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Netflix Agrees to Pay Comcast to End Web Traffic Jam

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

#121

Post by toast0 »

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…

This sounds like standard paid peering; there's nothing non-competitive here.

If you're a small provider, you tend to buy transit from one or a few providers, and pay per bit in whichever direction has the most traffic.

If you're bigger, maybe you can setup peering. If you have relatively balanced flows, and meet other qualifications, you can usually get free (settlement free) peering. If your flows aren't balanced, then the tradition is that whoever is sending more pays. If the networks you're establishing paid peering with are cheaper than your transit provider (usually the case), then peering is still a win for you, and a win for the other network.

If Netflix wants to get settlement free peering with Comcast, they need to balance their traffic to Comcast (maybe partner with a backup service, or web crawler)

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

#122

Post by gonzo »

JohnTHaller wrote: post #95
steveplace wrote: post #75

Earlier quoted context omitted.

run a search at broadbandnow.com, see what you get

Yeah, my building here in NYC, I can get Time Warner or DSL (Verizon or from a reseller). That's it. Lots of us are stuck with 1 or 2 crappy options. I have overpriced Time Warner and a Verizon hotspot as a backup because the TW cable connection goes down about once a month. The other option is DSL which is too slow to do work and was down a week of my 30 day trial when I checked it out years back. Keep in mind that…

I'm in Austin, TX.

We have two FTTH providers (AT&T, Grande). Grande offers 1Gbps now, AT&T is 300Mbps now, 1Gbps this summer. Time Warner offers 300Mbps now (DOCSIS).

Google fiber is being deployed this year (1Gbps).

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

#124

Post by Dystopian »

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…

I'd have to string strongly with this.

Everything we know about Netflix is that they're a data driven company. Chances are it's far more likely they have seen viewing rates drop for Comcast customers who were affected by the slow-down.

If a typical end-user sees their internet working normally, bu see slow-downs selectively to streaming to sites like Netflix, chances are they're going to wrongly attribute the slow-down to the service and not their internet connection.

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

#125

Post by cdash »

smutticus wrote: post #87
aleem wrote: post #44

Earlier quoted context omitted.

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 o…

Pass on the costs? Isn't this supposed to lower costs for Comcast even without getting paid by Netflix? If so you mean pass on the more profit they want.

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

#128

Post by danielrhodes »

pcurve wrote: post #65

Given Netflix and Youtube account for rougly 50% of peak time traffic, I wonder if Google will also follow suit. I'm all for net neutrality, but I think Netflix should've been paying some usage fee into a communal fund that is off-limit to ISPs, but can be used to improve broadband quality for everyone.

Google owns a lot of backbone so they can do a peering agreement with Comcast/Level 3 which would be mutually beneficial. Netflix has nothing to offer in terms of peering, so their attempt at getting similar terms is just a negotiating tactic.

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

#129

Post by __pThrow »

k-mcgrady wrote: post #105
__pThrow wrote: post #90

Earlier quoted context omitted.

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 co…

>> "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." That seems to be where things differ. My phone line is owned by BT but I can still order internet through a different company. I pay that company an extra £10-15 per month for line rental (so I guess BT, even though…

Yeah, we had that for a few years during the 90s. I forget when we lost that, but it wasn't good.

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

#130

Post by lhnz »

thematt wrote: post #83
lhnz wrote: post #47

Earlier quoted context omitted.

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.

They reduce the cost of having to fight new market players, which is actually far more difficult to control. It's now just a question of what leverage they will have to play against Comcast which is potentially a much easier game.

Generally the bigger you are, the more you will want to avoid volatility as big tends towards fragile - a big company will prefer static contractual obligations to another big company over being attacked from all sides.

(I am unsure however how this game plays out in the later stages if they lose leverage and entry costs increase to the point that it begins to suffocate the market.)

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