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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.
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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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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.
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.
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.
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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