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'Netflix and Alphabet Will Need To Become ISPs, Fast' (techcrunch.com)
Following the recent official repeal of net neutrality and approval of AT&T's acquisition of Time Warner, an anonymous reader shares an excerpt from a report via TechCrunch, written by Danny Crichton. Crichton discusses the options Alphabet, Netflix and other video streaming services have on how to respond: For Alphabet, that will likely mean a redoubling of its commitment to Google Fiber. That service has been trumpeted since its debut, but has faced cutbacks in recent years in order to scale back its original ambitions. That has meant that cities like Atlanta, which have held out for the promise of cheap and reliable gigabit bandwidth, have been left in something of a lurch. Ultimately, Alphabet's strategic advantage against Comcast, AT&T and other massive ISPs is going to rest on a sort of mutually assured destruction. If Comcast throttles YouTube, then Alphabet can propose launching in a critical (read: lucrative) Comcast market. Further investment in Fiber, Project Fi or perhaps a 5G-centered wireless strategy will be required to give it to the leverage to bring those negotiations to a better outcome.
For Netflix, it is going to have to get into the connectivity game one way or the other. Contracts with carriers like Comcast and AT&T are going to be more challenging to negotiate in light of today's ruling and the additional power they have over throttling. Netflix does have some must-see shows, which gives it a bit of leverage, but so do the ISPs. They are going to have to do an end-run around the distributors to give them similar leverage to what Alphabet has up its sleeve. One interesting dynamic I could see forthcoming would be Alphabet creating strategic partnerships with companies like Netflix, Twitch and others to negotiate as a collective against ISPs. While all these services are at some level competitors, they also face an existential threat from these new, vertically merged ISPs. That might be the best of all worlds given the shit sandwich we have all been handed this week.
For Netflix, it is going to have to get into the connectivity game one way or the other. Contracts with carriers like Comcast and AT&T are going to be more challenging to negotiate in light of today's ruling and the additional power they have over throttling. Netflix does have some must-see shows, which gives it a bit of leverage, but so do the ISPs. They are going to have to do an end-run around the distributors to give them similar leverage to what Alphabet has up its sleeve. One interesting dynamic I could see forthcoming would be Alphabet creating strategic partnerships with companies like Netflix, Twitch and others to negotiate as a collective against ISPs. While all these services are at some level competitors, they also face an existential threat from these new, vertically merged ISPs. That might be the best of all worlds given the shit sandwich we have all been handed this week.
Haven't they learned the lesson of Modern American Capitalism(TM) yet? Crikey, for a tenth of the money they'd spend to start an ISP, they could just buy a few carefully chosen politicians and - voila!
Net Neutrality isn't dead, its just not being reinforced by the FCC, the FTC now owns it.
FTC will have to handle bad throttling practices by mega corps of Comcast and ATT.
Comcast offers unlimited for 50 extra a month, so they can cover that loss in the NFL/ESPN sports ball licenses...
Binge netflix all you want. I'm too busy watching twitch.
Because not every company that will get shafted by greedy ISPs will be able to just roll out their own nation-wide fiber network. Christ, spend 3 seconds thinking before you type.
okay, say Alphabet does built out fiber. Now there's 3 big ISPs. What does Netflix do, if Alphabet doesn't partner with them? What does Hulu do? Crunchyroll? The next streaming startup, who didn't exist when Alphabet was signing up partners?
Oh, you sweet summer child. Bless your heart.
You are welcome on my lawn.
If Comcast throttles YouTube, then Alphabet can propose launching in a critical (read: lucrative) Comcast market.
You mean like Google did to Microsoft Office with Google Docs? Years later, that's still costing MS big-time.. way more than they'll ever make from Bing. Didn't cost Google much, but it sure put MS on notice.
There's lots more where that came from.
Comcast was throttling BitTorrent and lying about it to its customers before the FCC regulations. Comcast also intentionally let their interconnections get saturated to slow down Netflix to get more money. Weâ(TM)ve seen it happen before, it will happen again.
People act like YouTube and Netflix don't already pay ludicrous amounts for their hosting. Any deals between them and an ISP is double dipping.
Seems to me that we, the consumer suckers, are the ones getting double-dipped. I was pretty clearly under the impression that I already pay for high-speed internet access, including YouTube, Netflix, ...
You mean the customers will *complain*. Revolting would probably mean something like cancel their service. But with most places in the US with just 1 or 2 options for high-bandwidth ISPs, actually hitting these ISPs where it hurts (cancel service and monthly bills) means Denial of Service to the customer.
Hence why Title II regulations really ought to still apply, and vertical integration should NOT be allowed. (You can either sell an internet pipe, content/services, but NOT BOTH). It's such a blatent conflict of interest.
(Also note historically, like 20 years ago, Net Neutrality rules didn't have to have as much meat in them because most ISPs didn't own the last mile, the phone company did, so ISPs could compete, and the phone company played it's TitleII card (we just pass bits, so we don't look at the traffic at all, and also not liable!).
Now the ISPs, telcos, content providers and distribution systems are all owned by the same entity.... how is this good for the consumer and where does "market forces" actually play when dealing with companies with federally granted monopoly power (and using that power to extend their influence in other markets... vertically).
Um...they were totally NOT fine guy who apparently shills for the cable industry. How do you imagine this neutrality bill got passed to begin with? Multiple carriers were fined for throttling and Netflix paid an "undisclosed amount" to Comcast and their internet magically wasn't crippled anymore. Please go die in a lake of fire.
Indeed - that's the 'wherever it can' part.
Societies can sometimes push back against greed - as outrageous as it might seem to some here in the States.
We're missing half of the entire equation here - the whole 'wow, we should really give the public interest some weight in our policy debate' side of the equation.
Ryan Fenton
We know how AT&T handles this sort of thing with TV networks.
Next week, you'll go to Netflix.com and they'll start showing modal popups saying AT&T has decided to deny access to Netflix in a few weeks, and to call AT&T and let them know how you feel.
Three weeks later, you'll go to Netflix.com and get a certificate error: bad CNAME. Users who are idiots enough to click through the errors will see a marketing-crafted propaganda video about how Netflix has chosen not to share their content anymore with AT&T subscribers, and to call Netflix and let them know how you feel.
Invariably, this will occur right when some major season finale is supposed to air.
The Internet should be a utility. It should just be metered and paid for by the consumers, who should be able to freely change their caps. Who cares how they use the bandwidth they pay for?
Top of the rankings according to Speedtest Global Index. Slightly rub it in your face though as the US is 42nd. I wonder how many people with dial up do a speed test though? Do they have the bandwidth to do one? Could they be bothered?
I reserve the write to mangle english.
Net neutrality isnt about Netflix and Alphabet. Bandwidth throttling and companies having to pay for a "premium channel" to their customers doesn't hurt them, they will pay and carry on: this extra fee is an annoyance, but it actually helps protect them from competing startups without deep pockets. Good luck launching your music or video streaming service if the connection to your customers is going to be shit by design.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Oh please. Any ISP that does not deliver Netflix well will continue to blame it on Netflix and comfortably expect 99% of their customers to believe it without so much as blinking an eye.
Um...they were totally NOT fine guy who apparently shills for the cable industry. How do you imagine this neutrality bill got passed to begin with? Multiple carriers were fined for throttling and Netflix paid an "undisclosed amount" to Comcast and their internet magically wasn't crippled anymore. Please go die in a lake of fire.
Google 2017 net income: $12+ billion
Netflix 2017 net income: $500 million
I'm pretty sure they will manage
Everyone is worried that ISPs will start charging more money for faster content. So, Netflix should beat them to the punch. Netflix should create NIPP (Netflix ISP Partner Program), where partners pledge to not charge customers more money for decent bandwidth, and that they will not charge Netflix a premium transit fee to keep from slowing them down. ISPs that don't sign up for NIPP get videos to their IP space automatically downgraded to a lower quality. If it is impossible to get full resolution videos on Comcast, you can bet I'll be moving to AT&T Fiber, or Sonic, or somebody who is partnered with Netflix.
-- This sig is only a test. If this were a real sig it would say something witty. --
This merger is only the beginning of the end. Between this, Net Neutrality getting canned and the EU's broken mandates regarding the internet......
Yeah, it was fun while it lasted.
Now we'll have AT&T Net, Comcast Net, Verizon Net, and you can bet they absolutely do not want to talk to each other, or have their customers streaming content from their competitors.
Wish I could say I'm surprised, but I'm not, the ground work began for this with NN getting kicked to the curb. Now that the gloves are off, these big conglomerates can strangle the internet however they please.
The reason we need net neutrality to begin with is the telcos and cablecos leveraged government granted monopolies for their telephone/cable services and used them for their new internet service. They successfully prevented new ISPs from entering their markets by barring use of the infrastructure already in place and the new ISPs were barred from running their own by said government mandate. Had the government repealed the mandate to allow other entities to negotiate running their own cable perhaps your argument would be valid. But since the mandate is still in place and existing ISP companies are spending billions lobbying state governments to keep any competition out we end up here with content providers also being the gatekeepers to subscribers. We've already seen the result. Netflix offered to save AT&T millions of dollars by placing content delivery network (CDN) servers inside AT&T's network. This would have alleviated hundreds of terabytes of traffic through the backbone. AT&T refused for years and Netflix subscribers on AT&T (Verizon too) got buffering signals frequently. Then when enough AT&T customers complained about it AT&T told Netflix they could alleviate the buffering by paying AT&T a toll! Why? Because AT&T has their own PPV content they want to sell and Netflix is a competitor to that service. The Time Warner acquisition will only increase the animosity to third party content providers. AT&T's only real competition to their ISP is Comcast or Charter (Spectrum) depending on what market it is. Alphabet and any other company looking to become an ISP still has an uphill battle in the majority of US states with local municipalities going to war against state government to get permission to let them in.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
And if it weren't for regulatory capture at the local level eliminating competition that wouldn't even be an issue.
Move?
I typically refrain from using explicatives and ad hominems on Slashdot but how fucking stupid are you? Are you literally a Russian troll or just acting like one? If moving was an option for everyone, we wouldn't be in this shit sandwich because people would just congregate in areas with more than one ISP choice and ISPs would have recognized years ago monopolies don't work.
And yet, monopolies do work, you shmuck, and here we are.
No, moving is not an option. Most people don't want to pick up and move just because their ISP is being a shitstain. There are typically bigger priorities than that. No, we will not guaranteed get a third ISP. And even if we did, the effect is making the entry to market for websites that much higher. Startups now have to start or join an ISP? Are you fucking kidding me?
AT&T buying Time Warner is one of the biggest shit sandwiches in the history of the Internet, aside from losing the battle on Net Neutrality. We're going from 2 ISPs in some areas to 1. At best we'll go back to 2. At worst, everyone involved, actors good and bad, now recognizes the cost of business in the new age: buddy up with an ISP or don't fucking bother trying.
If the Department of Justice was in any sort of functional order right now, this deal would have been laughed at on day 1 or the two companies involved would never have tried.
The most effective option giving the longest benefits would actually be eliminating regulatory capture at the state level.
One minor correct, AT&T is not buying Time Warner the cable company. That already got bought by Charter and combined to form Spectrum. AT&T is buying Time Warner the content company (CNN, HBO, Warner Bros, etc.)
Look, Net Neutrality is the Law of the Land in CA, OR, WA, and a few other states.
They can just walk away from the unprofitable other states and let you freeze in the net dark.
All the profit is in the West.
-- Tigger warning: This post may contain tiggers! --
On the other hand, there might be a battle between AT&T, Comcast, Verizon and other carriers to convince customers that they are better ISPs, by not screwing with third party content.
No.
What will happen is AT&T, Comcast, Verizon, and Mediacomm will collude to ensure that everyone gets the same shitty Netflix experience across the board. We'll have nowhere to go, so we'll give up and keep paying for shitty service.
The Low Earth Orbit satellite companies (StarLink, Boeing, and I think one other) will likely be our only hope of getting decent Internet service on a broad scale. Alphabet seems to have already given up on being a terrestrial ISP, and no one else seems to care to fill the gap.
Fine. Let small companies either pay for their bandwidth or stop using so much. Let their investors raise more money or go out of business. If I as a consumer wish to have their content, I can choose to pay for it. What I DO NOT want is a socialist system which FORCES ME to pay for their business model.
That which is free is wasted. Should be taught in 3rd grade or at least econ 101.
Socialism is not forcing competition or having reasonable rules such as getting what you pay for.
I live in a country with net neutrality, it means I pay for X amount of data, 250 GBs in my case. How I use that data is up to me. I can watch cat videos all day from joes_cat_video.com or Netflix. Either way costs the same for both me and my ISP.
Why does it cost Americans more to stream 720 Netflix then the 8k video from joes?
https://en.wikipedia.org/wiki/Inverted_totalitarianism
Because to you income = profit? It does not. It's income - expenses, same as always. If you increase expenses (because Comcast or Disney wants more $$$) then the only way to be profitable is to raise income (fees).
While Disney arguably has a right to fees (very arguably with their quest for permanent copyright extensions) Comcast only owns the pipes....but not paying them off would have destroyed their business so Netflix paid up. That's why your monthly fee is $14 and not $11 like it was prior to this. This bullcrap will now extend to every other major internet provider because if you can legally run a toll bridge, why wouldn't you want your cut? Netflix won't absorb that cost, consumers of Netflix will.
$50 a month what world do you live in?? Comcast is $150 for basic TV and Internet. $275 for TV/Internet/Phone/Alarm. Then if you want good channels $10 here $20 there and so on. Oh and they are the only ISP in town. Word from their employees on Facebook have let us know that in a meeting they had yesterday, Comcast is going to add 30% in our area now that they can. If you don't like it they will take the 30% off and drop you to 10Mb/3Mb. You now have to pay for the fast lane. Sickens me that Net Neutrality is gone!! The prices were already TOO HIGH!
If it's a natural monopoly, how come I have four different hard-wired ISP options (Cable, two fiber offerings, one DSL) at my suburban house? Did someone forget to send them all the memo?
It's typically only a monopoly if at some point the government prevented any competition to allow their favored choice to have all the customers. Nothing "natural" about that.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
Norway no longer has POTS/PSTN. If you want an analog telephone line, you'll have to get a SIP to Analog box. Some providers will even provide G.711 if you need the full bandwidth.
When Norway privatized the national telephone company back in 1999 or something like that, part of the agreement was that any service they provide to one Norwegian house they have to provide to 95% of Norwegian households. So there are 5% which were a little screwed. Then companies in those areas popped up pretty quick. So, companies like Eltele can provide Internet access to a Sami hut in the middle of Finnmark.
Also, at this time, almost all electric companies in Norway are also fiber delivery companies, more or less every house in Norway that has electricity either already has access to fiber or will eventually have access to fiber as there has be major investments in upgrading the power grid which also means upgrading the fiber.
My power company rents space in my condo complex for housing their switches. So I'm precisely 51 meters of fiber from the central. In our basement, we have multiple 100Gb/s links that are scheduled for upgrade to 400Gb/s soon. I only pay for 40Mb/s because why pay for more? But with a phone call I can get gigabit. Within a week, I could have multiple 10Gb/s uplinks.
Is dial up still available in the U.S. ?
A monopoly literally means one single option, hence "mono" in the word.
Every business has barriers to entry. Typically, regulatory capture by industry incumbents (which is what happens when a regulator like the FCC micro-manages what's allowed) increases barriers to entry in that industry. Comcast or whatever can afford to comply with whatever paperwork/weird rules the FCC comes up with. A single-guy sharing bandwidth with his neighbors can't hope to.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
Strange that you have no cpmpetition in the US and here I amn living in the communist country (accoding to stuped Mericans) of Europe and have the option of several companies with several offers at several speeds.
I have real unlimeted and pay 40 EUR or so for 100M down and 30M up. There are cheaper and faster ones, but they will not be as unlimited.
And I live in one of the more expensive ones with not that many competition as others.
Stuped communists who do things for the people by the people.
Don't fight for your country, if your country does not fight for you.
1) As you mention yourself, a congested pipe is not the same as throttling. The idea that a startup will have the same access to a consumer as Youtube under NN is simply not true.
This is a double edged sword and why throttling is very different from a congested pipe. As an ISP such as Comcast grows it's likely to have pipes that fit into one of three categories.
In a number of these occasion the route filters will be set to only allow traffic over a private peering link and as such when that gets congested a startup will get a better deal from coming over the Public peering or transit.
Youtube has (or can have) a private pipe with with every ISP on every internet exchange in the world. A startup may accomplish that in one or two cities but will rely on shared pipes and/or 3rd-party CDN's everywhere else.
A point you highlight above is quite different from NN. The point above just is a business case, the only reason the startup does not have the private pipes is the cost. And for that case YouTube does not have pipes to every ISP because some ISP's are too small for them to bother with. Again this is a business issue.
Or is the argument one of "If YouTube has a private peering agreement with one ISP it should have a private peering agreement with all ISP's everywhere on the globe" ? After all this is a Cost / Reward / Control question.
2) What does it accomplish exactly for the consumer? Suppose NN provides equal access to various video services (not true, see above)
Sorry but I don't agree with this one. As a startup you typically do not either the funds or the users to justify the global presence (would you require them to have content in every language). In many cases for the initial phases of a startup you may not even have the finances or user demand for a CDN. Again this is a StartUp vs Established business in any field. A corner store cannot compete directly with a chain supermarket in terms of discounts from suppliers, how is that a NN question. I apply the same logic.
- what prevents these video services from becoming the very gatekeepers that we didn't want ISP's to be? Does a videomaker have any chance if Youtube and Netflix refuse his videos? Don't we already see Youtubers complain that there's no viable alternative?
Is FaceBook attracting the number of users it has a NN question? Are you saying that your local cinema should be forced to show any video a local unskilled wannabe movie maker produces ?
I think lumping YouTube and Netflix into the same statement isn't the right thing argument to make. Netflix is a subscription video service where YouTube is there to host advertising (with user generated content there to attract the eyeballs for the advertisers).
YouTube has been trying to put itself in a common carrier position, so yes it should either allow anyone to post anything (legal) or it should loose the DMCA Safe Harbour status and similar legal protections it currently enjoys.
How about AppStores? So NN now gives you full access to the consumer's pipe. But Apple and Google don't allow your app in their store for whatever reason.
Again not a
I WISH I had 4. I've got 2. ATT (6mb DSL) or Comcast (not much better and I have NEVER had good dealings with Comcast). Same thing in the place I am living now and the place I just left just 7 miles away. BOTH within city limits. I know other people that have only 1 choice, Comcast. This being the 3rd largest city in the state.
Last Mile isn't a hard situation to understand. If Crapcast already has your area wired for cable, it means it has a huge edge over any would-be competitor as they can go on making money with their own wires while the competitor has to make a massive investment that wont pay off for years, at best. The other part your ignoring is the fact that market consolidation will naturally lead to buyouts and mergers, leaving you with less than a handfull of players in the end, anyway.
I gave you net income numbers.
By definition a positive net income is a profit, and these two companies are reporting large profits.