It's official, Netflix opposes the Comcast/TWC merger. I'm not sure why that question had to be asked, I'm sure any number of people could have ghost-written the answer they gave in advance.
That we have Netflix as the de facto standard bearer in a public discussion about peering is something that should give other network operators pause. Netflix's priorities are their own, and their arguments aren't necessarily aiming for the common good of transit networks and CDNs.
Netflix is playing the squeaky wheel here. They are trying to improve their bargaining position in further interconnection deals with last mile operators by simply stirring a pot Comcast doesn't want stirred. It's a time-honored tradition of course in M&A regulatory battles. But it's pre-empting the healthier discussions we might be having and drowning out other voices.
The problem here is not that Netflix has to pay Comcast. Netflix has to pay someone unless it has the network assets and other leverage to balance the scales, like Google largely has done. Paying Comcast for peering isn't by itself an issue. What they're paying Comcast may not even be an issue, it may be entirely fair (if opaque) and the right thing for both sides.
The problem the industry faces is that we have no means of properly monitoring potential abuse. Everyone may play fair today, but tomorrow is always another day. The world of peering and interconnection has never been a place where the word 'fair' applied, but perhaps that is the one thing here we can and should find a way to change.
While Level 3 and some others have been promoting bit-mile peering as a new paradigm, Comcast and AT&T and Verizon and the rest seem to like it exactly as it is. They like it because it has no rules, only guidelines, sharp elbows, and pain thresholds. It isn't being abused now any more than it ever has, but I fear for the system when the spotlight goes away. And it will go away, and sooner than later.
We need to have a discussion about peering ratios and what they really should mean in a world where nearly all traffic is or soon will be video. Sooner or later there will be no mathematically possible way for any non-consumer-last-mile network operator to balance the traffic they exchange, except of course by having zero traffic. When that threshold is crossed, are all other network operators to be declared evil parasites getting a free ride?
We need to have a discussion about how such video traffic can be one party's 'fault' in a two-party transaction and not the others'. The whole narrative where growing traffic that ought to be celebrated is 'blamed' on folks is just unhealthy for the entire sector. Traffic growth should be a good thing.
We need to have a discussion about just how hard it is to build last mile networks cost effectively when the profits seem so much easier to attain. Or is that because they are cherry picked as Verizon has done with FIOS etc? If content providers must contribute to network investment, does that mean last mile operators will commit to hooking up everyone with gigabit connections? I didn't think so. How far does the needle need to be skewed toward the last mile to make network investment worthwhile *everywhere* on the global network infrastructure, and how do we keep it from going too far?
Whether Comcast buys TWC or not is just barely peripheral to this. Comcast would obviously be bigger, and hence have more clout. But stopping the merger doesn't materially change the issues at hand in the interconnection world, they are already here.
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