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Netflix replies to Verizon cease and desist letter

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Re: Netflix replies to Verizon cease and desist letter

#321
post #263

Earlier quoted context omitted.

It's not credible to suppose that Comcast's network is built around equal exchange of traffic. The broadband connections they provide are wildly asymmetrical, often by an order of magnitude. And then there's this: http://arstechnica.com/information-technology/2014/04/bittor... "[W]hen we ask [ISPs] if we too would qualify for no-fee interconnect if we changed our service to upload as much data as we download—thus fil…

> It's not credible to suppose that Comcast's network is built around equal exchange of traffic. The broadband connections they provide are wildly asymmetrical, often by an order of magnitude. That's because around the time Comcast was building up their networks customer demand was wildly asymmetrical. People simply download far more than they upload and Comcast wisely dedicated more of it's bandwidth to downloads.

I got the data in the following paragraph from a talk on the subject at an Outerz0ne or maybe a Phreaknic years ago:

At the time all cable companies were were building up their data network, they were building that network over top of their existing video distribution network. That network was designed [ages prior to this point] to have tiny, tiny, upstream channels for use by system control and maintenance devices, and huge downstream channels to shove 100+ analog TV channels. Because it would have cost a metric shitload to replace all of that hardware, the cable companies were forced to give their data subscribers pretty large downstream links and relatively meager upstream links.[0]

Frankly, the nerds of the day (remember, this is the mid-to-late 1990's) would all have been running home servers, and would have been demanding a symmetric connection so that they would have a substantially cheaper alternative to ISDN.

(Note that nerds that remember those days consider asymmetric home Internet connections to have been more harmful than the Eternal September.)

[0] Note that this property is pretty meaningless in an HFC network where the cable company could run fiber directly to the home, but chooses not to. [See also ATT U-Verse.]

Re: Netflix replies to Verizon cease and desist letter

#322

Earlier quoted context omitted.

Healthcare is a highly imperfect market, and that's what makes it subject to either huge amounts of regulation, or outright external management. Consumers are very ill informed. Ccosts are not displayed, treatments options are not well defined, and knowing all of the options and understand them requires more time and education than is reasonable for most cases. Education is tricky, and honestly, I don't know any bett…

None of these attributes are incumbent in the nature of delivering health care. They're just things that are part of the system today . As you stated, in today's health care system, true costs are obscured. The exact problem is that nefarious corporate forces have removed most of the real market elements by adding layers of indirection (health insurance), which allows everyone in the industry to maximize their dollar…

I disagree about health insurance. I think that in the absence of health insurance, health care wouldn't work. Imagine getting in an accident, you're unconscious, you need emergency assistance. If the hospitals weren't reasonably sure you're insured and can pay for the services, they wouldn't be motivated to help you.

Most European countries offer health insurance, and total healthcare costs are much lower (compared to the GDP), so I don't think insurance is the problem (also, AFAIK most countries are bankrupt because of bad bank loans, falling GDP/taxes, and social payments (pensions), not health care costs).

The real problem is that doctors get paid when people are sick, so they are not incentivized to heal them, long-term (without regulation). If doctors were paid when the patients were healthy, you wouldn't have this problem. But I don't know how to implement that.

Re: Netflix replies to Verizon cease and desist letter

#323

Earlier quoted context omitted.

Excellent question. Anything that doesn't have a natural monopoly. I can say with certainty that the following should be socialized or delivered in non-profit ways: * Water * Sewer * Power * Internet * Healthcare * Fire * Police * Roads * Education (added per /u/CodeMage) Feel free to chime in if you can add anything I forgot.

It's interesting that you seem to view providing Internet access as a natural monopoly. While (from what I see as an outsider) it seems to be common in the US for households to have only one practical ISP available, that is certainly not the only model possible. For example, here in the UK, we have the formerly nationalised telephone network provider required to allow individual ISPs access to key parts of its infras…

What you describe is the definition of a natural monopoly. However, the monopoly comes from physical wires, not whatever flows over them. So, the infrastructure should be a public good (most infrastructure, really, not just wires, since it's more efficient and less wasteful to build a single network and keep it in excellent condition than to build multiple networks providing the same service at a lower quality), but whatever flows over it can be provided privately and competitively (also, each ISP would have to build it's own servers/routers, etc.)

Re: Netflix replies to Verizon cease and desist letter

#324

Earlier quoted context omitted.

>If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? I don't see why not. I think it might make more sense to think of it as streaming video, the category of goods, rather than Netflix, the company. So 35% of global internet traffic is people streaming videos. And who cares that it's video; fr…

To your last point, the problem with a subscription service (any subscription service) is that the more it's used, the less its profit margins. A company that is subscription based actually has an interest in their customers using the service as little as possible . It's completely backward (see: gyms, insurance, etc.) The only way to incentivize a company to provide the best service possible is to tie the use of the…

$2 per gigabyte is absolutely astronomical, the actual cost to major ISP's per gigabyte is literally measured in pennies. I used nearly 2 terabytes last month, so my new bill should be maybe $40 at most. I paid $63, and Comcast just raised me up to $85 3 days ago which I haven't called and bitched about yet. Anyone using <50 gb/month is getting bent over so incredibly hard by the ISPs it's honestly mindblowing.

Re: Netflix replies to Verizon cease and desist letter

#325
post #46

Awesome response to the C&D, via spokesman Jonathan Friedland: "This is about consumers not getting what they paid for from their broadband provider. We are trying to provide more transparency, just like we do with the ISP Speed Index, and Verizon is trying to shut down that discussion."

Playing Devil's advocate here for a second: If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? That is to say, if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business? I'm not taking the stance that this is correct, only querying as…

>> If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? That is to say, if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business?

Netflix isn't the driver, the Verizon customers who want to use netflix are the driver. They're paying Verizon to get them access to cool stuff like Netflix.

It sounds to me like those customers are not getting the service they expect.

Re: Netflix replies to Verizon cease and desist letter

#326
post #46

Awesome response to the C&D, via spokesman Jonathan Friedland: "This is about consumers not getting what they paid for from their broadband provider. We are trying to provide more transparency, just like we do with the ISP Speed Index, and Verizon is trying to shut down that discussion."

Playing Devil's advocate here for a second: If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? That is to say, if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business? I'm not taking the stance that this is correct, only querying as…

Some of these issues feel like a grey area to me, such as peering agreements. However, this move from Verizon felt very black and white. Thanks for trying to be Devil's advocate!

However, I feel that this issue is one of misrepresentation. Netflix wants Verizon to be a common carrier, and have its revenue increase linearly with the amount of data it transfers. In that case, Verizon would happily increase their revenue by providing actually faster Internet, because customers would pay more per day if they downloaded more per day, since they'd then pay a fixed amount per GigaBit.

On the other hand, I don't understand what Verizon wants to be. I feel like the type of company it wants to be is only sustainable in the very short run, highly dependent on other companies such as Netflix, and incapable of good PR because what clients want, and what they subscribe for, is impossible to deliver (the amount of data clients want to transfer is always above whatever they can promise to offer). That market positioning is tolerable for instant Wall Street growth, but it is detrimental to customers, to website owners, to peering partners, and to the long-term future of the company, were a reasonable competitor to enter the market.

I also feel there could be a middle ground, such as Verizon asking customers from every city to tip in for a massive city-wide network upgrade. That would be good for PR and customers would happily donate. It seems fitting, because from what I understand, the real money eater is a one-off upgrade; it doesn't increase maintenance costs much, if at all.

Re: Netflix replies to Verizon cease and desist letter

#327
post #275

Earlier quoted context omitted.

On the other hand, can you swear that Netflix is doing all that it can to minimize bandwidth? There's a conflict of interest: Netflix has a vested interested in provided lightly-compressed, very-high-resolution, bandwidth-hungry movies to its subscribers, especially if it obtains 100% free peering that it demands, as bandwidth would be free for them. On the other hand, ISPs are forced to upgrade network any time Netf…

> Should the ISPs be forced to upgrade their network every time? Come on, they have been doing this since the internet started. And in the beginning of internet some services were hugely popular as well. Keep in mind that upgrading the network costs money, but once the infrastructure is in place, moving bits is really cheap.

The difference is that now there is a single commercial player, with the ability of filling up whatever bandwidth the ISPs allocate for their customer base, with a single switch, and a commercial interest in increasing bandwidth (to improve quality to its subscribers).

If Verizon tripled its total bandwidth today, how long before Netflix begins raising the bitrate because "the Internet has evolved and we can now deliver bluray-quality streaming at the same $9/mo?". And then they fill up pipes again.

The whole issue here is cause by the impedance between the cost structure (pay by the gig transferred) and the price structure (pay by the peak speed, and I approximate the average gig transferred).

In a perfect utopic world where everybody was willing to pay by the gig transferred as that is the real cost factor, we wouldn't be here having this discussion.

> moving bits is really cheap.

Moving bits is cheap WITHIN the ISP network, but once you go outside they have a cost (depending on the peering agreements).

Re: Netflix replies to Verizon cease and desist letter

#328

Earlier quoted context omitted.

To your last point, the problem with a subscription service (any subscription service) is that the more it's used, the less its profit margins. A company that is subscription based actually has an interest in their customers using the service as little as possible . It's completely backward (see: gyms, insurance, etc.) The only way to incentivize a company to provide the best service possible is to tie the use of the…

$2 per gigabyte is absolutely astronomical, the actual cost to major ISP's per gigabyte is literally measured in pennies. I used nearly 2 terabytes last month, so my new bill should be maybe $40 at most. I paid $63, and Comcast just raised me up to $85 3 days ago which I haven't called and bitched about yet. Anyone using <50 gb/month is getting bent over so incredibly hard by the ISPs it's honestly mindblowing.

Country: Belgium - ISP: Telenet:

100 gb. / month (included) for 47,5 € monthly (65 $). Extra bandwidth @ 0,5 € (0,7 $) / GB, so it's an additional 1,5 € extra for your ISP, if you want to watch a netflix HD movie (2,3 GB).

Don't worry, i know i'm getting bend over :)

Re: Netflix replies to Verizon cease and desist letter

#329

Earlier quoted context omitted.

An ISP's job, as a private company, is to maximize shareholder value. The circuit consumers are sold is a "best-effort" connection in stark contrast to, say, a T1, which is a dedicated circuit. It's also very hard to prove that Verizon is throttling, versus, say, simply physically underprovisioning the connection. With respect to public money, I think you've hit the nail on the head. The crux of the Net Neutrality de…

> I'm constantly fascinated by the way folks consider socializing the telecom industry to be incredibly reasonable and socializing, say, the healthcare industry to be insanity. Can't I want both to be socialized?

We tried both in the UK. Conclusions, roughly, it works for health, not so well for telecoms. I think the best is some sort of hybrid.

Re: Netflix replies to Verizon cease and desist letter

#330
post #305

Earlier quoted context omitted.

On the other hand, can you swear that Netflix is doing all that it can to minimize bandwidth? There's a conflict of interest: Netflix has a vested interested in provided lightly-compressed, very-high-resolution, bandwidth-hungry movies to its subscribers, especially if it obtains 100% free peering that it demands, as bandwidth would be free for them. On the other hand, ISPs are forced to upgrade network any time Netf…

> can you swear that Netflix is doing all that it can to minimize bandwidth? This is an excellent point. Why doesn't NetFlix at very least offer the ability for their users to queue content for download / local caching? If customers had a slow Internet connection at least they could plan ahead to avoid suffering streaming problems. Ironically isn't streaming-only perhaps a violation of net neutrality? NetFlix artific…

Netflix does allow for caching at the ISP level.
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