In the category of obvious results, Netflix said yesterday in a blog post that its video streaming to Comcast customers is back up. Average speeds of 2.5Mbps were up 65% since January, a not insignificant boost. It had better be up, since they're paying for it now right?
Netflix agreed in February to paid peering to reach Comcast subscribers more directly, after congestion on the Comcast/Cogent network border degraded performance. Then, as other last mile operators started looking for similar deals the company started complaining loudly about having to pay tolls.
The waters have gotten muddy though, especially with the strange idea that Netflix ought not pay anything at all. Netflix doesn't own a network -- it just hasn't invested in that sort of infrastructure. They *were* paying Cogent for bandwidth, and it wasn't being called a toll then (although Comcast was surely trying to make Cogent pay one). Before that, Limelight was paying Level 3, LimeLight, and Akamai for CDN services, and it wasn't a toll then either.
Whether you have settlement-free interconnection or paid peering or transit has to depend on how much each side invests into the carriage of the traffic. If it doesn't, then the system will break down. The key issue to me is the growing potential for last mile providers (of whom Comcast is just one) to use their size and position at the last mile to strong-arm the other side of the interconnection fence in a way out of proportion to the balance of investment, not whether traffic exchange should always be free for anyone. That's just crazy talk.
In other words, that Netflix's throughput would go up with Comcast when it pays for it is obvious. That it went down in the first place may reflect some undue pressure from Comcast on Cogent that is a shot across the bow of transit backbones and a harbinger of future events. But I'm feeling a bit swept away by the virulence of the 'how dare they make Netflix pay anything' movement.
I actually don't think Reed Hastings & crew are even remotely expecting to get such a thing. What they want is simply an additional card to play at the various negotiation tables to get a better deal.
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