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Netflix CEO On Net Neutrality: Large ISPs Are the Problem
KindMind writes: At Wired, Netflix CEO Reed Hastings has posted his take on net neutrality. He lays the problem at the feet of the large ISPs. Hastings says, "Consider this: A single fiber-optic strand the diameter of a human hair can carry 101.7 terabits of data per second, enough to support nearly every Netflix subscriber watching content in HD at the same time. And while technology has improved and capacity has increased, costs have continued to decline. A few more shelves of equipment might be needed in the buildings that house interconnection points, but broadband itself is as limitless as its uses. We'll never realize broadband's potential if large ISPs erect a pay-to-play system that charges both the sender and receiver for the same content. ... It's worth noting that Netflix connects directly with hundreds of ISPs globally, and 99 percent of those agreements don't involve access fees. It is only a handful of the largest U.S. ISPs, which control the majority of consumer connections, demanding this toll. Why would more profitable, larger companies charge for connections and capacity that smaller companies provide for free? Because they can."
Cats on Dogs: Dogs are the problem.
In the absence of governments preventing them quasi-monopolies will act like quasi-monopolies?
"Oh, and it would be nice if the US government would not make it so damned difficult for me to start a proper ISP."
You just mentioned the gun that's being used.
Or, pull a Google, and do one town at a time and watch the incumbents suddenly offer free peerage and lower rates.
"One town at a time" was pretty much how the incumbents got where they are. Yes, they bought out other companies to get to the size they are, but those companies did it one town at a time, for the most part. Nobody fell off the turnip truck with billions of dollars putting cable in a hundred cities at the same time. It's like nobody comes out of the womb weighing 600 pounds, it takes a lot of time to get there, and THEN you get your own TV show.
Anyone who thinks they'll get to be the next Comcast or TWC by a massive multi-city buildout is, well, I'd rather they not clutter up the neighborhood with their poorly planned systems. They'll only be in the way of, and muddy the waters for, the next real competitor.
In many cases, these big ISPs are also big Cable TV providers. Netflix (and Internet Video in general) threatens their Cable TV model and so must be dealt with. They can't simply block all access to Netflix. The FCC might be weak willed but it still has enough of a spine that it wouldn't ignore this. (Not to mention the lawsuits and bad press that the company would get.) Since they can't block it, they attack it with a two pronged attack:
1) Institute data caps and overage fees. This means there is no a hard limit on how much Internet Video you can watch. They might be forced to set them high at first, but that also means that they can leave them where they are and lock out HD streams. (Note that Time Warner Cable wanted to make a 5GB cap but was forced to back out of that plan due to bad press and customer outcry.) In the case of overage fees, this will direct money to the cable companies' pockets in case users still try to watch Internet TV. It also makes Internet TV more expensive so that Cable TV will look like a better deal by comparison (even though that "more expensive" is the result of the cable companies' overage fees).
2) Make fast-slow lanes. If Netflix doesn't pay up, their site will be slow and nearly unusable. Then the cable companies can tout how you won't need to wait for their video services to buffer. If Netflix does pay up then the cable companies make money off of Netflix. This will also force Netflix to raise their rates (to cover this new cost of doing business) resulting in a more favorable - to the cable companies - Netflix/Cable TV price comparison. (Just like the overage fees.)
So this isn't just the big ISPs not wanting to pay to upgrade their networks. It's also them protecting their old business models against these newfangled competitors.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
Notify customers of these big ISPs that within two months they will no longer be providing the full service via that ISP.. sit back and watch the ISPs customers leave in droves.. of course, this is just turning the tables on the ISP net neutrality rules, but when the ISPs are already playing hardball and have their own man in charge of the FCC, then it's time to give them a taste of their own medicine.
You forget who Comcast owns. They wholly own NBC and Universal Studios, two major sources of Netflix content. And they're already screwing with the availability of NBCUniversal content on Netflix. If Netflix tries to play hardball, a whole boatload of shows and movies will just vanish out of their catalog.
A media company that owns the last mile is an abomination, and the FTC should do something about it.
Netflix does not have to pay ATT/Comcast/Verizon a single dime. All it needs to do is [...] buy proper transit
So they don't need to pay those three, but they must pay someone, for what amounts to transit to themselves. Transit was a concept when a small ISP bought from a large ISP to get the small number of users to The Internet across unequal networks. Peers are when the networks were more even.
It was always from the consumer point of view. Only recently did the concept of charging content for content transit. If my ISP is charging for content transit, I want my rebate/discount. They are getting paid twice for the same thing.
Learn to love Alaska
While I agree that ISPs are a big part of the problem, the downside isn't that we don't get our utopia....
A bigger part of the problem lies with people who believe that paying a fair price for service, and then receiving the paid-for service, is some form of utopia rather than a requirement.
No, I didn't RTFA.
That was self-evident.
They don't want to pay for bandwidth anymore.
What's so unreasonable about this? Netflix isn't wanting this for free, they are wanting peering agreements.
Basically, they are saying, let us run fiber directly to you so that:
1) Our customers get a faster connection
2) Your customers get a faster connection to us.
3) Your customers are no longer bogging down your internet connection with traffic to us
4) Your customers get a faster connections to the rest of the internet
5) You don't have to buy bigger pipes to the rest of the internet therefore saving money.
etc...
It's a win/win for all involved. There is no reason money needs to be continually exchanged as it's now a private
lan between the two companies and I'm sure Netflix would gladly pay for the hardware.
The only reason they don't want to peer with netflix is because they feel like they own the customers and
are willing to hold their own customers hostage in the hopes that netflix will cave.
Netflix unfortunately is not critical enough to do the opposite. (i.e. peer with us or your customers
can't use netflix) as netflix actually has competition unlike the people they are trying to peer with.