

Despite Comcast-Netflix deal, settlement-free peering is alive and well - wavesound
http://www.internap.com/2014/03/07/despite-comcast-netflix-deal-settlement-free-peering-alive-well/

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njyx
The article isn't wrong, but it's a new situation when content providers start
paying to peer explicitly. Netflix and other large players already pay for CDN
structures to get content close to the last mile. Now they are going to be
paying for the last mile in some sense also.

Fine for Netflix to do, but if prices rise and the thresholds where this
applies lower, new services will get shut down due to cost.

Hopefully some ISPs will not charge and market "fast access to whatever you
want" and not "fast access to whatever we chose based on what they paid").

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ghshephard
The entire point of the Netflix/Comcast paid peering arrangement was that
Netflix didn't want to pay a "CDN structures to get content close to the last
mile." If they had paid a CDN for content delivery to Comcast's network (as
thousands of other companies do), then none of this would have ever developed.
Netflix was just trying to find the cheapest possible way of getting the
content that they deliver, to the eyeballs that were willing to pay for it.
The only way that "ISPs will not charge" is if we manage to get broadband
competition in enough markets in the United States so that Quality of Service
becomes a differentiation.

~~~
Karunamon
Didn't Netflix offer to put their CDN machines inside of Comcast and were flat
out turned down?

~~~
ghshephard
Yes Netflix offered that, and that's what the Comcast/Netflix paid-peering
arrangement accomplishes, albeit in a slightly different manner than if
Netflix OpenConnect Appliance had been dropped into a Comcast data center
cage.

In order to connect to Comcast's network you need port capacity on Comcast's
routers. Netflix pushes approx. 3 Terabits [1] onto the Comcast network, so
they need Comcast to supply (configure, support, monitor, upgrade, power,
etc...) approx. 300 10-GigE interfaces, as well as any incremental Line Cards,
Routers, Cabinets that might be required to add that port capacity and
bandwidth capability to their network. (3 terabits is enough bandwidth to get
your attention)

In addition, now that there is an extra 3 terabits of incoming data onto their
network, Comcast also has to scale their outgoing network (to the home users)
by another 3 terabits as well, so there are incremental costs there. It could
be argued (and I would do so) - that those 3 terabits have _already_ been paid
for by the cable-subscribers, and so Comcast should be prepared to provide
sufficient capacity to deliver it - but regardless, it's an additional cost
that Comcast needs to account for, regardless of whether they are installing
appliances in their network, or peering with content providers.

Comcast provides these peering locations in at least 17 discrete locations in
the United States [2] - Many of those locations are just general CoLos - I've
heard of about 25% on that list - so many of them aren't "Dedicated Comcast
Data Centers" \- they are CoLos in which multiple customers can come together
and interconnect with each other or carriers such as Level3, Cogent, etc....

So, in those facilities, from Comcast's perspective, providing Port Capacity
is a matter of connecting a fiber patch cable to one of their 10 GigE
interfaces, and exchanging some BGP routes with a content provider.

It's true that there are several routing relationships Comcast can establish
with content providers, and some of those relationships might involve placing
those Content Providers in AS7922 (Comcast's Autonomous System) - but, from a
cost perspective, there are a lot of costs that are duplicated, regardless of
whether Comcast establishes a peering relationship with Netflix, versus having
them route from within Comcast networks.

You still need to install 300+ 10 GigE ports and all the associated costs that
go along with that, and you still have to provide downstream capacity of 3
Terabits to home subscribers. Peering with a partner in a 3rd party CoLo
instead of having to provide them cabinets/electrical/etc for the appliances
avoids those cabinet/appliance costs.

Something to keep in mind, is that in addition to providing the three terabits
streaming capacity on their network, Comcast would also have to provide
Capacity to keep those Appliances "supplied" \- each of the appliances would
need about five Terabytes of content loaded each night [3, pg 13]. There are
also some operational advantages to managing a Content Provider at "arms-
length" distance with BGP, versus having to do custom routing on your own
network to support them. Comcast already knows how to peer and interoperate
with many carriers/partners using BGP, so no new procedures/technology
required to add Netflix to that list.

In the end - Netflix and Comcast each negotiated in their own best interests.
Netflix's access to the Comcast network was provided in roughly the same way
that Content Providers have been getting access to networks for the last 10
years, and, until there is real competition in the broadband market, you'll
continue to see content providers having to pay to get access to customer
eyeballs, whether that's through a transit provider, a CDN, or a paid peering
relationship like we see here.

Now - if end-users could chose from several competitive Broadband providers,
then maybe it would have been Comcast paying Netflix in order to provide a
higher quality service to their customers so as to differentiate themselves
from the other ISPs; at the very least a settlement free peering arrangement
would have been much more attractive. It might be interesting to see what the
nature is of paid-peering arrangements with premier content providers like
Netflix are like for ISPs who operate in competitive broadband markets. My
guess is that settlement free peering arrangements, and installation of the
Netflix Open Connect Appliance are more common in those markets.

[1] [http://blog.streamingmedia.com/2014/02/heres-comcast-
netflix...](http://blog.streamingmedia.com/2014/02/heres-comcast-netflix-deal-
structured-numbers.html)

[2]
[http://www.comcast.com/dedicatedinternet/servicelocations/de...](http://www.comcast.com/dedicatedinternet/servicelocations/default.html?SCRedirect=true)

[3] [http://oc.nflxvideo.net/docs/OpenConnect-Deployment-
Guide.pd...](http://oc.nflxvideo.net/docs/OpenConnect-Deployment-Guide.pdf)

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dfc
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