
Comcast’s deal with Netflix makes network neutrality obsolete - adidash
http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/23/comcasts-deal-with-netflix-makes-network-neutrality-obsolete/
======
thatthatis
Paraphrasing

> the FCC has no good solutions.

Yes they do, declare broadband to be a common carrier. Force comcast to sell
wholesale access to their retail pipes to other companies who then compete for
the end users. We've seen this show before and have good solutions to the
problem. It's time to treat the Internet as a mature public utility and
regulate it as such, i.e. regulate it to maximize social good

~~~
jedberg
People keep saying this, but you have to dig deeper. Even the content
producers don't want this.

Common carrier means multiple things, but one of them is that it sets a
_floor_ on the price for peering agreements. This means that currently free
peering will have to become paid peering, and no one wants that.

It would actually give more money to the ISPs for something they are already
doing.

~~~
eggnet
You have to carve out the local access portions of the current ISPs into their
own companies. Make those local access providers common carriers.

I think that is roughly what the gp is saying.

~~~
kiallmacinnes
This is what happened in Ireland with traditional phone services and the
infrastructure they depend on.

Eircom split into Eircom Wholesale and Eircom.. The last mile copper and core
network is managed by Eircom Wholesale, while end users subscribe to Eircom.

The wholesale company offers its services to any phone or broadband company,
with published (starting..) price lists. This seems to work well.

In Europe, we also have the notion of Internet Exchanges like INEX, LINX and
AMS-IX. These are non-profits, typically owned by their members, who provide
switching fabric at the major datacenters for ISPs and other internet
companies to exchange traffic - without any per-peer fees. You simply pay a
membership fee typically based on the number and type of ports you want.

This allows even the smallest companies to directly peer with the major ISPs.
INEX requires members establish BGP peering with something like "at least 80%
of other members".. Again, this seems to work well.

~~~
simonh
Sure, but that's Europe where non-profit != communism.

------
modeless
My hope is that the timing of this deal was calculated by Netflix to focus
regulatory scrutiny on the Comcast/Time Warner merger. Netflix can now tell
regulators that even though Comcast and TW don't compete for the same
customers on the consumer side, the sheer size of the combined beast would
make settlement-free peering a thing of the past.

~~~
zeckalpha
Except they do compete for the same customers, no? The merger is with Time
Warner Cable and not Time Warner.

However, even if they did merge with Time Warner, they would still be
competing for the same customers, since Comcast is NBC is Universal.

~~~
mattmaroon
There are probably not many markets in which Time Warner Cable and Comcast
both exist. That's probably what he meant as its been a talking point.

~~~
chimeracoder
> There are probably not many markets in which Time Warner Cable and Comcast
> both exist.

There are exactly zero such markets.

Not approximately. _Exactly_.

[http://dealbook.nytimes.com/2014/02/12/comcast-set-to-
acquir...](http://dealbook.nytimes.com/2014/02/12/comcast-set-to-acquire-time-
warner-cable/)

[http://www.nytimes.com/2014/02/24/opinion/the-comcast-
time-w...](http://www.nytimes.com/2014/02/24/opinion/the-comcast-time-warner-
cable-merger.html)

~~~
dfoolz
This is bullshit. Time Warner (Brighthouse) and Comcast both compete in the
area I live in. Orlando, FL.....

~~~
sureshv
Just because they service the same city doesn't mean they overlap coverage
area. Many RBOC and Cable lines cut across city boundaries. Most of the
boundaries were in place when cities were allowed to grant exclusive franchise
rights to cable providers in order to entice them to provide service.

And although deregulation did away from allowing cities to provide exclusive
rights, very few cable companies are willing to pay to fight the entrenched
interests.

~~~
dfoolz
They overlap... I just switched to Time Warner from Comcast.

------
grandalf
Residential broadband is a business model that depends heavily on successful
bandwidth utilization speculation. However since Netflix is extremely popular
(close to half of all internet traffic in the US), the pattern gets extremely
predictable and so there is little advantage to be had in the core business of
bandwidth arbitrage, since it's being arbitraged "upstream" of residential
ISPs and baked into the larger pipe prices.

If any service becomes sufficiently popular, the price of providing bandwidth
for it to a large subscriber base approaches the characteristics of a
dedicated bandwidth circuit for more and more nodes on the network.

Of course, Comcast is using it's last mile power as leverage, but the core
issue the economics of bandwidth speculation.

~~~
adventured
The best accounting I've seen indicates Netflix is at roughly 1/3 of North
American traffic:

[http://allthingsd.com/20130514/netflix-still-eats-a-third-
of...](http://allthingsd.com/20130514/netflix-still-eats-a-third-of-the-web-
every-night-amazon-hbo-and-hulu-trail-behind/)

Similar to where they were at the year prior:

[http://allthingsd.com/20121107/netflix-has-plenty-of-
competi...](http://allthingsd.com/20121107/netflix-has-plenty-of-competitors-
and-none-of-them-are-close/)

~~~
Retric
It's vary time of day dependent. At 10AM EST Netflix is a much lower
percentage than at 10PM EST.

~~~
6cxs2hd6
> EST

Also EDT. :)

I usually just write ET to mean both. (And CT, MT, PT, etc.)

Yeah I'm being picky. It's a pet peeve. Sorry.

Edit: After a downvote -- actually, I'm not sorry anymore for pointing this
out. Roughly half the year _there is no such thing as EST_. Think that's
picky? Bite me. (Note that I didn't grammar police their use of "vary" instead
of "very".)

------
zanny
I just want to mention the opening quip:

"For the past two decades, the Internet has operated as an unregulated,
competitive free market."

Is just hilarious. Hilariously wrong.

~~~
1stop
The hilarious part to me was that it will continue to be, comcast are a US
provider. So whatever garbage the US ends up calling "the internet" the rest
of the world will still have the internet.

~~~
vertex-four
Except that we won't either, as the media companies (funnily enough, many of
which are tightly tied to US ISPs) and Governments impose filter upon filter
on us.

Tor, i2p, and GNUnet, will be the only places free from censorship, and even
they will be labelled as being for criminals only; why would we want to bypass
the filters, we must be either pirates or paedophiles. We're witnessing the
swift end of the very short-lived era of free information for all over the
next five years.

~~~
1stop
No we aren't, this is just melodrama...

https all the filters stop working.

VPN all the filters stop working.

Use Tor all the filters stop working.

So we aren't allowed to put big billboards up in public with hardcore porn on
them... that is not the end of free speech though, that's just the end of
billboards with hardcore porn on them.

Even if you put all that aside:

[http://en.wikipedia.org/wiki/Internet_censorship#Around_the_...](http://en.wikipedia.org/wiki/Internet_censorship#Around_the_world)

There is a heap of green on that map.

In the next 5 years, I'll still be able to send you whatever information I
like, and I'll still be able to ensure you are the only person who can receive
it, and that no body else will be able to receive it for ~100 or so years
(depending on how encryption develops)...

~~~
penguindev
https sends the certificate in clear text. you most certainly can filter on
the subject. and obviously you can filter by ip. parent post is correct.

~~~
1stop
Okay, you had a weak response to 2 out 4 of my points...

------
pcurve
Those goofy diagrams are wonderfully effective at explaining the situation.

Worth noting is that Cogent is small potato and basically has no leverage. It
barely does $300 mil in revenue. Compared that to most Tier 1 providers which
do $10 bil+.

~~~
_delirium
That's the part that makes me suspect the talk about this harming new
entrants, startups, etc. is overblown. Afaict, the situation for small players
is the same as it's always been: you pay for transit from an ISP with good
connectivity, and you get good connectivity. If you have some colo racks
somewhere with high-quality connectivity, your customers on just about any
network have good access to your content. If not, you find a better colo
facility.

The controversy here seems to be over what happens when you're a massive
player and looking to get your bandwidth for less than typical retail transit
prices. Then it enters the whole game of peering politics, which _has_ changed
considerably over the past 10 years. But if you're a relatively small startup
with some colo racks, I don't see how that game is any more relevant today
than 10 years ago: you still just buy transit. I mean, _I_ personally have no
trouble delivering my modest amount of content to Comcast users, and I've
never paid Comcast.

I do think there is a _general_ barrier to entry on the internet, because
large players (YouTube, etc.) get free transit from peering agreements while
new entrants don't, so any YouTube competitor is at a huge transit-cost
disadvantage to Google. But that's a fundamental problem with the way the
internet backbone has been built out of a mesh of private peering agreements,
ever since it abandoned having a single neutral backbone run as a utility
(originally by the NSF). I think going private was a mistake and benefits both
big players and politically savvy ones, at the expense of new entrants paying
commodity, but that's a (very) big issue to fix at this point. It's not an
issue of "net neutrality", though: the traditional peering system is
inherently non-neutral, not utility-esque.

~~~
the_ancient
You fail to see the big picture, most people do.

This is not unlike government regulation that "exempts" small business....

All this does is put an effective ceiling on a business. You will never be
allowed to grow beyond X with out having to pay your protection money.

This hurts startups because VC and other investors want the business to grow
beyond X and knowing their is an upper limit to the growth will make it very
hard if not impossible to get investment.

~~~
specialp
No it is not that. The internet is largely a collection of privately owned
network that has interconnects where networks meet. At that meeting point you
can either pay for transit on another network, or agree to settlement free
peering if it is mutually agreeable.

Google "Cogent peering dispute" you will see they have had problems with
nearly every tier 1 out there. They sell bandwidth very cheap and then try to
work out settlement free agreements. The problem is their network often times
ends up pushing much more traffic onto the peer than they deliver themselves.

Netflix is a customer of Cogent's and as many customers of them know they
often have disputes. Netflix is large enough now where they can pay at
interconnects for transit and not have to deal with Cogent's oversubscribed
network.

This is not the death of net neutrality. This is how the internet has always
worked. To peer settlement free the networks need to be on near equal terms.
If you are a small business you simply pay someone who has this peering worked
out.

In this instance Comcast is not discriminating against traffic from Netflix in
particular, it is discriminating against a peer network that is not paying
settlement and providing a non mutually beneficial connection. That is
business and is how the internet has always worked since it left the NSF.

~~~
comex
What exactly does "mutually beneficial" mean, though? It doesn't necessarily
mean traffic is flowing in both directions. Theoretically, when Netflix
delivers traffic to residential customers, Netflix benefits through
subscription fees, and the residential ISP benefits in that it is able to
offer a fast internet experience to its paying customers. If it were easy to
switch ISPs, then customers might switch to those with better Netflix
streaming, giving Netflix bargaining power. Unfortunately, not only is it not
easy to switch, but many areas have effective ISP monopolies... and on the
other side, switching from Netflix to competing video services _is_ easy, so
customers are much more likely to punish Netflix than their ISP for bad
interconnection. But that arguably has elements of market distortion to it.

~~~
jjoonathan
Exactly. Cogent isn't shoving a burden onto Comcast because that "burden" is
part of Comcast's value proposition to its customers. Calling it a "burden" is
like saying that Zappos is placing a burden on UPS and should pay above the
standard rate to have their product delivered.

Of course, UPS doesn't have a monopoly, so they can't get away with that crap.
But they reveal the truth: this is all about leverage.

------
cpeterso
Netflix should pass on the "Comcast tax" to Netflix customers using Comcast.
That might encourage Comcast users to switch ISPs (assuming competing
broadband services are available to those users).

~~~
jonny_eh
It might backfire and encourage Comcast customers to just use their Netflix-
ish xfinity online streaming service (gag me).

~~~
r00fus
I'd like to see someone try. Just read the Comcast "streampix" (wonder where
you got that name, Mr. McDowell?) fine print:

They don't guarantee the same listings, quality or availability, and you have
to have a certain Cable TV subscription level already (i.e., you're already
being gouged).

I posit that Comcast's streaming customers and Netflix customers have very
little overlap.

------
drawkbox
This may actually backfire on Comcast/Cox/TimeWarner/etc's own online
streaming services they will be competing with Netflix on. Netflix hopefully
realizes other providers will come asking for tier access that is faster. So
then taken further, when Cox wants to deliver content beyond just Cox
customers they can't, they'll have to pay. So this will also probably lead to
some mergers into even less providers.

They have just locked provider based online streaming services into a worse
off position in terms of cost to run. Hulu will also be caught in this since
Comcast owns it. Netflix or independents that can get big enough and pay all
the extortion fees will win. It is a whole new game, lots of toll roads.

------
alttab
And then we all grow up and realize that little Johnny can't run his
competition on his competition without paying protection money.

All joking aside, there isn't much you can do. comcast owns the tubes. The
world where they have to bend to the masses is a scary world.

Is this better? I dunno, only if Netflix goes out of business. This only
really shortens comcasts rope long term. They just created a new market with
this strong arm.

Grab your popcorn folks, this is going to get interesting.

~~~
XorNot
There's ample precedent (Bell) for what will happen to Comcast, though the
real issue is so long as US voters put more emphasis on hearing the evangelism
of free markets then seeing the implementation, nothing will change.

What's needed at a low level is laws that provide general access to street-
level conduits and cabinets so competing ISPs (i.e. Google Fibre) can actually
start up competing services to the big providers. Unfortunately efficiency
would demand some level of government subsidy and the chances of that in the
current environment trend towards zero (i.e. it would be way more efficient to
have the government pay for the fibre to the home splice, and then let the big
companies fight it out over who gets to attach a router to that and how that
router is serviced).

~~~
manicdee
That's not a bad model: the last mile is usually the most expensive piece of
any network to install, after all.

The Australian NBN was going to be something along the same lines: Government
installs the common backhaul, last mile and "points of interconnect" then the
corporations can install their points of presence & if required they can
provide their own backhaul too.

Sadly Rupert Murdoch's party has decided that further proliferation of the
very model the NBN was trying to avoid is a better way of spending the money.

~~~
XorNot
Ironically that whole thing is essentially all about NetFlix as well:
Australia with decent broadband would be a tempting market to enter, and would
obliterate Foxtel overnight.

Currently Foxtel also signs all sorts of exclusivity agreements to make sure
no one can offer streaming services for regular TV in Australia either - hence
the mystery of us still receiving American TV shows up to a year after they
finish running in the US. There's a reason we're #1 for torrent piracy.

------
awalton
This is some seriously bad precedence. Perhaps it will be good ammunition for
Netflix to take to regulators, but it's far more likely it's better ammunition
for Comcast to use against Google, Facebook, etc.

I think the best thing that can be done is Netflix giving a complete and full
account of the extortion that happened here, perhaps in front of congress.

------
danielweber
Timothy B Lee is the Rush Limbaugh of Hacker News. Saying things that could
technically happen, in the sense that they wouldn't violate the laws of
physics, in order to get people good and angry.

------
VintageCool
If this is just about a peering agreement, then it didn't start with the
Netflix - Comcast deal. Riot Games signed a peering agreement with some
European providers earlier this year:

[http://www.reddit.com/r/leagueoflegends/comments/1onydr/](http://www.reddit.com/r/leagueoflegends/comments/1onydr/)

------
Loic
For people telling this is just peering agreement, this is not. It would be
peering agreement if Amazon would be paying, because Amazon is providing the
bandwidth to Netflix.

What I suppose is that under this agreement, Netflix is not paying Amazon
anymore outbound bandwidth to Comcast and as such pays it directly to Comcast.

~~~
xcrunner529
EC2 is mostly only used for web hosting and other small infrastructure. Not
the streaming parts, especially now that they are running their own CDN.

------
Executor
Have a local common carrier, but make it a coop where customers and employers
have 1/n voting right. That way you don't have a company with the benefit of a
monopoly and the growth/innovation of the company depends on how much the
majority of people want to pay.

------
bifrost
If you're not a network operator, you probably should not be guessing how the
internet works. I do enjoy some of the speculation (mostly because its
ridiculous) but in general it really doesn't help to guess.

------
nnnnni
Right, because net neutrality is ONLY about Comcast throttling Netflix. ಠ_ಠ

------
jbcurtin2
Just wait until this begins to affect our online gaming sessions.

------
hgilmoredotcom
Article writer - Timothy B. Lee

More than a little coincidental.

~~~
gkoberger
Completely different person than Tim Berners-Lee, despite the similarities.

~~~
JetSpiegel
Yes, this one writes for Ars Technica.

