

How can ISPs need more money for service when Netflix charges only $7.99? - t3hSpork

So here is my thought: Lets take, as an example,a group of people who get Netflix.  Those same people use CheapBastardISP.  Those customers pay $50 a month for broadband. They use that broadband to connect to Netflix and download movies.  The ISP screams that their customers are using too much bandwidth and Netflix needs to pay them more.... this makes no sense. The customer uses the ISP&#x27;s pipe and Netflix pipe to download the movie. If Netflix can pay for that amount of bandwidth use when customers pay $8, why cant the ISPs handle that amount of bandwidth on $50?<p>I seriously do not think that Netflix takes up more than 1&#x2F;6th of the  total internet use of all their customers on average.
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feld
Bandwidth isn't cheap if you're away from a large metropolitan area. Our
prices are somewhere near $3k per gigabit circuit, but you can do 10gbit for
like $6k. Cogent and HE are dirt cheap if you can get them, but Cogent is
garbage and HE isn't always available.

Netflix is a serious strain on our networks. It only takes 75 subscribers
streaming HD concurrently to eat 500mbit. Do the math. 75*$6=$600, but our
cost on that bandwidth is $1500?

It hurts. Don't blame the ISPs though. The entire ecosystem is designed to
screw anyone who can't get multiple 40gbit+ circuits.

edit: had netflix at $7 not $8

Might I also add that a year and a half ago we were still paying $2000 for a
T3?

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staunch
How about we blame the metro ISPs and not the rural ones? The 80% of Americans
that live in cities should _all_ have world-class internet the way people in
Tokyo and Helsinki do.

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pwg
Lack of true competition.

ISP's have little true competition anymore against other ISPs, so there is
very little competitive pressure to force prices down to the actual costs plus
a small margin.

Or, to put it another way, the ISP can charge $50 just because it can.

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sergiotapia
Because there is no competition. They are the only ones with the basketball
court and the basketball to boot. Cities have tried to implement their own
internet only for them to whine "anticompetitive!" and then increase their
prices $10.

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ig1
Because last mile bandwidth has significantly different economics to data
centre and interchange bandwidth economics.

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NameNickHN
The reason is greed and the means is extortion. They have the ability to slow
down traffic if a service isn't paying up and that gives them the tool.

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minimaxir
You're comparing apples and oranges.

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t3hSpork
I'd like to know how. I am confused. :) it just seems to me that Netflix pays
for bandwidth and so does the ISP. And bandwidth use is what is at question
here because its what the ISP is complaining customers use too much of.

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logn
Because the ISPs oversell their actual bandwidth on the hope that no one
actually uses all of it at the same time. It's like how an airline might
overbook a flight expecting a few people to not show up. Then Netflix comes
along and everyone can very easily max out their bandwidth simultaneously all
streaming movies in the evening.

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dlhavema
I can see this as a valid point, but netflix has been around for years now.
surely they still can't still be using the same thought process..

airlines get burned anytime they oversell and everyone does show up, they give
out flight vouchers, hotel rooms, meal tickets all on top of another flight a
few hours later or the next day..

