http://recode.net/2014/06/05/verizon-threatens-netflix-with-...
http://recode.net/2014/06/05/verizon-threatens-netflix-with-...
Verizon is a walled city. Verizon entices people to live in it's city and pay its rent because it says you can get deliveries from all over the world in the blink of an eye if you live in our city. It has high speed trains, and wide thoroughfares.
It also has a small gate that can let a few cars in at a time.
Outside the gates is another series of superhighways and supersonic trains that connect the whole world.
Netflix says "We can't deliver our movies because the gate to Verizon is too crowded."
Verizon says "You can't claim that, that's unfair. We offered to let you operate inside our walls if you wanted to pay our rent, but you didn't want to."
The problem is that when Verizon got all of its citizens, it promised that it would give them fast INTERNET access. It didn't promise them that it would give them fast access to things on the Verizon network, or things with special arrangements that bypass the internet and use a special toll entrance to the city.
There's no reason they can't widen the gate. The highways outside are absolutely fast enough to send as much traffic as they need into Verizon. But Verizon doesn't want to widen that gate, because they know if they don't, Netflix will have to pay them in order to deliver to their residents at a reasonable rate.
But they absolutely don't want their residents to think that they aren't getting their advertised fast access to the super-highways outside.
They're also doing this in concert with AWS, right? Another huge player.