
Comcast response to Netflix - itafroma
http://corporate.comcast.com/comcast-voices/comcast-response-to-netflix
======
click170
You lost me at "No ISP in the country has been a stronger supporter of the
Open Internet than Comcast"

I'm sorry Comcast but if you can't fullfil our agreement (Internet access)
then you aren't an ISP in my mind. I pay you for an Internet connection, not
for the ability to send packets at someone else -- they get to respond to me
as well, that's part of our deal.

~~~
MichaelGG
And is Comcast supposed to wire up every server for free? If I stick up a box
and slap on a 1Gbps uplink to some hosting company that only bought 100Mbps
from Comcast, should Comcast now give my and my hoster free access because you
decided to download a video file from my server?

~~~
dangrossman
That's not what's expected. What's expected is that you get what you pay for,
whether you're a customer on the hosting end or the residential end. If you're
paying your data center for 1Gbps, then they ought to have at least 1Gbps
capacity to the major residential ISPs. If you're paying your residential ISP
for 15Mbps, then they ought to have at least 15Mbps capacity to their peers.
If there are 100 people trying to use 15Mbps at once at peak hours, they need
at least 1500Mbps of capacity to provide the level of service they sold.

What Comcast is being chastised for, the thing that forced Netflix to transit
with them directly, is being paid by its customers to connect to the internet,
then refusing to use that money to buy a pipe large enough to deliver that. It
wasn't Netflix that wasn't buying a large enough pipe to send its own bits. If
Comcast had resolved its disputes with Cogent and widened the pipe to meet the
customer demand _it 's being paid by those customers to meet_, I'm sure
Netflix would've been happy to stick with its ISP.

~~~
zobzu
tldr: peering issue, right?

google has similar issues with some EU providers in particular in france, for
youtube.

traditionally the ISP pays to upgrade the pipes for the content that is
provided by a third party (ie ISP pays for youtube, netflix traffic). ie the
one whos downloading pays for upgrading pipes.

thats where some ISPs (comcast too then i guess?) generally cringe: this way
of dividing costs was ok 10 years ago, but not anymore: streaming is 90% of
their traffic and its not sustainable.

~~~
falsecelaona
In most cases, streaming is basically no different than downloading, right?
The vast majority of people watch a video only once.

So it's more like saying "downloading is 90% of their traffic and its not
sustainable."

~~~
dannypgh
Sure, but it doesn't _have_ to be that way. Something built around multicast
groups could be used to stream multiple people the same content in a
drastically more efficient manner, and then it could be stored locally on
clients for time-shifting purposes.

If you're trying to optimize for efficient use of limited bandwidth, unicast
transferring of identical content to many many people is pretty wasteful. I
think Netflix would argue that network links should be getting bigger and
fatter to render the point moot, but given the streams are also getting bigger
(we didn't always stream 720p everywhere, did we?) that would certainly take a
lot more investment than what's happening now.

------
rexreed
In summary:

NetFlix argument: Comcast is using its bully position to extra a toll from
service providers and service subscribers. A Comcast-TwC merger would make it
worse for Netflix and everyone else.

Comcast argument: Netflix is wrong. We bully all the content providers, not
just Netflix. So, er, yeah, they're wrong.

------
srj
"Internet interconnection has nothing to do with net neutrality; it’s all
about Netflix wanting to unfairly shift its costs from its customers to all
Internet customers, regardless of whether they subscribe to Netflix or not."

Really it's Comcast's customers who are using Netflix and those customers are
paying them for an X Mbps connection. I don't see what difference it makes if
the data comes from Netflix or some other source. It sounds like what Comcast
really wants are data caps for their users but those don't do well with
consumers. Instead they're targeting the largest content suppliers.

~~~
MichaelGG
No it's not like that. You're sort of implying that Netflix/Cogent should get
free peering with Comcast because subscribers want to access Netflix.

With this logic, why should anyone have to pay for hosting bandwidth?

~~~
AnthonyMouse
> With this logic, why should anyone have to pay for hosting bandwidth?

Because you still have to get the traffic from the datacenter to the peering
point. That's what you're buying when you pay for hosting bandwidth --
transit. You're paying somebody to get the traffic to all the networks in the
whole world.

The last mile provider isn't providing transit. You peer with them at _their_
facility. The connection from their customers to their facility was paid for
by their customers. The connection from their facility to yours is provided by
you (or by the actual transit provider you paid). So what would you be paying
them for?

It's nothing but a monopoly rent you have to pay because there is no other way
to reach their customers.

~~~
Touche
You're paying for sending traffic one-way. Peering agreements are free when
both sides are sending an equal amount of traffic to the other.

~~~
AnthonyMouse
Peering agreements are free when no money changes hands. Your argument
simplifies to "because Comcast said so."

~~~
Touche
And free peering agreements (called settlement-free agreements) only happen
when the transit is more or less balanced.

~~~
smileysteve
So, if Netflix just increases data that viewers are sending it, it's okay?

So if Netflix adds

setInterval('EqualizeBandwidth',1000/24) function EqualizeBandwidth(){
$.post('netflix.com/dosbox', {data:randomLongStringEqualtoVideoFrame+1}); }

Then comcast will pay them. (And most subscribers will be fine if they only
watch < 31 movies a month given an 8gb movie.)

But bonus if netflix causes every one of their customers to hit the 250gb cap
and therefore hate comcast. Any politician that has family trying to watch
netflix would complain of overages then and shut comcast out.

------
clavalle
I am surprised AT&T left the comment section open in their Public Policy Blog
that this Comcast response links to:
[http://www.attpublicpolicy.com/consumers-2/who-should-pay-
fo...](http://www.attpublicpolicy.com/consumers-2/who-should-pay-for-netflix/)

They get raked over the coals (and rightly so, IMHO), by people pointing out
that they already pay for their bandwidth, so why should they pay twice (once
through AT&T and once through the costs Netflix would have to pass through to
them).

It really seems like AT&T and Comcast are complaining that people are actually
starting to demand the full service that they pay for. It is really hard to
take that argument seriously.

~~~
hanley
Looks like Comcast left their comment section open too, although you have to
scroll past the 2 large paragraphs of legal matters to get to the comments.

I thought it was interesting that they have more legal content than actual
content on the post.

~~~
zxexz
Funny - it now appears that there are 0 comments on the Comcast page.

~~~
ncallaway
It appears the comments are moderated. I attempted to post a comment and it's
now in the moderation queue.

Presumably "0 comments" is simply the number of comments that portray Comcast
in a reasonable light?

------
mariusz79
The sentence "While it’s understandable for Netflix to try to make all
Internet users pay for its costs of doing business" should probably end with
"we would like to shift some of our cost of doing business back to Netflix"

------
pedrocr
The quoted AT&T piece is quite interesting:

[http://www.attpublicpolicy.com/consumers-2/who-should-pay-
fo...](http://www.attpublicpolicy.com/consumers-2/who-should-pay-for-netflix/)

Particularly because the comments on the AT&T page by its own customers
completely demolish the argument.

These ISPs are seriously arguing that the cost to upgrade their own networks
to deliver the content their own customers are requesting should fall on the
other side of the link. They're arguing this apparently even after
Netflix/Akamai/etc have build CDNs to deliver the content right next to their
subscribers. They're not even having to build a backbone.

------
rchowe
I'm not too versed in this argument, so could someone please explain why
Netflix's activities aren't covered by the normal peering agreements that make
the "internet backbone" work? Doesn't Netflix pay it's ISP appropriately which
gets disseminated by the other ISPs the traffic gets routed through?

~~~
giovannibajo1
Netflix doesn't have a "primary ISP", they are a network. They would like to
freely peer to networks and ISPs that they can physically reach (e.g.: US
ISPs), and they are happy to pay carriers for transit, that is bringing their
traffic elsewhere in the world where they don't have a physical presence.

Most large ISPs won't freely peer with Netflix though; that's actually an
industry standard, because peering is usually regulated by some kind of
traffic balance between packets entering and exiting the network; e.g.:
network A will peer with network B is they both exchange similar amounts of
traffic in both directions. In Netflix case, it's obvious that this is
impossible.

In those cases, Netflix would rely on paying the transit service; that is,
they pay Cogent to bring their traffic into Comcast, because Comcast and
Cogent already have some (secret) agreement in place (either feee or paid
peer, who knows); Netflix would be happy to just pay Cogent to reach Comcast
users. They would call it "a compromise" because their best option would be to
freely peer with Comcast, but again, it's been an industry standard forever
that peering is not only a factor of physical connection, but also of
commercial power and quantity of packets sent and received (who needs to send
more is the one that has to pay).

Netflix is now saying that Comcast is deliberately letting their peering with
Cogent saturate and refusing to upgrade it (or offering economic conditions
that Cogent won't accept, which is the same). This way, Netflix must enter a
direct (paid) peering agreement with Comcast, to be able to offer good quality
to Comcast users; in that agreement, Comcast will let Netflix pay whatever
they see fit to reach their users. The peering here would obviously be paid
and not free, since (again) there is a strong disproportion between packets
going in/out the network.

~~~
rahimnathwani
If Netflix were to make their users' devices upload as much data as they
download (even junk data which would be discarded at by their edge routers),
would they solve the problem of the in/out data imbalance, and thereby be able
to take advantage of free peering (with no bandwidth cap) with Comcast?

I suspect this wouldn't be the case, and the outcome would still be about
their bargaining position and the negotiation process.

Can anyone with knowledge of these types of negotiations comment?

~~~
maxhou
How about asking for net neutrality on DDOS traffic ? I find it unfair that my
ISP is shaping it ! :)

------
sytelus
What angers me most is FCC and Comcast both are spinning this whole thing as
"improving" net-neutrality while in reality is is plain, simple and naked "net
anti-neutrality". They are obviously behind this push as lobbyist. Do they
think people are complete idiot to buy off statements like charging content
providers actually reduces their cost?

~~~
dylan604
Yes, I believe that this is exactly what these corporations believe. They
assume that the general public is too unaware of "how the sausage is made" to
even know they are being duped. The average American, HN readers are not
average, just want to come home from work to relax by not thinking. It's the
same thing that happens when a network goes nuclear by pulling their content
off of Comcast/DirecTV/etc. They count on the fact that average Americans just
want the issue to go away so they can get back to watching Kardashians do what
ever it is they do that make people want to watch.

------
JaggedJax
The Comcast argument that "Netflix [...] try to make all Internet users pay
for its costs of doing business" reads to me like, "We can't actually offer
everyone the bandwidth we have sold them so we either have to raise our rates
or charge the largest content providers in order to keep our profit margins."

There may be one, but this isn't a very compelling argument as to why large
content providers should need to pay Comcast.

------
vonklaus
Comcast gets paid IN 3 WAYS FOR THE SAME CONTENT, AT LEAST. 1\. They get tax
money to subsidize their infrastructure costs.

2\. They sell the utility their infrastructure provides.

3\. They sell the ability for content creators to create content, that they
again sell to their users.

They get paid to build a distribution channel, and then charge people the
ability to create and distribute content through their stream, then charge for
the content. Also, they have no competitors.

------
curiouscat321
How are we supposed to believe them when they say that "there is no need for
us to engage in a point-counterpoint with Netflix"

If you won't challenge Netflix's argument, then it's your word against theirs.
And one of those two companies isn't trying to become the largest ISP in the
country.

------
scrabble
So Netflix is wrong, because? I really didn't see a single counterpoint in
that response.

~~~
rtpg
The counterpoint is more in the first link than the actual article, but it is
that the Comcast/Netflix relationship is _not_ a website-ISP sort of
relationship (the one where net neutrality comes into play), but an ISP-ISP
peering relationship. In that relationship, ISPs have paid for peering
agreements since the dawn of time.

Netflix chose to go down the route of basically becoming the backbone but
isn't willing to accept that if they're an infrastructure provider they have
to pay for infrastructure costs.

This is what I got from the argument at least.

~~~
scrabble
I could agree with that, but later they say that it's not fair that Comcast
customers without Netflix pay for the bandwidth of Netflix users.

I understand that Netflix uses a lot of bandwidth, but what about heavy P2P
users that have their traffic subsidized by other customers -- or any other
site that is not used by all customers. That's how it works. Everyone pays for
access for everyone (except there is tiered access so you are explicitly
paying more if you are a heavy user), it's the same way health care works in
Canada for the most part.

~~~
rtpg
The problem (on both sides of the argument) is that there's conflation of the
website-ISP relationship (i.e. should Comcast be allowed to throttle
services/make "fast lanes" for certain services) and the provider-provider
relationship (i.e. should Comcast allow other providers to get direct
connection into their backbone?)

The agreements between Comcast and Netflix fall into the latter, but because
people only think of Netflix as 'a bunch of servers connected to the
internet', many don't realize that Netflix/Cogent has stuff inside the
backbone, which is a different discussion.

A (shitty) analogy would be the difference between the post office charging me
more in stamps depending on who I was when I want to send a letter (net
neutrality), and the USPS charging me for the right to be able to have my own
stuff inside the post-offices themselves and dropping stuff directly into the
trucks.

------
pedrocr
Here's a suggestion on how to implement a fair interconnect market. The
world's regulators designate a few physical locations as public interchange
points governed by the following rules:

1) If you are an ISP you need to be present in all the interchange points of
the geographical areas where you are licensed to operate in.

2) Any ISP can connect to any other ISP at those points with no charge.

3) Whenever an ISPs link is above 90% peak usage for X days he has to upgrade.

That way everyone pays their own way. If suddenly Comcast customers sign up
for Netflix in droves both Netflix and Comcast need to invest to upgrade the
links on their side of the interchange, Netflix because they're being paid for
the streaming service, Comcast because they're being paid for internet
service. If you can come to some other arrangement with interchange at some
other point, more power to you, but to be an ISP you are obligated to
interchange freely with anyone at these points.

What am I missing?

~~~
bmadden
This is a terrible solution. If you think the situation right now is bad, your
solution will only exacerbate the problem.

Right now, these exchange points you discuss already exist in the form of IXPs
(Internet eXchange Points), which are privately owned and operated. Anyone
that wants to peer at an IXP can do so (usually, and assuming you lay your own
cable to get there), and whether or not a peering is made is decided by the
would be peers. In the world you illustrate, these peering decisions are made
by government regulators.

Why is this bad?

If everyone has to peer with each other for free, why would anyone ever lay
their own cables to anything but an IXP? More importantly, the profitability
of being a transit provider (think AT&T, Level3, etc.) is already dropping off
a cliff due to ridiculously low margins. In your world, there is literally
zero money to be made as a transit provider. In fact, you strictly lose money
providing that service. Short of a government takeover of all Internet
infrastructure, there is no feasible way to implement your solution without
putting companies out of business in droves.

You effectively make the entire backbone of the Internet a public service.
Your solution asks companies, which have expended enormous amounts of capital
on infrastructure, to share their capital expenditure with anyone and
everyone. That's entirely unfair to those companies, and it renders their
investment useless.

~~~
pedrocr
_> Anyone that wants to peer at an IXP can do so (usually, and assuming you
lay your own cable to get there), and whether or not a peering is made is
decided by the would be peers._

Right, and the three rules are about regulating how those decisions get made.

 _> In the world you illustrate, these peering decisions are made by
government regulators._

No, they're still made by the ISPs, it's just that as long as one of them
wants it the other can't say no.

 _> In your world, there is literally zero money to be made as a transit
provider._

Not really. Unless you're willing to connect to all the interchange points in
the world you will be paying a transit provider to access all the interchange
points you don't peer at directly, just like it happens today.

 _> Your solution asks companies, which have expended enormous amounts of
capital on infrastructure, to share their capital expenditure with anyone and
everyone. That's entirely unfair to those companies, and it renders their
investment useless._

Which companies are your referring to? The end-user ISPs will continue to
charge their clients. The transit providers will continue to charge ISPs to
connect to other interchange points. The CDNs will continue to provide the
same service. No one is getting to use infrastructure for free. In fact the
exchange points are just physical points, the fibers going into them are paid
by each of the ISPs peering. Everyone pays their own way.

------
togasystems
What are other examples of companies that have agreements with Comcast?

~~~
naviwins
Google, Microsoft, Twitch, all directly peer with Comcast.

They are willing to do this because the transit providers can not handle their
traffic efficiently. So why is Netflix complaining?

~~~
lern_too_spel
Netflix isn't complaining about peering directly. That's exactly what they
want. They're complaining because according to anybody with common sense, that
peering should be settlement-free.

~~~
naviwins
Why would it be settlement free? Its just like any other peering agreement, If
the data was symmetrical it would be free, but its not. Netflix is sending way
more than its receiving.

If you were an ISP would you provide free transit to everyone? If you did, you
would be out of business.

~~~
ncallaway
There's a difference between providing interchange transit, and transit to
your end users.

ISPs are being paid for transit to their end users _by their end users_.

~~~
naviwins
hmm... so Netflix paid cogent before, and now you think they should not pay
Comcast for the same service? Where is your logic?

~~~
ncallaway
Netflix's blog post lays out the argument here:
[http://blog.netflix.com/2014/04/the-case-against-isp-
tolls.h...](http://blog.netflix.com/2014/04/the-case-against-isp-tolls.html)

(The relevant quote is: "(1) [Transit Networks (e.g. Cogent)] carry traffic
over long distances and (2) they provide access to every network on the global
Internet. When Netflix connects directly to the Comcast network, Comcast is
not providing either of the services typically provided by transit networks.")

Netflix is questioning the premise of your question by suggesting that Cogent
and Comcast are _not_ providing the same service. I find the argument fairly
compelling, though I'd be willing to hear counter-arguments.

~~~
naviwins
Right, Comcast is providing transit to their customers, which the
aforementioned transit providers could not adequately handle. Although it is
not a typical transit network it is still the only route to Comcast customers.

So, if the existing backbone transit providers are not adequate, Netflix
should be and needs to be covering the cost of the bandwidth when directly
peered with Comcast. Otherwise the cost of this bandwidth is transferred to
Comcast customers, all of which do not use the Netflix service.

It really comes down to this... Do all Comcast subscribers deserve to pay for
bandwidth that is created by the minority that uses the Netflix service? I do
not believe so. The cost should be with the Netflix, they create the overhead,
they should pay for it.

------
ENGNR
Where's the actual response, there's more disclaimer than content there

~~~
charonn0
Yeah!

\----

Certain statements in this communication regarding the alleged superfluity of
disclaimers, including any statements regarding the expected length of such
disclaimers, benefits and synergies of the disclaimers, future opportunities
for the more disclaimers, and any other statements regarding future
expectations, beliefs, plans, objectives, financial conditions, assumptions or
future events or performance that are not historical facts are statements made
within the meaning of RFC 1438.

------
blazespin
TLDR - Netflix abused net neutrality to their benefit so therefore we get to
kill net neutrality.

------
krebby
Disappointed there weren't more House of Cards puns.

------
steinnes
Another reason to do business with your local small business ISP.

~~~
jkelsey
Ha! Good one.

------
micahjames
> Comcast has a multiplicity of other agreements just like the one Netflix
> approached us to negotiate, and so has every other Internet service provider
> for the last two decades.

I may just be ignorant here, but in what sense is Netflix an "Internet service
provider?"

~~~
muaddirac
I think it's a misplaced modifier:

"Comcast, as well as every other ISP for the last two decades, has a
multiplicity of agreements just like the one Netflix approached Comcast to
negotiate."

~~~
micahjames
Ah, that would make sense. Thanks!

------
vxNsr
I don't know if anyone has pointed this out yet, but Netflix said recently
that they will be raising their prices... and amazon did the same thing, it's
odd that if this really wouldn't be passed on to the consumer as Comcast is
claiming that right after netflix signed a deal with them Netflix would
suddenly feel the need to raise prices. I know, I know, correlation doesn't
mean causation, but c'mon!

------
rtpg
[http://corporate.comcast.com/comcast-voices/comcast-
response...](http://corporate.comcast.com/comcast-voices/comcast-response-to-
netflixs-opposition-to-time-warner-cable-transaction) This (the first link in
the article) actually enumerates the points of its argument and is more
informative on the position.

------
massappeal
its funny to me that two companies that hate each other so much have to do
business together

~~~
jhawk28
Apple/Samsung are another example.

------
sergiotapia
Additional discussion:
[http://www.reddit.com/r/news/comments/23mdhx/netflix_officia...](http://www.reddit.com/r/news/comments/23mdhx/netflix_officially_comes_out_against_the/)

------
sfall
ok lets not decide if the att link is valid, no one at comcast thought you
know who we should align ourselves with att. Another ISP and telecom company
that made the consumerist quarterfinals for worst company in america 2013

------
mavrc
With Stephen Colbert changing shows next year, Comedy Central should consider
hiring the writer of this to run a new show. Though something leads me to
believe the writer doesn't know it's satire.

------
rartichoke
I wish Netflix would just deny access to every Comcast subscriber. Maybe that
will knock Comcast into reality after like 20% of their subscribers instantly
cancel their account.

------
chasingtheflow
Interesting how the legalese was longer than the response.

------
knodi
So I pay for 40Mbs downloads but comcast creates clogs where it "can't"
provide me full 40Mbs on my netflix stream?

Fix your shit crapcast.

------
gregd
I'm sorry Comcast but you aren't a simple "industry observer"...you are The
Industry(tm).

------
knodi
Fuck crapcast.

------
jebblue
Cry me a river Comcast and you actually quoted AT&T, laughable. Piss off.

------
conroe64
Comcast's stock is up over 250% over the last few years and has made me a lot
of money... so whatever they've been doing has been working and IMO they
should keep at it.

It's a dirty game and no one is completely clean, so we should all come down
from our high horse. Fluid and evolving business strategies are not the
devil's spawn that people make them out to be.

~~~
betterunix
"Evolving business strategies" like _fighting new technologies to maintain a
decades-old business model_? Interesting perspective you have there...

~~~
conroe64
These weird political fights are in the wrong arena. I'm not going to try to
argue with you about what it means to fight a new technology and whether a
decades old business model is valid or not, because it's just silly.
Regardless of how you and I feel whether a company is doing the right thing,
it's there and it's surviving, and in this case, thriving, in its niche.

It might feel good to bad mouth giant corporations and swear that you'll never
invite them to the next family BBQ because of some negotiation spat they have
with each other, but, in reality, all successful big corporations get down in
the mud like everyone else. If you don't like what they do, try and get the
law changed.

But please stop with this whiny horseshit... it's like crying to your mom over
Billy eating your desert from your packed lunch. It's sad and pathetic and no
matter how many of you all bleigh the same memes and buzzwords over and over
again, it won't have any lasting effect.

~~~
ncallaway
In general I agree with the sentiment behind this post. Except, I disagree
with one sentence that's key to the context in the case of Comcast:

"If you don't like what they do, try and get the law changed." I think this
needs to be appended with "and do not buy goods and/or services from them."

Unfortunately, in my case with Comcast, as with many high speed ISPs around
the country, there is 0 competition. In order to get speeds higher than 5Mbps
in my area, the only option I have is Comcast. In an anti-competitive /
monopoly market, I lose the ability to vote with my wallet by finding a
competitor whose practices I agree with.

