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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!
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.
The FTC will only be able to enforce deceptive practices. If Comcast buries in their TOS that they can slow down connections as they please, it wonâ(TM)t be a violation.
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).
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.