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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."
It's extortion plain and simple. It's never been about actual capacity. Big Data is trying to squeeze as much revenue out of us as the can.
Cats on Dogs: Dogs are the problem.
In the absence of governments preventing them quasi-monopolies will act like quasi-monopolies?
While I agree that ISPs are a big part of the problem, the downside isn't that we don't get our utopia, the downside is that other countries are able to provide a more competitive near-utopia, locking us out of a leadership position on development of the Internet. That's the real fail, here. If we fail to lead, there will be others that are all too happy to fill our shoes and take our money to do so.
No, I didn't RTFA.
If media companies can become ISPs, why couldn't Netflix also become one?
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they can, just borrow $100 billion to build out a network, negotiate with every redneck and podunk town to get franchise rights to run their cables and spend more money for marketing to get customers
TFA sounds a little naive.
While I'm quite certain there's that "because they can" factor in there, and I've seen it first-hand when working for companies, it's just not as simple as how much data tan go through the fiber. There's lots of hidden costs that have nothing to do with interconnect bandwidth, like switching gear, power used by said gear, maintenance costs related to that, including salaries for qualified technicians spread all over the coverage area available to handle issues and outages (not that their crew is anywhere near "capable", but salaries are salaries even if they were monkeys).
So, yeah, they can. And there's probably a lot they do only because they can. But it's not that a single fiber would handle all the traffic, with zero cost. Bigger ISPs have bigger costs. They have more widespread coverage, which means their technicians have to travel more (or have to be more), they also need more switching gear, relays to amplify (well, re-create) the signal (which you do need every few km even with oh-so-state-of-the-art fiber, and they cost a crapload of money), routing, which is not the same for a huge ISP as it is for a town-wide ISP.
Scale doesn't necessarily decrease costs, and the nature of video streaming is that it's not perfectly balanced load either. With those ISPs, you need different co-location agreements.
Should they charge for it? Hell no! They should pay! Better netflix = more users, they're just too dumb to notice.
The gist of the matter is, that big ISPs are usually also big telecoms, and telecoms are used to operating with huge profit margins. Anything that pushes them into, not read, but less than obscene profit, they fight. Because they can. They don't really need to provide good service, their quasi-monopoly on the telecom side guarantees they won't die if suddenly people decide to switch ISPs (they won't switch cell companies as easily, because they probably all collude to fix prices - just speculation, but I wouldn't be surprised).
So, big ISPs need governmental incentives to do what small ISPs must do due to natural market forces (competition).
What does this tell you?
Telecoms shouldn't be allowed to act as ISPs. It creates market imbalance.
Generalize it a bit further: companies should be specialized. So they actually have to be good at what they do to prevail.
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Why is all the good stuff already modded 5, when I have mod points?
they can, just borrow $100 billion to build out a network, negotiate with every redneck and podunk town to get franchise rights to run their cables and spend more money for marketing to get customers
Or, pull a Google, and do one town at a time and watch the incumbents suddenly offer free peerage and lower rates.
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.
John Oliver really said it well, explained the nature of the shake-down... these ISPs are simply being greedy and not realising that providing a quality fast connection to their subscribers is in their own interest, providing poor quality connection to services that other ISPs are providing good quality to only serves to hurt their reputation and good will with their own subscribers. If was Netflix or any of these content providers that are providing great content for the ISPs, I'd play hardball.. it'd hurt their own bottom line for a while, but if they banded together with other content providers to enforce it, they would soon have the ISPs begging.... So what would I do? 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.
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One problem leading to broadband monopoly is city ownership of city roads. What alternative would you recommend? The only one I can think of is burying a few conduits in advance when performing other utility maintenance, and then leasing each individual conduit to an ISP to blow its own fiber or copper.
most netflix customers use it as a secondary service. it's the tiny percentage of cord cutters
Among some members of my family, I've detected a Grover Norquist mentality against any increase in entertainment spending. To afford another $120 per year recurring fee, they'd have to cut out something else. Cord cutters in countries where over-the-top video on demand (OTT VOD) services such as Hulu and Netflix are available recognize that everything but the "festering pile of social ills" that is televised sports is available on OTT VOD.
Sure, I'd be pissed if [TWC or Verizon DSL] or both were dropped by Netflix, but I can't switch to anyone else.
If the Internet connection where you live has become unusable, you could always switch to somewhere else. Compare this: I imagine a lot of people would like to move to a rural area, but they like the Internet more than they like the country.
How would a wireless mesh network reach from, say, Arizona to Indiana?
If not for Netflix taking on the fight, the ISPs would be attacking torrents as a huge problem along with propaganda ("OMG, think of the children!" or "OMG, terrorists use torrents!")
Torrents do not have protection like Netflix does. YouTube might also be a target, again be happy that torrents are not the #1 threat to ISP screwing their customers. When they were the #1 user, data caps, QoS games, tampering with packets and other schemes were developing. Thank you Netflix and YouTube for slowing the assault; ISPs had to give in a little due to customer demand for Netflix.
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Terms and conditions of most every ISP I've seen/used in the last decade or so forbid any sharing at the cost of disconnection
I'd imagine that business-class plans are less likely to forbid this. A hotel, for instance, needs to share a connection with its guests.
File this one under, "No Shit Sherlock".
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Old style TV takes about as much as a single Netflix stream. So for every channel canceled, they can support one more Netflix user. That doesn't sound like the channels are such a waste.
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Direct point-to-point links have no demands for other content. It's when you buy from an ISP who determines that they will not deliver part of the Internet they don't like. I've bought leased fibre services in many places, and nobdy has ever asked to put their content on it. The users have already paid someone for access to that Netflix stream, but that access provider is trying to extort additional profit from content providers.
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People who live in a civilized nation where that is far from the population's most pressing concern.
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Direct point-to-point links have no demands for other content.
Netflix putting all subs on one fiber is not a "direct point to point link", any more than all of comcast's subs in a community being on one fiber is. If Netflix is running the backbone and doing the content they are, for all intents and purposes, acting as an ISP.
While it is true that a single fiber could theoretically server all 44 million Netflix customers, consider the cost of splitting that traffic out to them...even if they were sitting on top of each other in a skyscraper capable of housing 44 million people. Then consider the end to end cost of distributing that traffic to reality.
If Netflix is running the backbone and doing the content they are, for all intents and purposes, acting as an ISP.
Why is the "I" in there? If Netflix is doing it, then it's a private network, not unlike an '80s frame relay network (just faster). They aren't providing "Internet". They are providing a video service.
By your logic, a cable TV network (with no data services) is an ISP because they are running a backbone and providing content.
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no, it will be The Open Edge Content Delivery Network.
http://www.toecdn.org/
Just FYI, Netflix already has several TV shows of their own.
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Obfuscant said in his comment that you need to be a 600 pounds media company to be able to get your own TV show, I was pointing out that Netflix was already big enough to have multiple shows of their own.
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Netflix has been getting troubled by the telecoms a lot, but how about YouTube? Are they less bothered by the telecoms? Do they just not complain publicly as much? How does being a part of Google make their situation different than Netflix's?
Companies like Comcast only know how to make money when the relationship to customers is like that of a gym membership, that is where lots of people pay monthly for a service they rarely if ever really use. They need us all to pay high fees to have big data pipes, but if all we do is regular web surfing it's almost impossible to use much bandwidth. Bittorrent and streaming video are the common ways people can actually generate significant usage. Comcast knows people love television and it's clear society is going to try to make the internet the delivery system for the modern replacement for television. As streaming media grows many people will not be in the gym membership you pay for and never use category, we'll have average users that are actually trying to use a good portion of what they pay to use. TFA talks about congestion at the ISP hand-off between Comcast and Netflix. Ethically I think it's on Comcast to provide carrier services for the traffic generated by and sent to their subscribers even if that demand is concentrated among a few high bandwidth services. I'd be willing to by into forcing Netflix to spread out their ingress access points geographically to efficiently distribute load, but I suspect that already happens. I do have to wonder if an entire nation streaming broadcast quality media to their televisions is going to prove a prudent use of resources.
Why is the "I" in there?
Because it is almost a certainty that were Netflix to manage to provide the fiber to send their data to their subs, it would be based on internet technologies and protocols. You know there is a small-i internet and large-I Internet, and you can have one that is limited in access while the other one is the worldwide interconnect of all the small-i versions, don't you? (And before you point out that ISP has a capital 'I', that's because it is an acronym, not necessarily because it is only talking about large-I internet services.)
The point is, anything that connects a million users together is not a "dedicated point-to-point link". It is more like an internet, and when one provides service over that internet, one is for all intents and purposes and ISP, or very much like one. Especially if one is doing all the last-mile connections and other companies want to get their data on your fiber. That is, after all, what people are trying to get cable companies to do -- open their pipes to other providers.
By your logic, a cable TV network (with no data services) is an ISP because they are running a backbone and providing content.
Yes, if a company is providing a service based on internet protocols and technology then they look very much like an ISP. You plug your internet connection into their hardware, access their servers, ditto.
Unfortunately for your argument here, cable TV networks are not distributing their standard video content using internet protocols, and one does not connect to a cable TV video server to get it. They use ATV standards to distribute their legacy products, which removes them from the ISP look-alike competition. Even for on-demand services where there may be an internet-based upstream connection to make the request for video, it is still delivered using ATV. At least that's how Comcast does it.
The big issue people aren't seeing is that that our infrastructure is much like Toll Roads. Private companies can charge as much as needed for a truck delivering a table as they see fit due to it being three axles. The biggest problem is most consumers don't have much choice into what services they have so they have to have their delivery truck go over that said toll road and that cost is either 1) factored into initial cost or 2) Required upon delivery. The issue itself isn't that the ISP's shouldn't throttle internet etc (which they need to be clear on with their customers which they are not and do secretly) it is most areas have Oligopolies where two to three ISPs are allowed to deploy in a specific area. Here in Montgomery the two companies discuss and split neighborhoods and all apartment complexes with a third option of ATT DSL (which is horrible in this area unless you have an office within 2500 feet of the ATT building.) Maybe if we could find better wireless solution, such as repeaters on the side of houses for phone, tv and internet and make it a requirement of the provider to keep the hardware up to date (one reason I rent my cable modem, it's been replaced three times with newer models over 2 1/2 years.) The only other solution would be like highways and the interstate, which are govt. controlled. With a congress that can't reform basic systems like Social Security and Taxes to today's standards and Judges who make insane decisions on technology they have no understanding of, I would hate to see the government step into an area like this at this point in time. So we're screwed.
You pretty much answered your own question in the summary.
That is the position the large ISPs are taking (on the surface, anyway): we have the only lines the customer can use because we "own" that area, they can't switch, it's us or nothing.
The way I look at it, however is that if I were to peer directly with Netflix and/or host a Netflix cache (even at my own expense in the data center), prospective subscribers (the ones who care, who are also most likely the ones will pay the most) are going to subscribe to my ISP over my competition because we can use it as a selling point: "Hey, your Netflix will never buffer and it will come through at HD quality" - and if we added the bonus that "Hey, Netflix traffic won't count towards your cap" (if a cap is imposed) the customer is going to think the service is the bees knees... then word of mouth happens.
And all of this I think makes yet another great case for open/common infrastructure (not even municipalities running their own ISPs but companies who own distribution networks simply making the infrastructure available and saying to ISPs "here it is, have at it").
Imagine if the existing providers were forced to split in to infra/retail divisions and sell access to the infra at fair and equal wholesale prices to any ISP, thus allowing companies like Google or Sonic.net or any of the other smaller ISPs all around the country to be able to offer services over any infrastructure they could get access to!
Imagine if Comcast, TWC, AT&T, Verizon and so on all of a sudden had to actually compete on quality/customer service etc?
The large ISPs would of course need to be really forced - kicking, screaming and probably throwing tantrums along the way - but I would love to see something like this in America.
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