

Verizon inks paid peering deal with Netflix - jfaat
http://gigaom.com/2014/04/28/verizon-inks-paid-peering-deal-with-netflix/

======
cheald
Gosh, it's almost like Cogent being Netflix's former transit provider to
Comcast and Verizon is the common link or something.

I can't wait to see people freak out about and completely misunderstand this
one, too, though.

It's interesting that Netflix is continuing to ink these deals while waging a
PR war against the people they're contracting with, rather than just backing
Cogent's play. If they're really concerned about this kind of thing, then it
kinda seems like inking the deal and then complaining about it puts them in a
really morally indefensible position, unless they're just counting on public
hatred of the telecoms to carry them to an advantageous position.

~~~
23david
IMO, Netflix management caving in here, while at the same time RAISING prices,
shows just how strong their management feels their market position is. Hello
monopoly.

It may be non-intuitive, but this kind of 'tax' is actually to Netflix's
benefit. From now on, it'll be much more expensive and difficult for any other
competitors to enter the on-demand video market. Regulation/taxes often help
solidify the status-quo. Look at the healthcare/finance/education
industries...

~~~
cheald
It is absolutely to Netflix's benefit. Their negotiated rate per megabyte
delivered is almost certainly substantially lower than a competitor would be
able to manage on market-rate transit.

This move doesn't raise rates for competitors, but it certainly goes give
Netflix an financial advantage that a non-established player wouldn't be able
to gain.

------
drawkbox
Netflix previous to this had considerable power to stop the tiered internet
but they actually are defining the moment it separates. Netflix's history will
include fueling the demise of network neutrality.

Fool me once...

At their stage, they are taking advantage of their place in the short term and
this benefits them heavily while playing the PR side against it. But in the
end they may have figured their own downfall when they don't own their own
network and can't compete with comcast, verizon, cox, etc's own streaming
networks which will have all the cable channels as well as other content.

They could have changed law with only lobbying the consumer, now it will cost
them and everyone. It might be hard to imagine but the moment someone streams
live sports and hbo the game changes dramatically. Would have been nice to
have network neutrality last longer than 2 decades on the internet, it is
over.

~~~
insaneirish
> Netflix previous to this had considerable power to stop the tiered internet
> but they actually are defining the moment it separates. Netflix's history
> will include fueling the demise of network neutrality.

Hyperbole much? This is a peering agreement. It has nothing to do with
"network neutrality"\--a phrase that is vague and hollow enough to mean
absolutely nothing.

~~~
davorak
> It has nothing to do with "network neutrality"\--a phrase that is vague and
> hollow enough to mean absolutely nothing.

The definition that google gives when searching for "define network
neutrality" matched my understanding and does not seem vague:

"the principle that Internet service providers should enable access to all
content and applications regardless of the source, and without favoring or
blocking particular products or websites."

~~~
mbreese
But note, it doesn't say that ISPs have to have the same size pipe to all
peers. Which was the problem in this case... Comcast, et al. didn't want to
upgrade their Cogent links to handle the required traffic from Netflix.
_Everyone_ sending Comcast traffic through Cogent was equally penalized during
prime time hours. You can argue it's poor network management, but it is still
"neutral".

~~~
davorak
> Comcast, et al. didn't want to upgrade their Cogent links to handle the
> required traffic from Netflix. Everyone sending Comcast traffic through
> Cogent was equally penalized during prime time hours. You can argue it's
> poor network management, but it is still "neutral".

That is my understanding. My comment was just pointing out that "net
neutrality" is not considered a vague term by a considerable number of people.

I do think it is unfortunate that Netflix is incentivized to make this type of
deal rather then their ISP.

~~~
insaneirish
It doesn't matter that it has a definition. The so-called definition just adds
to the ambiguity. The Internet is a very complicated thing and getting your
packets from A to B is a technical and contractual miracle. What does it mean
to treat all packets equally? If I have "equal" connectivity to content
sources X and Y, but X sends 10 times the amount of traffic that can fit in
its pipe, it's very "neutral" of me to do nothing about it. And then the
experience sucks for everyone.

~~~
davorak
>What does it mean to treat all packets equally?

The definition that google gives and I quoted does not not contain that
phrase.

> If I have "equal" connectivity to content sources X and Y, but X sends 10
> times the amount of traffic that can fit in its pipe, it's very "neutral" of
> me to do nothing about it. And then the experience sucks for everyone.

The ISP has the option to charge more per packet until it makes economical
sense. The increased revenue would allow the ISP to increase infrastructure
and incentivizes heavy users to reduce their use. That is one of at least a
few options ISPs have while remaining net neutral.

~~~
insaneirish
This is what happened! Verizon and Comcast are charging Netflix more!

~~~
davorak
I thought Cogent was netflix ISP. So it does not seem like their ISP is
charging them more.

------
necubi
Note that these deals, while potentially objectionable, don't violate net
neutrality as it's commonly understood. The key difference is that they
involve the transit _between_ Netflix and Verizon/Comcast, rather than
_within_ Verizon/Comcast.

It would be violating net neutrality if they were deliberately slowing down
Netflix traffic within their networks, rather than offering to peer (provide a
more direct or higher-bandwidth connection) with Netflix's transit partner.

~~~
wmf
It appears to me that Comcast was deliberately refusing to upgrade transit
links to harm Netflix; whether it's within their network or on the edge seems
like an irrelevant detail.

I don't understand why the definition of net neutrality should be frozen,
leaving companies free to invent new loopholes.

~~~
necubi
Netflix always has another recourse in this situation: they could use a
transit provider (like L3) that Comcast already peers with. Evidently they've
decided that paying Comcast is cheaper than paying L3. If Comcast were
deliberately slowing down their traffic there would be nothing they could do
besides paying.

~~~
dublinben
It seems like pretty much all of Comcast's interconnects are full or nearly
full. Netflix could not send their traffic through any (or all) transit
providers even if they wanted to. Comcast is playing hardball to force content
providers to make these kind of direct (paid) arrangements.

------
lemoninthebox
AT&T is fixing to do a similar deal too from the looks of it. I have to say, I
see some very, very bitter irony in them doing this while publicly shaming
Comcast over their paid peering arrangement.

So which ISP is next?

