Netflix Agrees to Pay Comcast to End Web Traffic Jam • Hacker News Board

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#81

Post by nailer » Sun, Feb 23, 2014, 6:37 PM UTC

lhnz wrote: post #47

jaggederest wrote: post #4

Wow, Netflix has decided to negotiate with the terrorists? I'm pretty disappointed. Edit: Having read more of the non-paywalled version, I have to say I think they're shooting themselves in the foot, even if Comcast was offering a better price than Cogent. It sets a terrible precedent, and gives Comcast the leverage to bump the price extortionately at the end of the deal.

You don't understand. This is the creation of an economic moat (a term coined by Warren Buffet.) The gatekeeper creates a toll and the tradesman agrees to pay the toll. This is an entry cost to new market players and therefore reduces competition. This toll may be increased as the biggest player (Netflix) grows in size and this benefits them, as eventually new startups have $1+ million startup costs and nobody is wil…

+1 Remember when online video was RealPlayer's website? Imagine if RealNetworks had paid Comcast, and a startup called Netflix wanted to show their product to Comcast's customers. There wouldn't be a Netflix.

Whoever has the market right now has it extended for a long time.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#82

Post by JshWright » Sun, Feb 23, 2014, 6:38 PM UTC

k-mcgrady wrote: post #57

cmircea wrote: post #50

Earlier quoted context omitted.

Not when their competitors will do the same. Heck, what competitors? Many areas only have Comcast service!

>> "Many areas only have Comcast service!" Do a lot of people in the US only have access to one or two ISP's?? If so why? I'm in a not particularly urban part of Ireland and I can choose between at least 5 ISP's, decent speeds, and a good variety of prices.

I have a choice between Time Warner's Road Runner cable based broadband, or a fairly lousy DSL provider.

I live in a middle/upper-middle class suburban area in upstate New York.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#83

Post by thematt » Sun, Feb 23, 2014, 6:38 PM UTC

lhnz wrote: post #47

jaggederest wrote: post #4

Wow, Netflix has decided to negotiate with the terrorists? I'm pretty disappointed. Edit: Having read more of the non-paywalled version, I have to say I think they're shooting themselves in the foot, even if Comcast was offering a better price than Cogent. It sets a terrible precedent, and gives Comcast the leverage to bump the price extortionately at the end of the deal.

You don't understand. This is the creation of an economic moat (a term coined by Warren Buffet.) The gatekeeper creates a toll and the tradesman agrees to pay the toll. This is an entry cost to new market players and therefore reduces competition. This toll may be increased as the biggest player (Netflix) grows in size and this benefits them, as eventually new startups have $1+ million startup costs and nobody is wil…

It's not a win-win, since Comcast itself is a competitor to Netflix. You only have one side paying the tax.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#84

Post by jaydz » Sun, Feb 23, 2014, 6:39 PM UTC

lhnz wrote: post #47

jaggederest wrote: post #4

Wow, Netflix has decided to negotiate with the terrorists? I'm pretty disappointed. Edit: Having read more of the non-paywalled version, I have to say I think they're shooting themselves in the foot, even if Comcast was offering a better price than Cogent. It sets a terrible precedent, and gives Comcast the leverage to bump the price extortionately at the end of the deal.

You don't understand. This is the creation of an economic moat (a term coined by Warren Buffet.) The gatekeeper creates a toll and the tradesman agrees to pay the toll. This is an entry cost to new market players and therefore reduces competition. This toll may be increased as the biggest player (Netflix) grows in size and this benefits them, as eventually new startups have $1+ million startup costs and nobody is wil…

If that's the case we really should reconsider our support for netflix. Cancel your subscription.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#85

Post by cmircea » Sun, Feb 23, 2014, 6:39 PM UTC

k-mcgrady wrote: post #57

cmircea wrote: post #50

Earlier quoted context omitted.

Not when their competitors will do the same. Heck, what competitors? Many areas only have Comcast service!

>> "Many areas only have Comcast service!" Do a lot of people in the US only have access to one or two ISP's?? If so why? I'm in a not particularly urban part of Ireland and I can choose between at least 5 ISP's, decent speeds, and a good variety of prices.

You have to remember that, compared to the US, Ireland is tiny. The majority of the US population does not live in large urban areas, who while New York for example might have lots of choices, Spokane probably doesn't.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#86

Post by brubaker » Sun, Feb 23, 2014, 6:39 PM UTC

k-mcgrady wrote: post #57

cmircea wrote: post #50

Earlier quoted context omitted.

Not when their competitors will do the same. Heck, what competitors? Many areas only have Comcast service!

>> "Many areas only have Comcast service!" Do a lot of people in the US only have access to one or two ISP's?? If so why? I'm in a not particularly urban part of Ireland and I can choose between at least 5 ISP's, decent speeds, and a good variety of prices.

The overwhelming majority of the US is served by 1-2 ISPs. Generally equally shitty options.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#87

Post by smutticus » Sun, Feb 23, 2014, 6:39 PM UTC

aleem wrote: post #44

scelerat wrote: post #20

And so the precedent is set. This is the direction I see things going: For $70 a month from Comcast you can get Amazon, Google, and Facebook. For only $10 more a month you can add Netflix and Spotify. Want Pandora? Sorry, you'll have to switch to AT&T for that. The broadband providers are used to this type of packaged service given their history as cable television providers. It's how they make their money beyond pro…

That is not going to happen. The onus is not on the consumer, it's on the service provider. The service provider may transfer the costs onto the consumer but Comcast won't directly charge the consumers a premium. That would be a bad move and Comcast would lose out its customers to competitors.

The reason Comcast would rather have Netflix pay than pass those costs to consumers is because they don't want to make net neutrality any more salient for consumers. If Netflix pays Comcast then it goes mostly unnoticed by the average person. If people have to start paying then the people screaming for net neutrality will start to scream louder, and Comcast really does not want that. It's not about competition with other ISPs, because as other posters have pointed out, Comcast is usually the only ISP in many markets.

Comcast worries about the FCC and Congress, not its competitors.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#88

Post by blazespin » Sun, Feb 23, 2014, 6:39 PM UTC

aleem wrote: post #68

RyanZAG wrote: post #16

This is actually good for Netflix and terrible for any competition. While Netflix probably has to hand over a bit of money, they are in a much better position to do so than any of their competitors as they're the biggest. In effect this creates a massive entry barrier into the video streaming market. You will now likely need to set up a massive infrastructure and pay massive bribes to various internet providers to be…

The same thought came to my mind, a moat around Netflix's current business. However, I don't think that's quite how it will play out. Comcast won't charge new streaming providers from the get go. That will stunt its own business opportunities. Instead it will prefer to let them grow to the point where they can claim network congestion issues. At that point it has a "justifiable claim" as well as more negotiating leve…

Yeah, but nobody is going to go into the streaming biz because of this. Netflix is scaring off would be competitors.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#89

Post by wmf » Sun, Feb 23, 2014, 6:40 PM UTC

cwisecarver wrote: post #6

I thought Comcast had to follow the net neutrality rules until 2018 regardless of that court decision a few weeks ago... Is this NFLX caving because nobody is enforcing the rules Comcast agreed to? (Edited for englishy)

The net neutrality rules were written to correct/prevent the abuses that were discovered around 2005. Since then ISPs have invented new loopholes (like targeted non-upgrading) that technically aren't covered by the old net neutrality rules.

Re: Netflix Agrees to Pay Comcast to End Web Traffic Jam

#90

Post by __pThrow » Sun, Feb 23, 2014, 6:40 PM UTC

k-mcgrady wrote: post #57

cmircea wrote: post #50

Earlier quoted context omitted.

Not when their competitors will do the same. Heck, what competitors? Many areas only have Comcast service!

>> "Many areas only have Comcast service!" Do a lot of people in the US only have access to one or two ISP's?? If so why? I'm in a not particularly urban part of Ireland and I can choose between at least 5 ISP's, decent speeds, and a good variety of prices.

The last mile. (http://en.wikipedia.org/wiki/Last_mile)

Most places are wired with one phone line, and one cable line. That phone line is generally owned by one specific phone company, and that cable line is generally owned by one specific cable provider.

So those are the choices of ISP: you can choose cable service or dsl.

For a few years the last mile over phone had to be shared with other IP providers, so you could choose between a) one cable company, or b) a few IP over DSL ISPs, but that ended sometime back.

There is also satellite providers, but they usually, I believe make a deal with your phone company, wireless, which is expensive, and fiber, which to my understanding is still just an upgrade from the over cable company.

How is the last mile provided in Ireland? And what are your choices of ISPs?