.com without going through an Akamai server. If Akamai isn't doing it, I don't think there is any danger of Netflix doing it.
Shachar
When the first question your users ask stops being "Can I watch Netflix?" then you can charge the ones that do ask it more for the exorbitant service level they are demanding.
Until then, since it IS the first question most of your users are probably asking you need to suck it up and provide the service even if it means charging more. If your ARE the only provider because of the small area you are in then your users will either pay or give up netflix.
I get that the meteoric rise in online video streaming by customers puts pressure on ISPs because if affects the oversubsribe ratio that they can use (which is required to turn a profit) while still providing a good user experience.
But what I don't get is why you can possibly blame Netflix. Your customer requested 100GB from Netflix last month. Netflix supplied it based on your customer's request. If you think 100GB (or however much) data in one month is too much then throttle your customer, but do it fairly based on each customer's usage and don't play favorites with which companies you allow your customers access to. 100GB of Netflix traffic should be treated the same as 100GB of porn, or whatever else your customer is getting up to.
My university's residential internet connection started undergoing major strain several years ago, primarily due to online video. So they implemented traffic throttling. I don't remember the precise details, but it was along the lines of a daily 1GB of unthrottled data between 4PM-1AM after which speed was reduced , and no throttling from 1AM-4PM. This was a completely fair and balanced way of providing a pretty good user experience while limiting traffic during peak hours to avoid congesting the network.
Oh I completely agree my customers should have the last say. You are not one of my customers, and judging from the assertion you just made, the aggregate demands of my customers were fed to you by Netflix, and not my customers.
We actually do *not* blame Netflix. We just get real scared at people calling draconian restrictions on us managing the limited network assets we have "Net Neutrality".
The only thing I blame Netflix for is misconstruing this fight for free peering on their terms as Network Neutrality.
Real Net Neutrality is a serious issue. Preventing eyeball networks from shaping their traffic to fit their aggregate needs lest they infringe on some fictional right of a content provider? Simply ridiculous.
BTW, yes, their solution was fair and good. Now, what if Netflix were able to demand that your university ISP expand their network infrastructure to accomodate said throttling, or demand that your university ISP peer with them, or demand that they upgrade their backbone links. What if they simply didn't have the funds for it, or the aggregate will of the customer base (you) was not in favor of that allocation of funds?
Now, what if *any* content providing network could do this?
Must I really implement throttling across my entire customer base when 10% of them use 90% of the bandwidth?
From my perspective, it's perfectly reasonable for either Netflix *or* the ISP to demand one or the other side pay for a private peering link. Who that is that pays should be dependent on who has the facts on the ground for both networks and their effected customer bases. I can't be forced to peer with every content provider that wants to peer with me. And Netflix surely doesn't allow me to set the terms of free peering with them. I have to follow the will of my customers and the reality of the total market.
Finally, being Netflix has a ways to go before hitting 254 million subscribed customers, I find it unlikely that their customers represent the majority in any ISP's network. They certainly weren't in mine. If my customer base is unwilling to pay for network expansion for Netflix, and Netflix doesn't want to either, guess what. I'm throttling them.
Whether it's the ISPs or the big content providers: The bottom line is that eliminating net neutrality would cement the power structure and disallow smaller competitors to rise. It would essentially undermine the concept of free trade and equal footing for everyone to compete in a free market.
In the end, what would happen without net neutrality is that big content providers would have to pay ISPs. Either in form of protection money ("shame if anything happened to your fast pipe...") or in form of a bribe ("Ensure that this little upstart there gets 64kbit at best").
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
is not Blu-ray quality and thats what we want.
It is well known the BBC want to extend TV licensing to "watch again" (not quite the same as on-demand) services like iPlayer, 4OD etc. The argument goes that a PVR needs a license but a PC does not, and that this is an anomaly. I can easily see ISPs being used as middle-men to collect the fee.
It costs NetFix $X to supply the cache per month over the lifetime of the cache box. It also costs them $Y to populate the cache as this still has to go over paid transit + the cost of the tail $Z. Against this is the cost of just sending it all via paid transit $T. Remember the "cache" isn't a pure cache. It has movies pushed to it without there being a request for them in multiple forms.
For small nets $X + $Y + $Z > $T. As the size of the net increases the balance switches to $X + $Y + $Z $T.
Do you really think it is fair to demand that Netflix take a cost hit just to provide you with a cache?
"If a broadband provider were to {snip} block or degrade access to its site if it refused to pay a significant fee, such a strategy almost certainly would be self-defeating, in light of the immediately hostile reaction of consumers to such conduct."
You mean the hostile reaction you are getting right now as you do exactly that? Like how every one of your customers that has any other option dumps you in a heartbeat?
Yes, if anyone should be paying anyone, it is Verizon/Comcast that should be paying Netflix, as Netflix is providing the content that Veriz/cast sell to their subscribers.
Prediction for end of Universe #42: Fencepost error in Quantum_bogosort.cpp
They're a direct-to-customer subscription service.
Demanding payment from the carriers would be cutting off their own balls in search of a hand job!
Cable companies just don't get this "Internet" thing, do they? They can only view things through the myopia of their cable business model?
Chas - The one, the only.
THANK GOD!!!
Hey Comcast, Time Warner and others nice try attempting to show yourselves as the victims here. You guys will stoop to any twisting of the truth you think you can get away with. You are right about one thing screw around with the flow of data and all of your customers will unite and make your miserable lives worse. Why is it that American ISPs hate their customers and try to screw them every chance they get?
"If a broadband provider were to approach one of these hyper-giants and threaten to block or degrade access to its site if it refused to pay a significant fee, such a strategy almost certainly would be self-defeating, in light of the immediately hostile reaction of consumers to such conduct." Well, this part is certainly true, as we can see. Verizon is throttling Netflix, and there's a massive consumer backlash towards them. Which is doing nothing, because these very providers have secured monopoly or duopoloy status in just about every individual market in the country.
Netflix paid a peering deal with Verizon; and Verizon refuses to deliver. Speeds are just as slow as they were before the deal. If Netflix deserves anything; they deserve every cent they paid to Verizon; then they should sue for breech of contract.
Worth it to note that the chairman of the NCTA is the former chairman of the FCC, and the former chairman of the NCTA is the new chairman of the FCC.
Does that seem wholly farked up to anyone else other than me?
So... their argument is "Netflix would have done it first, so we have to do it sooner."?
please... let me sleep... a little more... yay, no longer annonmyous coward.
"Related: an article at Gizmodo explains that it takes surprisingly little hardware to replicate (at least most of) Netflix's current online catalog in a local data center. "
It's not surprising. It all boils down to the compression algorithm used. By maintaining a library of nearly exclusively B list movies Netflix is able to seed their algorithm with just a few titles like "Plan 9 from Outer Space", "Catwoman", and "Gigli". The rest of the movie files contain quite a bit of material that has a high degree of overlap with these films which allows for heavy compression. Did you know that "Hitch" for example only takes up 6mb when referenced across a library of these 3 films using the netflix compression schema? It's true.
ôó
Your so wrong i don't know where to begin. We have exactly one solution for bandwidth. We are not multihomed since there is one single pipe in this area. The local cache solution uses as much bandwidth as our users. Your ignorance of circumstance is obvious and rather pathetic. There is no money from the fed for last mile internet down here. We have to match our capabilities with resources. Its the crap streaming model thats at fault not our bandwidth. We are planning to buy more as soon as we can but it won't be enough. You know nothing about how oversold we are. I don't want a local cache at our headend I want it at the customer level, where it belongs. You don't hear us gripping about youtube its caches to devices not Netflix its crap on crap with them ad infintum.
Those servers still use a considerable amount of bandwidth for the updates. Per Gizmodo (I know, I know, but it's the first link I found) it needs 7.5TB every day. For a small ISP, that may be more than the users are consuming. Or at least close enough to make it not worthwhile.
If there's an image of this, we can retire this one
Youtube, backed by Google, has more servers, redundancy, and bandwidth than you do. This is true no matter who you are (unless you are involved with Google)
While it is possible that this 1 video would be hosted only on overloaded servers, a much more likely scenario is that whatever caused the slowness, had cleared up by the time you ran the tests. It's also possible that there is a caching server that's faulty, but that would usually mean a transparent proxy, which would be operated by Comcast.