Traffic Ratio Is a Code Word for Over-the-Top Video

November 30th, 2010 by · 13 Comments

When there is opposition to something popular, one very human response is find a way to fight it without ever naming it directly.  Instead one chooses a proxy, something that sounds better.  It seems to me that this is the case right now in the Comcast/Level3 spat.  One of Comcast's principal positions is that traffic from Level 3 is that the traffic ratio is rising, maybe approaching 5-1, and therefore they are abusing the peering system.  But when connecting to a last mile network on the internet of today and tomorrow, how can it be any other way?

Comcast itself sells asymmetric bandwidth to its customers.  Upload speeds are far slower than download speeds - usually the ratio is around five to one in favor of downloads (sound familiar?).  Their customers invariably download far more than they upload - by far the largest and most asymmetric of that being video.  Mathematically, there are only two ways that  this basic asymmetry won't propagate to the peering relationships on the other side of Comcast's network sooner or later.  Either

  1. The consumer requests his video  from Comcast, and thus it is served internally, or
  2. The consumer requests his video from an over the top provider which is delivered over transit or paid peering connections to Comcast's network

Thus, if a traffic ratio of near one is required for settlement-free peering with a last mile providers, then such peers can NEVER deliver much over-the-top video and are therefore cut out of the equation.  So for a content provider to to deliver substantial video to Comcast's customers in competition to Comcast itself, they must pay for a direct connection to Comcast or to someone else who does.  Other traffic can come in from peers - web browsing, email, VoIP, but not over-the-top video.

By choosing to make a stand on traffic ratios in peers, Comcast is fighting directly against over-the-top video, pure and simple.  This way they can state to regulators that they will not interfere with over the top traffic, as they did recently during the NBC merger oversight, even while trying to create a world where they *always* get paid on both ends for that same traffic.  And while they must compete in a duopoly for the consumer end, they can set whatever price they like for transit because there is no way to bypass the consumer connections they have at any one time.  Quite elegant actually.  Why build a new toll booth when you can just re-purpose the one you have and close down all other gates.

There has long been a dispute about whether traffic ratios are a real and important criteria in peering, or else simply a conveniently labeled bargaining chip in a game of power.  But we're going to see that debate move beyond the traditional crowd of IP nerds now, I think.

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Categories: Cable · Internet Backbones

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13 Comments So Far


  • Anon says:

    of course traffic ratios matter. every peering agreement ever written governs what ratio is allowed. level3 has just figured out that some tier1 carriers are more tier1 than others — they are called the ones with customers on them (att, vz, comcast) vs commodity transit providers (L3, above, gx, cogent). odd that L3 didn;t know this since they (and other tier1’s) routinely de-peer or charge folks out of ratio with them? is their theory that akamai and limelight have to pay for (unbalanced) transit but they dont ? good luck

    • Rob Powell says:

      I’m aware that L3 and others have used the same argument in the past.

      But you are wrong to say that the only ones with customers on them are VZ/ATT/Comcast. They are the only ones with *consumer* customers. Content providers pay for bandwidth too, and they pay those like L3, GX, Cogent, etc.

      What you’re saying is that only the last mile customers matter, i.e. that the bottleneck is everything. And I’m not saying you’re wrong, maybe this is just the world rationalizing itself.

      I’m just trying to point out the logical result of all this. Right now, over-the-top video has many routes to Comcast’s subscribers. Akamai and Limelight can buy from with Comcast, but that is balanced by the possibility of buying transit elsewhere if Comcast is unreasonable. But if this new arrangement holds, they will have only one route, and it will not be held in check by competitive transit pricing.

      • Anon says:

        I am drawing a distinction between carriers with eyeballs and those that are commodity transit providers. Anyone of 20 (200?) providers can get you from LA to NYC but only a few can get you to a paying customer. I warned you that in age of net neutrality threats, carriers will guard the traffic the accept. Game on – I expect more of this. Comcast doesn’t need L3 as much as L3 needs comcast. Proof is in the payment

  • Crossy says:

    Well this “game” can be escalated by LVLT also. Cogent might have done this. Just cut off the connection. I bet THOUSANDS of angry customers would have called Comcast and asked their customer rep. whether they have gone crazy already.

    And if those “last mile” providers like Comcast overdo their hand, whoopla – suddenly CLECs will have a reason to exist – in that they are the ones – NOT electing a toll-booth.

    It’s good to see that the new behomth is showing its true colours here. At least we have been warned
    CROSSY

  • Anon says:

    And traffic ratio is code word for peering. Every hoister in the world would like to “peer” with L3, but they have bad ratios & buy

  • toddforthree says:

    anon. the difference between last mile “depeering” and depeering at the transit level is a question of how many providers there are at each of those levels. if there is only one option to deliver the video to the last mile the government gets involved. see railroads, air traffic controllers, longshore men etc as examples of this. when there is more than one option the depeering is just business and they stay out. so your analogy of the last mile being the same as transit is not going to hold up in the regulators eyes due to viable options.

  • Eric says:

    Comcast is fairly unique among providers in the amount of revenue it derives from home users rather than businesses. If AT&T made the same demands of L3, Level 3 could depeer them and AT&T’s business customers (the ones with the option of switching providers) would suffer. However, the annoyance of switching last-mile providers means that the disruption caused would have to be pretty blatant for people to switch away from Comcast.

    Of course, I find it hard to feel too sorry for Level3 given that they have been generally ambivalent about Net Neutrality. (disclosur: I have worked with Cogent, which is a strong supporter of net neutrality, in the past). But I hope things don’t continue moving in this direction.

  • carlk says:

    Rob, you might find this conversational thread being bantered about by “IP NERDS” most interesting at a minimum. Seems to imply Akamai players “kicking hornet nests” at the core of the conflict. I believe they have the “compensation methods,” according to them, (3) TRIPLE DIPPING, very wrong, however.

    http://seclists.org/nanog/2010/Nov/1048

  • Ulf says:

    The whole problem with this argument is that Level 3 is delivering traffic that Comcast is requesting. This isn’t Transit traffic.

    If this doesn’t get resolved in a friendly manner I could see L3 depeering with Comcast. The traffic will still get there but Comcast will have to deal with the legal departments of 30 other providers that will deliver the traffic instead. Not to mention the 10 million angry Comcast customers who have trouble with Netflix.

    • CROSSY says:

      Exactly ! I hope LVLT will escalate this dispute. Then it’s time for Comcast to face THEIR OWN ANGRY CUSTOMERS why they can’t reach more than half of the cloud without much latency. They will quickly behave nicely. It will also raise the “quality issue” besides the simple price point of last mile connection. Having a “friendly” provider who doesn’t compete with other vertical offerings (unlike comcast which competes with any Video delivery business) will be worth a premium

      The trick here is that it’S Comcast’s own customers who are doing the Netflix requests…

      Interestingly, as an example, ESPN actually was able to reverse the money flow. If Comcast isn’t careful, some very popular sites could try the same with them.

      CROSSY

    • anonymouse says:

      The whole “requesting” argument is moot. Traffic is always requested on the Internet. It doesn’t mean that senders don’t pay for their part to deliver it.

      I never understood why people keep thinking that only users should pay for traffic because “they requested it”. That is not how the Internet has EVER worked.

  • carlk says:

    Robert, I believe that Dan Rayburn just fired a shot across the bow of those “IP NERDS!” I can hear their “SERVERS” blowing up across the market place, with “HALF OFF” sales in-between the ensuing FIRES 🙂

    http://blog.streamingmedia.com/the_business_of_online_vi/2010/12/level-3s-lower-cost-comes-from-owning-the-network-not-free-peering.html

  • Cowardly Poster says:

    Let’s go with Level 3’s own words:

    »www.prnewswire.com/news-releases···572.html

    quote:”To be lasting, business relationships should be mutually beneficial. In cases where the benefit we receive is in line with the benefit we deliver, we will exchange traffic on a settlement-free basis. Contrary to Cogent’s public statements, reasonable, balanced, and mutually beneficial agreements for the exchange of traffic do not represent a threat to the Internet. They don’t represent a threat to anyone other than those trying to get a free ride on someone else’s network.”

    This is what Level 3 publicly stated when Cogent cheaply oversold a large amount of “sending” business (about 5 times) and started dumping it on the Level 3 network to carry to Level 3’s end user base who could only be reached by going through the Level 3 network.

    The Level 3 customers who paid Level 3 were “requesting” this traffic, so why wasn’t it free?

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