Comcast response to Netflix
corporate.comcast.com
corporate.comcast.com
I'm sorry Comcast but if you can't fullfil our agreement (Internet access) then you aren't an ISP in my mind. I pay you for an Internet connection, not for the ability to send packets at someone else -- they get to respond to me as well, that's part of our deal.
What Comcast is being chastised for, the thing that forced Netflix to transit with them directly, is being paid by its customers to connect to the internet, then refusing to use that money to buy a pipe large enough to deliver that. It wasn't Netflix that wasn't buying a large enough pipe to send its own bits. If Comcast had resolved its disputes with Cogent and widened the pipe to meet the customer demand it's being paid by those customers to meet, I'm sure Netflix would've been happy to stick with its ISP.
It's just like the telephone network of yore, no single trunk was ever capacitied to mothers day call traffic - there were reroutes, and more than one path to any large point, so you'd get a lower quality of service, but the traffic would still get thru.
I am fine with getting less than my maximum speed; I understand that the connection is shared and that my neighbors' service can interfere with mine. TCP can deal with congestion. What grinds my gears is that ISPs are not content to sell me a maximum speed; they want to oversubscribe, then claim that they are selling burst service, then call it "unlimited super-awesome Internet!! 15Mbps!!" then penalize customers who fail to limit their use of the supposedly unlimited service.
google has similar issues with some EU providers in particular in france, for youtube.
traditionally the ISP pays to upgrade the pipes for the content that is provided by a third party (ie ISP pays for youtube, netflix traffic). ie the one whos downloading pays for upgrading pipes.
thats where some ISPs (comcast too then i guess?) generally cringe: this way of dividing costs was ok 10 years ago, but not anymore: streaming is 90% of their traffic and its not sustainable.
So it's more like saying "downloading is 90% of their traffic and its not sustainable."
If you're trying to optimize for efficient use of limited bandwidth, unicast transferring of identical content to many many people is pretty wasteful. I think Netflix would argue that network links should be getting bigger and fatter to render the point moot, but given the streams are also getting bigger (we didn't always stream 720p everywhere, did we?) that would certainly take a lot more investment than what's happening now.
The problem is, what happens when you connect a new customer. Well, simple :
1) the income of the ISP increases by some fixed amount
2) the cost of providing this connection increases by n+1 (the number of existing customers)
So here's the catch
np needs to pay for n(n-1)c pipes
Where n is the number of customers on the internet. P is the average income per customer and c is the cost of a pipe that will sustain one customer.
Needless to say, this won't work.
No retail ISP on this planet offers 1:1 ratio like that to its general subscribers.
You can certainly buy uncontended service, but it will start at several hundred dollars per month for about 2 Mbps.
If your hosting company has paid Comcast for 100Mbps transit, then Comcast should honor that agreement with your hosting company. Your uplink to your hosting provider is completely irrelevant as far as Comcast is concerned.
If you're using a different transit provider (e.g., Cogent), then Cogent and Comcast will have a mutual peering agreement that accounts for imbalances in transfer. These details are very complicated, proprietary, and you should never need to care about them. That's the whole point of the internet; you connect to "the internet" and can treat it as a homogeneous network, whereas in reality it is actually a bunch of mutually-peered subnetworks.
Yeah that's what all these disputes are coming down to. I can brand myself an ISP and sell someone a 10G uplink. That doesn't magically make anyone have to peer with me. Yes it's complicated and yes it comes down to who can throw weight around.
If the ISP is Comcast, then when you pay for that 1Gbps uplink, you are paying Comcast and you have a right to expect that your packets will be delivered at that rate.
If the ISP is a peer of Comcast, then it seems like when you pay that ISP, you ought to know the exact details of the agreements and bandwidth arrangements between the ISP and Comcast, and both parties ought to abide by that contract. I don't know enough details in this case to know whether that's what happened.
Fact: "Comcast spent the most money of any organization in support of the Stop Online Piracy and PROTECT IP bills, spending roughly $5 million to lobby for their passage."
http://en.wikipedia.org/wiki/Comcast#Lobbying_and_electoral_...
NetFlix argument: Comcast is using its bully position to extra a toll from service providers and service subscribers. A Comcast-TwC merger would make it worse for Netflix and everyone else.
Comcast argument: Netflix is wrong. We bully all the content providers, not just Netflix. So, er, yeah, they're wrong.
Really it's Comcast's customers who are using Netflix and those customers are paying them for an X Mbps connection. I don't see what difference it makes if the data comes from Netflix or some other source. It sounds like what Comcast really wants are data caps for their users but those don't do well with consumers. Instead they're targeting the largest content suppliers.
With this logic, why should anyone have to pay for hosting bandwidth?
Because you still have to get the traffic from the datacenter to the peering point. That's what you're buying when you pay for hosting bandwidth -- transit. You're paying somebody to get the traffic to all the networks in the whole world.
The last mile provider isn't providing transit. You peer with them at their facility. The connection from their customers to their facility was paid for by their customers. The connection from their facility to yours is provided by you (or by the actual transit provider you paid). So what would you be paying them for?
It's nothing but a monopoly rent you have to pay because there is no other way to reach their customers.
So if Netflix adds
setInterval('EqualizeBandwidth',1000/24) function EqualizeBandwidth(){ $.post('netflix.com/dosbox', {data:randomLongStringEqualtoVideoFrame+1}); }
Then comcast will pay them. (And most subscribers will be fine if they only watch < 31 movies a month given an 8gb movie.)
But bonus if netflix causes every one of their customers to hit the 250gb cap and therefore hate comcast. Any politician that has family trying to watch netflix would complain of overages then and shut comcast out.
This is exactly the issue. The ISPs got themselves into a corner. They created a market of unlimited plans and can't back out from that, so can't charge more to their own heavy users who are the cause of the need for network upgrades. Since a lot of that heavy use is of paid services, they figure they can go after that money pool instead.
They get raked over the coals (and rightly so, IMHO), by people pointing out that they already pay for their bandwidth, so why should they pay twice (once through AT&T and once through the costs Netflix would have to pass through to them).
It really seems like AT&T and Comcast are complaining that people are actually starting to demand the full service that they pay for. It is really hard to take that argument seriously.
I thought it was interesting that they have more legal content than actual content on the post.
Presumably "0 comments" is simply the number of comments that portray Comcast in a reasonable light?
Yeah, I love the fact that the boilerplate disclaimers are well over twice the length of the actual post.
http://www.attpublicpolicy.com/consumers-2/who-should-pay-fo...
Particularly because the comments on the AT&T page by its own customers completely demolish the argument.
These ISPs are seriously arguing that the cost to upgrade their own networks to deliver the content their own customers are requesting should fall on the other side of the link. They're arguing this apparently even after Netflix/Akamai/etc have build CDNs to deliver the content right next to their subscribers. They're not even having to build a backbone.
* Netflix cannot make money if individual Internet users cannot connect to Netflix and stream their movies. Netflix brings in a lot of revenue from its customers, and even after the cost of its own Internet connection manages to turn a handsome profit.
* ISPs stand between Netflix and their users. Many ISPs, such as Comcast, are also involved in the business of selling subscriptions to TV channels (usually with plans that require people to pay for hundreds of channels they do not watch) -- a business that is dying because of Internet streaming. Since Netflix relies on ISPs to have customers at all, ISPs want to demand money from Netflix (as well as from their customers).
* Somewhere in there are the actual users of Netflix, who have no particular say in any of this. Most of those users would have been happier with BitTorrent, but are too terrified of lawsuits (and even if they did turn to torrents, certain ISPs -- i.e. Comcast -- have been known to deliberately interfere with their customers' traffic to thwart torrents).
If your reading of this is, "ISPs are greedy and want to double-dip," well, yeah, that's what is happening here.
Most large ISPs won't freely peer with Netflix though; that's actually an industry standard, because peering is usually regulated by some kind of traffic balance between packets entering and exiting the network; e.g.: network A will peer with network B is they both exchange similar amounts of traffic in both directions. In Netflix case, it's obvious that this is impossible.
In those cases, Netflix would rely on paying the transit service; that is, they pay Cogent to bring their traffic into Comcast, because Comcast and Cogent already have some (secret) agreement in place (either feee or paid peer, who knows); Netflix would be happy to just pay Cogent to reach Comcast users. They would call it "a compromise" because their best option would be to freely peer with Comcast, but again, it's been an industry standard forever that peering is not only a factor of physical connection, but also of commercial power and quantity of packets sent and received (who needs to send more is the one that has to pay).
Netflix is now saying that Comcast is deliberately letting their peering with Cogent saturate and refusing to upgrade it (or offering economic conditions that Cogent won't accept, which is the same). This way, Netflix must enter a direct (paid) peering agreement with Comcast, to be able to offer good quality to Comcast users; in that agreement, Comcast will let Netflix pay whatever they see fit to reach their users. The peering here would obviously be paid and not free, since (again) there is a strong disproportion between packets going in/out the network.
I suspect this wouldn't be the case, and the outcome would still be about their bargaining position and the negotiation process.
Can anyone with knowledge of these types of negotiations comment?
For p2pflix, such negotiations would be far easier. The reason is that Comcast would need to somehow send those packets into p2pdflix network (they can't flat out refuse to deliver them in a net neutrality environment, or people would complain that the Internet is broken) so the alternative would be to pay a carrier that then peers with p2pflix. So instead of both paying their carriers, they might come into an agreement to do a free peering.
Peering is exactly that: when network A realizes that it's paying carrier C1 too much for traffic going into network B, they call B on the phone and ask for a free peering; network B checks how much they're paying carrier C2 to bring traffic into network A, and afterwards agrees to peer for a certain amount (e.g.: 4Gbps). They choose a data center where they both have a presence, setup a router with 4Gbps routing power, and reconfigure their BGP routes. Done, and the bills with their respective carriers go down, and everybody is happy.
If there is some disproportion, a paid peering might be negotiated; one of the two network would still be paying, but stil a lot less. Say network A is sending 4Gbps into network B, and network B is sending 6Gbps into network A. They can either free peer for 4Gbps (plus B would balance the extra 2Gbps through a carrier to reach A), or B might agree to pay directly A to have up to 6Gbps of peering, paying only the extra 2Gbps. Even assuming that the price per gig is the same of the carrier (and it's usually lower), it's still a good deal for both parts.
The problems happen with YouTube and Netflix because they don't have this negotiation power with ISPs, because they have a very big monodirectional flow of traffic. Let's also remember that on top of being monodirectional, the absolute amount of traffic is staggering: together, they make something like 45% of the TOTAL US TRAFFIC.
Netflix says that Comcast is letting their peering with Cogent saturate, and that's probably true, but I wouldn't be surprised if Comcast measured that 90% of that peering is being used for Netflix traffic. Otherwise, they wouldn't let it saturate because not only they would disrupt Netflix traffic for their users, but also any other website traffic that happens to be delivered through Cogent. (Well actually I guess Comcast doesn't really care that much about their quality of service to end users, but you get my point).
To me, it's not a clear cut. Obviously Netflix is a good and nice company providing a disrupting service we all love, and Comcast is a big bad ISP with monopolistic control on access in most zones and doing big profits with shitty service. So well, it's kind of easy to side, but I wouldn't say that Comcast's requests of being paid directly by Netflix is totally unreasonable, given the way the Internet has always worked up until now.
There may be one, but this isn't a very compelling argument as to why large content providers should need to pay Comcast.
2. They sell the utility their infrastructure provides.
3. They sell the ability for content creators to create content, that they again sell to their users.
They get paid to build a distribution channel, and then charge people the ability to create and distribute content through their stream, then charge for the content. Also, they have no competitors.
If you won't challenge Netflix's argument, then it's your word against theirs. And one of those two companies isn't trying to become the largest ISP in the country.
Netflix chose to go down the route of basically becoming the backbone but isn't willing to accept that if they're an infrastructure provider they have to pay for infrastructure costs.
This is what I got from the argument at least.
I understand that Netflix uses a lot of bandwidth, but what about heavy P2P users that have their traffic subsidized by other customers -- or any other site that is not used by all customers. That's how it works. Everyone pays for access for everyone (except there is tiered access so you are explicitly paying more if you are a heavy user), it's the same way health care works in Canada for the most part.
The agreements between Comcast and Netflix fall into the latter, but because people only think of Netflix as 'a bunch of servers connected to the internet', many don't realize that Netflix/Cogent has stuff inside the backbone, which is a different discussion.
A (shitty) analogy would be the difference between the post office charging me more in stamps depending on who I was when I want to send a letter (net neutrality), and the USPS charging me for the right to be able to have my own stuff inside the post-offices themselves and dropping stuff directly into the trucks.
1) If you are an ISP you need to be present in all the interchange points of the geographical areas where you are licensed to operate in.
2) Any ISP can connect to any other ISP at those points with no charge.
3) Whenever an ISPs link is above 90% peak usage for X days he has to upgrade.
That way everyone pays their own way. If suddenly Comcast customers sign up for Netflix in droves both Netflix and Comcast need to invest to upgrade the links on their side of the interchange, Netflix because they're being paid for the streaming service, Comcast because they're being paid for internet service. If you can come to some other arrangement with interchange at some other point, more power to you, but to be an ISP you are obligated to interchange freely with anyone at these points.
What am I missing?
I think your rule #3 might be enough on its own. Let Comcast choose whether to peer with Netflix or receive their traffic via transit, as long as there is no congestion. Given that transit costs money, this will bring Comcast to the negotiating table.
The backbones are not included. You're only forced to link at the interchange point if you are providing service to end-users, be they residential or servers.
The point of the interchange points is to enforce net neutrality at the local level and then let the market deal with transit between them. The CDNs and transit providers would sell service to connect ISPs to exchange points they're not directly peered at.
>I think your rule #3 might be enough on its own. Let Comcast choose whether to peer with Netflix or receive their traffic via transit, as long as there is no congestion. Given that transit costs money, this will bring Comcast to the negotiating table.
That wouldn't work if the provider is willing to drop them completely. The rule would have to be "You have to be able to reach 100% of the internet and none of your peering points can be above X% peak utilization".
Right now, these exchange points you discuss already exist in the form of IXPs (Internet eXchange Points), which are privately owned and operated. Anyone that wants to peer at an IXP can do so (usually, and assuming you lay your own cable to get there), and whether or not a peering is made is decided by the would be peers. In the world you illustrate, these peering decisions are made by government regulators.
Why is this bad?
If everyone has to peer with each other for free, why would anyone ever lay their own cables to anything but an IXP? More importantly, the profitability of being a transit provider (think AT&T, Level3, etc.) is already dropping off a cliff due to ridiculously low margins. In your world, there is literally zero money to be made as a transit provider. In fact, you strictly lose money providing that service. Short of a government takeover of all Internet infrastructure, there is no feasible way to implement your solution without putting companies out of business in droves.
You effectively make the entire backbone of the Internet a public service. Your solution asks companies, which have expended enormous amounts of capital on infrastructure, to share their capital expenditure with anyone and everyone. That's entirely unfair to those companies, and it renders their investment useless.
Right, and the three rules are about regulating how those decisions get made.
>In the world you illustrate, these peering decisions are made by government regulators.
No, they're still made by the ISPs, it's just that as long as one of them wants it the other can't say no.
>In your world, there is literally zero money to be made as a transit provider.
Not really. Unless you're willing to connect to all the interchange points in the world you will be paying a transit provider to access all the interchange points you don't peer at directly, just like it happens today.
>Your solution asks companies, which have expended enormous amounts of capital on infrastructure, to share their capital expenditure with anyone and everyone. That's entirely unfair to those companies, and it renders their investment useless.
Which companies are your referring to? The end-user ISPs will continue to charge their clients. The transit providers will continue to charge ISPs to connect to other interchange points. The CDNs will continue to provide the same service. No one is getting to use infrastructure for free. In fact the exchange points are just physical points, the fibers going into them are paid by each of the ISPs peering. Everyone pays their own way.
They are willing to do this because the transit providers can not handle their traffic efficiently. So why is Netflix complaining?
If you were an ISP would you provide free transit to everyone? If you did, you would be out of business.
ISPs are being paid for transit to their end users _by their end users_.
(The relevant quote is: "(1) [Transit Networks (e.g. Cogent)] carry traffic over long distances and (2) they provide access to every network on the global Internet. When Netflix connects directly to the Comcast network, Comcast is not providing either of the services typically provided by transit networks.")
Netflix is questioning the premise of your question by suggesting that Cogent and Comcast are _not_ providing the same service. I find the argument fairly compelling, though I'd be willing to hear counter-arguments.
So, if the existing backbone transit providers are not adequate, Netflix should be and needs to be covering the cost of the bandwidth when directly peered with Comcast. Otherwise the cost of this bandwidth is transferred to Comcast customers, all of which do not use the Netflix service.
It really comes down to this... Do all Comcast subscribers deserve to pay for bandwidth that is created by the minority that uses the Netflix service? I do not believe so. The cost should be with the Netflix, they create the overhead, they should pay for it.
There's no clear answer because there's a lot of competing and overlapping incentives here. But at the end of the day, if comcast has to foot the bill to improve quality for netflix customers, how is that fair to comcast customers that aren't using netflix? It is pretty sensible to think that Netflix users should be paying for Netflix service. If Netflix is selling me streaming video without also having a suitable CDN to get me that video, I suggest to you that they've sold me something they can't deliver on. If nobody can build that CDN because my ISP sucks and makes unreasonable terms, netflix should probably stop selling to users of my ISP.
This really reminds me of everyone who was complaining about UPS around the holidays for not delivering their amazon packages in time, even though UPS wasn't giving any shipping guarantees due to the peak demand. Amazon was still providing estimated arrival dates, however, but it turns out those weren't based on much (or at least, enough).
----
Certain statements in this communication regarding the alleged superfluity of disclaimers, including any statements regarding the expected length of such disclaimers, benefits and synergies of the disclaimers, future opportunities for the more disclaimers, and any other statements regarding future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are statements made within the meaning of RFC 1438.
I may just be ignorant here, but in what sense is Netflix an "Internet service provider?"
"Comcast, as well as every other ISP for the last two decades, has a multiplicity of agreements just like the one Netflix approached Comcast to negotiate."
Fix your shit crapcast.
It's a dirty game and no one is completely clean, so we should all come down from our high horse. Fluid and evolving business strategies are not the devil's spawn that people make them out to be.
It might feel good to bad mouth giant corporations and swear that you'll never invite them to the next family BBQ because of some negotiation spat they have with each other, but, in reality, all successful big corporations get down in the mud like everyone else. If you don't like what they do, try and get the law changed.
But please stop with this whiny horseshit... it's like crying to your mom over Billy eating your desert from your packed lunch. It's sad and pathetic and no matter how many of you all bleigh the same memes and buzzwords over and over again, it won't have any lasting effect.
"If you don't like what they do, try and get the law changed." I think this needs to be appended with "and do not buy goods and/or services from them."
Unfortunately, in my case with Comcast, as with many high speed ISPs around the country, there is 0 competition. In order to get speeds higher than 5Mbps in my area, the only option I have is Comcast. In an anti-competitive / monopoly market, I lose the ability to vote with my wallet by finding a competitor whose practices I agree with.