Comcast/Netflix Dispute

[Sleeping in EQ]

Bob McChesney has been warning people about this sort of thing for years. Alas, no one listens to the academics.

[Paperback Writer]

A few observations from someone inside the walls.

The way I see it is wireless seems to be an indicator of what is going to happen to the wired. The bandwidth of wireless could be increased with adding spectrum or without adding spectrum using new technology (e.g. spatial multiplexing). In either case, there are lots of costs with the infostructure that needs to be replace. Just like there are also lots of costs in replacing copper with fiber. If the demand quickly ramps up then so will the prices.

The key here is cost on the wireless side. As you probably know, wireless spectrum has to be purchased from Uncle Sam, is expensive, and limited. New technology is expensive to roll out. The major providers will leverage the wireline network as much as possible but that will always have some bottlenecks.

Raising prices is always very delicate and often not possbile depending on competition in local markets. The wireless side will be heavily managed. If a packlet hog such a Netflix starts going heavy over the wireless network, the provider will charge the end-user for it - a surchage based on bytes downloaded after a threshold. This is already occurring on the wireline side when it was discovered that in some local areas 2% of the users were responsible for 40% of the wirleline traffic. In many cases, Ma and Pa weren't aware that JR in the basement was downloading every video produced in the San Fernando Valley.

That is already happening. In fact, I have a nice AT&T femtocell ("microcell") in my home now that I got next to nothing with the rebates AT&T was offering. It works pretty well.

Very true about femtocells and shifting the traffic from wireless to wireline. Many folks would be surprised how much wireless traffic is routed through wireline but the choke points are difficult to keep up with. Wireless will continue to struggle to keep up with demand. Steve Jobs is to blame...all those ipad 3G users surfing the internet during Sacrament meeting.

[creekster]

Bob McChesney has been warning people about this sort of thing for years. Alas, no one listens to the academics.

That's because they are needle-necked wankers. We have a thread that proves it.

[Paperback Writer]

Well, if we get abstract for a second, let's say that you could, conceivably, order bottled water to your household pipes, delivered across the city system. If we're paying the city a fee to have access to the pipes and water from them, should the company selling us the bottled water also have to pay a fee to deliver the product?

Ultimately, all of these expenses will get passed along to the consumer.

A good analogy...To take it a bit further. Everyone pays for their water use as long as they have service and the rate is the same for all regardless of the amount of water used. One of your neighbors has a fetish for this new bottled water product. Remember that he pays extra to the bottled water company but the bottled water company doesn't pay anything for the transport of it's product thru the pipes. Now your neighbor builds a series of water fountains in his front yard using this bottled water. Suddenly, the water pressure in your shower isn't what you are accustomed to. You're not happy because you can't get all the shampoo rinsed out of your hair.

The city pipeline is expensive to expand and expansion also takes time. But the pipeline company doesn’t think it’s fair to shoulder the entire cost since it only gets paid per household. Everyone was basically happy before this new bottled water product came along and users started building water fountains in their front yard. The pipeline company’s proposition is to charge the bottled water company a fee to help pay for the expansion of the water pipeline since they are the one’s profiting from it. They also want to manage the water pipeline so everyone has adequate water pressure even if it means the fountains using bottled water won’t be shooting up as high in the air. They are also considering charging a higher fee for those who choose to have water fountains in their front yard regardless of the type of water.

If they are denied the ability to make these types of changes, all customers will potentially lose. The person filling their giant swimming pool will get the same rate of flow as their neighbor who is flushing a toilet. And when the floaties don’t flush all the way down, there will be hell to pay.

[Uncle Ted]

A few observations from someone inside the walls.

Wireless will continue to struggle to keep up with demand. Steve Jobs is to blame...all those ipad 3G users surfing the internet during Sacrament meeting.

If the LDS church would just open its WiFi to its tithe payers...

Given that I do collect a nice paycheck from a large fruit company located in california I do have to say if AT&T wanted an exclusive then they should have been ready to provide the bandwidth. Of course, I don't think either party expected the iPhone to pass up the Blackberry so soon.

In general, yes, wireless will very much continue to struggle to keep up with demand. I doubt that AT&T will be the only wireless provider cap'ing and overage charging data transfer for wireless.

[Uncle Ted]

I could be very wrong about this, but I think this model will only be neccesary for wireless. I don't think the wired broadband providers will need to meter bandwidth. Perhaps for some low end users who don't use broadband very much, but I think the wired providers will always provide a reasonably priced unlimited option.

The wireless networks are going to have to go to this and even with it, I think the next few years could be ugly. I expect the major US wireless providers to start pushing their subscribers to installing femtocells at their homes and push as much of the home based traffic to the end users wired broadband service.

Yep, you are wrong...

AT&T is adding transfer caps to its wired broadband offerings:

AT&T will cap DSL and U-Verse internet, impose overage fees

Ladies and gentlemen, the days of unlimited broadband may be numbered in the United States, and we're not talking wireless this time -- AT&T says it will implement a 150GB monthly cap on landline DSL customers and a 250GB cap on subscribers to U-Verse high speed internet starting on May 2nd. AT&T will also charge overage fees of $10 for every additional 50GB of data, with two grace periods to start out -- in other words, the third month you go over the cap is when you'll get charged. DSLReports says it has confirmation from AT&T that these rates are legitimate, and that letters will go out to customers starting March 18th.

Does anyone know if time warner roadrunner has transfer caps (yet)? Given that BYU sports are now available on ESPN/BYUTV I don't feel an obligation to stay with my current provider any longer.

[Uncle Ted]

Netflix accounts for 29.7% of all information downloaded via the Internet during prime time hours.

This is interesting data but the company that did the research, Sandvine, is the same company that builds internet throttling devices for the large ISPs. Therefore, take this information with a large grain of salt.

[Sizzle]

Netflix accounts for 29.7% of all information downloaded via the Internet during prime time hours.

This is interesting data but the company that did the research, Sandvine, is the same company that builds internet throttling devices for the large ISPs. Therefore, take this information with a large grain of salt.

Where did you get 29%? It looked like 24 to me.

Also, I struggle to think that Spcial Networking sites (Twitter, Facebook, etc) don't rank higher. Yes, the content is small in comparison to say a movie, but with all the pictures and sheer volume, that seems like it would at least rank, no? Also, where would they classify porn? That seems like it should be it's own bucket.

[Uncle Ted]

Where did you get 29%? It looked like 24 to me.

From the body of the article...

Accounting for 29.7% of all information downloaded during peak usage hours by North American broadband-connected households in March, Netflix Inc. received the title in the latest global Internet phenomena report released by Sandvine Corp.

One of the two is a typo.

[beefytee]

Netflix accounts for 29.7% of all information downloaded via the Internet during prime time hours.

This is interesting data but the company that did the research, Sandvine, is the same company that builds internet throttling devices for the large ISPs. Therefore, take this information with a large grain of salt.

I'm not very impressed with the second bar chart. It's organization is terrible. For instance what is considered Http? Facebook certainly falls under http. Does it include or exclude it considering it was separated out. Also most "YouTube" also falls under the "Flash video" category.

[Uncle Ted]

Netflix accused of creating fast lanes “at the expense of competitors”


FCC commissioner revives claims made by Internet service providers.

Ajit Pai of the Federal Communications Commission today accused Netflix of “secur[ing] ‘fast lanes’ for its own content” at the expense of competitors and deploying proprietary caching systems in order to force Internet service providers to use nonstandard equipment.


Pai, one of two Republican commissioners on the five-member commission, made the accusations in a letter to Netflix CEO Reed Hastings. The letter describes Netflix’s support for regulating ISPs as utilities in order to prevent them from charging content providers for “fast lanes” and then accuses Netflix of creating fast lanes for itself. Pai’s letter cites a TechCrunch article from May that quotes Hastings’ support for “strong net neutrality,” but it provides no sources for any of the accusations he made against Netflix. It reads as follows:

Dear Mr. Hastings,


Netflix has been one of the principal advocates for subjecting Internet service providers (ISPs) to public utility regulation under Title II of the Communications Act, arguing that this step is necessary to prevent the development of so-called "fast lanes" on the Internet. "The basic argument," you have said, “is that we're big believers in the free and open Internet."


For this reason, I was surprised to learn of allegations that Netflix has been working to effectively secure "fast lanes" for its own content on ISPs' networks at the expense of its competitors.


Recent press articles report that Netflix, our nation's largest streaming video provider, has chosen not to participate in efforts to develop open standards for streaming video. Moreover, I understand that Netflix has taken—or at least tested—measures that undermine aspects of open standards for streaming video. Specifically, I understand that Netflix has at times changed its streaming protocols where open caching is used, which impedes open caching software from correctly identifying and caching Netflix traffic. Because Netflix traffic constitutes such a substantial percentage of streaming video traffic, measures like this threaten the viability of open standards. In other words, if standards collectively agreed upon by much of the industry cannot identify and correctly route Netflix traffic, those standards ultimately are unlikely to be of much benefit to digital video consumers.


Some have suggested that Netflix has taken these actions because the company is currently installing its own proprietary caching appliances throughout ISPs' networks as part of its Open Connect program. If ISPs were to install open caching appliances throughout their networks, all video content providers—including Netflix—could compete on a level playing field. If, however, ISPs were to install Netflix's proprietary caching appliance instead, Netflix's videos would run the equivalent of a 100-yard dash while its competitors' videos would have to run a marathon.


Because these allegations raise an apparent conflict with Netflix's advocacy for strong net neutrality regulations, I thought that it was important to give you a chance to respond to them directly.


I look forward to receiving a response to this letter by Tuesday, December 16.


Sincerely,


Ajit Pai

[...]
During peak viewing hours, Netflix accounts for about a third of all downstream Internet traffic in North America and 9.5 percent of upstream traffic. Despite agreeing to pay ISPs for network connections, Netflix has asked the FCC to force ISPs to provide the connections for free. Apple and other content providers reportedly pay ISPs for interconnection as well.

http://arstechnica.com/information-t...f-competitors/


The following comment pretty sums up how stoopid the letter from the FCC is:

mkuch90 Smack-Fu Master, in training


I feel this would be like complaining about Microsoft providing servers that run .Net rather than Linux. Netflix provided the servers so it could deliver Netflix performance and caching. The ISPs should be the ones investing in open caching invalidating the necessity of Netflix servers.

Yes, if the ISPs have a problem with NetFlix caching servers which they provide to the ISPs for free then the ISPs should supply their own. They is nothing stopping them from installing their own. The FCC has about as much intelligence collectively as a small soup dish.

The real problem here is the ISPs are saying something like, "Oh sh*t, those NetFlix b*sturds are totally saturating our network with their cheap *ss movies that we sell for 3x the cost. We need to do something about it!!! We could pull fiber or call the FCC. Get the FCC on the phone dammit!

[Katy Lied]

As you probably know, wireless spectrum has to be purchased from Uncle Sam, is expensive, and limited. New technology is expensive to roll out.

Worlds colliding; I worked on the design of the spectrum auction with my grad school advisor, resulting in revenue to the Feds of 100-times more than estimated using other distribution mechanisms. Even if you don't like the idea of the Fed government profiting from spectrum sales, it's more efficient. The best funded concerns get access to the spectrum, women & minorities be damned.

[clackamascoug]

Does anybody know what the full capacity of the Internet is? If Netflix is responsible for 24% of all data, is there an upper limit that could be bottleneck basic browsing in the future? Does it grow locally? How does it grow, and how big can it get?

[Uncle Ted]

Does anybody know what the full capacity of the Internet is? If Netflix is responsible for 24% of all data, is there an upper limit that could be bottleneck basic browsing in the future? Does it grow locally? How does it grow, and how big can it get?

The internet from my perspective is 100Mbps. Of course, we all these damn kids around here watching netflix and downloading their video games it gets pretty slow in the evenings. I am about ready to move in with the Dude to get on his 1Gbps internet.


Edit: To actually answer your question (well, not really) the bottleneck of the internet is the peering points or the places in the network where internet backbone providers exchange traffic. Of course, they are usually using the fastest backbone routers and switches at these points. It is really not possible to add a bigger/faster box because they are usually using the biggest/fastest box already.

Netflix helps saturate the peering exchange points beyond their limitations during peak hours which may make the internet slow for everyone. To help with this problem Netflix hired some very sharp people to come up with a caching server solution full of disks. Netflix puts these content caching servers in the ISP's data centers for free to help reduce the traffic that has to travel via these slow peering exchanges, thus reducing the congestion. In addition, Netflix purchases backbone connections into these ISPs' networks so that upstream traffic doesn't even have to go through the peering exchanges. Nevertheless, the ISPs still complain to the FCC that Netflix is somehow still not playing fair. Never mind the fact that many of these ISPs (e.g. Comcast, TimeWarner, AT&T, etc.) also are in the business of selling content like cable tv and that netflix cuts into that business.

[Paperback Writer]

Yes,The real problem here is the ISPs are saying something like, "Oh sh*t, those NetFlix b*sturds are totally saturating our network with their cheap *ss movies that we sell for 3x the cost. We need to do something about it!!! We could pull fiber or call the FCC. Get the FCC on the phone dammit!

Or they could do both.

The internet from my perspective is 100Mbps. Of course, we all these damn kids around here watching netflix and downloading their video games it gets pretty slow in the evenings. I am about ready to move in with the Dude to get on his 1Gbps internet.

AT&T Gigapower should be coming to your neck of the woods soon - I remember it being on the list. I'm waiting as well since I have the same problem under my roof. I'd ask to move in with the Dude as well but he wouldn't let me watch Nebraska football in HD.