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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Categories: Cable · Internet Traffic · Video
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What a horrible precedent. Shame on Comcast for their extortion and on Netflix for paying it.
Comcast needs the fees to pay for expansion of their network to process the additional bits. Sure! Meanwhile they want to spend $25B on expanding their territory rather than upgrading their network. They have the slowest internet connection of any major cable company and their customers would prefer more spending on faster service and less on accumulating more geography to serve.
As a competitor of Comcast, I’ll have to disagree. They have a service that is very fast for the price. The only one with a better price for the speed is Optimum, which can’t really be directly compared. No one offers a faster service.
It depends with whom you’d like to connect. Want to use the big bandwidth that you pay for as a customer to connect with Netflix? Tough luck, a-hole (sorry, I meant “valued customer”).
If you want to set up a large file transfer with your neighbor, you both have to pay for available bandwidth, right? Why should that scenario work any differently for the most popular neighbor ever?
Nothing to see here, nothing to see here, just the destruction of the interconnect model that’s given rise to to the Internet over its first 25 years. Keep moving people, nothing to see here.
Depending on the terms of the contract between NetFlix and Comcast, it seems to be working. Netflix has entered into a paid-peering arrangement with Comcast. Nothing special.
I agree with you that my statement of Comcast being the slowest of any major cable company was unfair although I did read it in a recent article I can not find. As a Comcast customer and stock holder I know speeds have increased in recent years but obviously they are not the same everywhere. I lost connections to my phone and internet three times last week during busy hours but that is not the norm. Comcast has improved.
However, I do not feel very close to the fiber systems to the home by Verizon, Google, or AT&T. As a customer I would rather Comcast begin a fiber to the home campaign to give hope of the clarity I have seen on fiber systems. As a stockholder I recognize there is more revenue potential by increasing geography than there is by upgrading systems. Even with a higher grade of service they will not be able to extract much more money from their customers.
http://www.businessinsider.com/the-netflix-comcast-deal-led-to-a-serious-speed-increase-2014-4?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Tech Chart Of The Day&utm_campaign=SAI_COTD_041714
It’s only unfair is he price is unfair.
Hastings hugely overplayed a weak hand by arguing that content providers should receive unlimited free interconnection.
Instead of arguing for an interconnection structure that’s laughable to most informed observers (and only truly delivers a benefit to a relatively short list of Really Big Content Providers), Netflix should be scrambling ot implement the P2P distribution model which Hastings casually put out there.
Any consumer access ISP might admit that unfettered use of “unlimited” bandwidth breaks their core business model of massively overselling last mile bandwidth, and while they’ve been able to rationalize draconian anti-P2P measures where the primary application was piracy, the game changes if legitimate distribution of licensed content becomes the driving force.
Netflix surely is scrambling to implement P2P technology, but there’s no reason to think that it will make a difference. Netflix’s previous transit providers maintained balanced peering ratios, and yet Netflix was still singled out for Comcast’s extortion. Do you really think that Comcast won’t just rate limit this peer traffic? They’re screwing over Netflix and Netflix’s customers right now because they can. The monopolist dynamic of the cable industry won’t be any different, so their incentives will remain. They’ll pull the same crap and point to new red herrings.
Rob, please elaborate on this: “The key issue to me is the growing potential for last mile providers…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.”
Comcast’s 2013 annual report shows their cable division invested $5.4B in capital improving the network. Netflix’s annual report doesn’t cite a capital investment in their network. Because they don’t own or operate one.
Netflix pays Cogent and Level 3 and others for the privilege of using their network. Then, both to protect their cable tv revenue and because they can due to their stranglehold on their customer’s access to Netflix, they choke off their customer’s access to Netflix.
Comcast is sabotaging its customers in order to screw a competitor of another one of its businesses. The Charter deal ought to go down in flames.
When Netflix pays Cogent or Level3, they’re receiving a valuable service, but if they pay Comcast, it’s extortion.
What evidence is there that peering ratios were balanced, or that Comcast refused to expand interconnection with either Cogent or Level3?
Netflix is not the first content provider to find value in getting their content closer to consumers, nor are they the first to pay for the privilege. They are certainly the most outspoken about how they feel about this arrangement, but the similarities end there.
I’m not so sure industry will ever allow it to do so is to admit that P2P has a legal use and everyone with a torrent client isn’t a thief. They’ve been spinning the BS story for to long in the other direction to do a 180 now.