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I still fail to see why a leaf node internet provider thinks they should be paid for receiving the data their customers have requested. Paying for transits is

by jws 16y ago

I still fail to see why a leaf node internet provider thinks they should be paid for receiving the data their customers have requested. Paying for transits is easy to understand, and in a complicated topology paying for bytes-in as a peer makes sense because they may be transits. For a leaf node network like Comcast, whose customers pay to receive bytes and pay to have their connections installed to then demand payment from producers for supplying those bytes seems unjustified. The author tries to hang this on the relatively higher build out cost per customer Mbps of residential nodes compared large commercial drops, but that is just different businesses. The residential providers already charge many multiples higher for bandwidth, this is just haggling about the multiplier.

cynicalkane 16y ago
? Just because an agreement doesn't make 100% sense to you doesn't mean it can be unilaterally broken!
- jws 16y ago
  Above, I'm not speaking of any particular agreement. For the current Level3-Comcast issue, as I read that "article" they didn't break it, but Level 3 would cause operating conditions that made the existing Comcast contract no longer applicable, so they needed a new agreement of some sort.
  - cynicalkane 16y ago
    It's good that you qualified what you're saying, because the natural assumption is that you are talking about the particular agreement under discussion.
    - jws 16y ago
      Yes, especially when I used the companies as an example. HN: not just news, but a lesson in communication.
tbrownaw 16y ago
I have an internet connection from Comcast. If I only ever connect to other Comcast customers, I should get my connection for free?
- jordan0day 16y ago
  I'm not sure that's at all the argument jws was making. From the customer's point of view, why should they be able to download 100 gigabytes (through Comcast's infrastructure) from an endpoint also within Comcast's network with no problem, but now they can't get any data at all from a level3 endpoint? They're taking up 100 gigs of bandwidth on Comcast's network regardless. Why does level3 have to pay extra to send that customer the bits they've requested?
  - seabee 16y ago
    Why? Because Comcast can make them. Comcast invested in infrastructure which brought subscribers to Netflix. When these subscribers have no alternative (which is apparently the case in many parts of the US) Comcast gets to do all the usual monopoly tricks. "How much is this subscriber worth to you?" Enough to pay, clearly. For comparison, there was a little discussion recently in the UK re: net neutrality. It is unlikely to go anywhere because of the ease of switching ISPs, and the fact that the BBC - probably the biggest bandwidth sucker nationwide - is 'highly unlikely' to pay ISPs for access. If the biggest player won't pay, who will? Business is about extracting value, not recouping costs. Amoral, not benevolent.
    - jordan0day 16y ago
      Well yes, of course a business is going to use any tricks, dirty or otherwise, to get as much money as possible. The fact that Comcast is charging their subscribers for access to "the internet" means they ought to be obligated to take bits from anyone who will provide them. If level3 is saying "A person on your network wants these bits, here they are!", Comcast has an obligation to their customer to deliver them.
  - omegazero 16y ago
lawfulfalafel 16y ago
I still find the fact that level 3 decided to pay comcast the most disturbing. I do not understand the long-term financial benefit of that decision in any way.
- ynniv 16y ago
  They can still send packets to Comcast through a transit provider without paying Comcast. What they can't do is start sending 5 times as much data through their free peering agreement, and the renegotiation involves Level(3) paying Comcast. Obviously they will be paying Comcast less money than they would pay a 3rd party transit provider.
  - blueben 16y ago
    A third party who Comcast would charge to accept their traffic. Let's be honst here; wherever Netflix goes, Comcast is going to chase after them demanding money to handle their traffic.
- dedward 16y ago
  Normally, a retailer pays a wholesaler or producer money to get goods, then re-sells them to end users. Produces set the price, and retail outlets, with a markup, come up with a business strategy ot move that inventory to their customers. Now - look at Wal-mart. They're big enough that they can go back to the producers and say "Hey, by the way, you're going to knock 1% off the price this year or we're going to drop you - and we can say that because YOU need US." Same deal here.
amalcon 16y ago
Nothing about internet routing, including the cost structure, has anything to do with any sort of practicality. It's all politics and bureaucracy. Comcast and Level 3 are basically in the middle of a bureaucratic skirmish; there's nothing more sinister or unusual going on here.
extension 16y ago
Rarely is there a clear rationale for who a middleman should extract their fee from. In practice, it comes down to who is willing to pay to be part of the transaction. Comcast customers pay for internet access, but I doubt that agreement specifies anything about network topology. If L3 wants a special connection, and it's worth more to them than it is to Comcast, then I don't see what's wrong, in principle, with charging for it. Regardless, the net neutrality thing certainly seems bogus. On the other hand, if L3 didn't go on the offensive with PR, they probably would have taken a larger share of the blame from users than they deserve.
Aron 16y ago
It does sound a bit like Kroger charging Kraft to carry their cheese in the stores.. although there have been arrangements like that to improve product placement on shelves (I think). These companies are swapping services. They both benefit from that. If one company thinks they have the power to do so, they can also extract additional payment. It's just a matter of the details on who has that power. Level3 can choose to pay transit providers (which Comcast can underbid), or they can cut off the Netflix streams (which likely pisses off Netflix quite a bit, and certainly cuts their own revenue). I suspect Comcast wins here unless the PR kerfuffle gambit works.

by jws 16y ago

cynicalkane 16y ago

? Just because an agreement doesn't make 100% sense to you doesn't mean it can be unilaterally broken!

jws 16y ago
Above, I'm not speaking of any particular agreement. For the current Level3-Comcast issue, as I read that "article" they didn't break it, but Level 3 would cause operating conditions that made the existing Comcast contract no longer applicable, so they needed a new agreement of some sort.
- cynicalkane 16y ago
  It's good that you qualified what you're saying, because the natural assumption is that you are talking about the particular agreement under discussion.
  - jws 16y ago
    Yes, especially when I used the companies as an example. HN: not just news, but a lesson in communication.

tbrownaw 16y ago

I have an internet connection from Comcast. If I only ever connect to other Comcast customers, I should get my connection for free?

jordan0day 16y ago
I'm not sure that's at all the argument jws was making. From the customer's point of view, why should they be able to download 100 gigabytes (through Comcast's infrastructure) from an endpoint also within Comcast's network with no problem, but now they can't get any data at all from a level3 endpoint? They're taking up 100 gigs of bandwidth on Comcast's network regardless. Why does level3 have to pay extra to send that customer the bits they've requested?
- seabee 16y ago
  Why? Because Comcast can make them. Comcast invested in infrastructure which brought subscribers to Netflix. When these subscribers have no alternative (which is apparently the case in many parts of the US) Comcast gets to do all the usual monopoly tricks. "How much is this subscriber worth to you?" Enough to pay, clearly. For comparison, there was a little discussion recently in the UK re: net neutrality. It is unlikely to go anywhere because of the ease of switching ISPs, and the fact that the BBC - probably the biggest bandwidth sucker nationwide - is 'highly unlikely' to pay ISPs for access. If the biggest player won't pay, who will? Business is about extracting value, not recouping costs. Amoral, not benevolent.
  - jordan0day 16y ago
    Well yes, of course a business is going to use any tricks, dirty or otherwise, to get as much money as possible. The fact that Comcast is charging their subscribers for access to "the internet" means they ought to be obligated to take bits from anyone who will provide them. If level3 is saying "A person on your network wants these bits, here they are!", Comcast has an obligation to their customer to deliver them.
- omegazero 16y ago

lawfulfalafel 16y ago

I still find the fact that level 3 decided to pay comcast the most disturbing. I do not understand the long-term financial benefit of that decision in any way.

ynniv 16y ago
They can still send packets to Comcast through a transit provider without paying Comcast. What they can't do is start sending 5 times as much data through their free peering agreement, and the renegotiation involves Level(3) paying Comcast. Obviously they will be paying Comcast less money than they would pay a 3rd party transit provider.
- blueben 16y ago
  A third party who Comcast would charge to accept their traffic. Let's be honst here; wherever Netflix goes, Comcast is going to chase after them demanding money to handle their traffic.
dedward 16y ago
Normally, a retailer pays a wholesaler or producer money to get goods, then re-sells them to end users. Produces set the price, and retail outlets, with a markup, come up with a business strategy ot move that inventory to their customers. Now - look at Wal-mart. They're big enough that they can go back to the producers and say "Hey, by the way, you're going to knock 1% off the price this year or we're going to drop you - and we can say that because YOU need US." Same deal here.

amalcon 16y ago

Nothing about internet routing, including the cost structure, has anything to do with any sort of practicality. It's all politics and bureaucracy. Comcast and Level 3 are basically in the middle of a bureaucratic skirmish; there's nothing more sinister or unusual going on here.

extension 16y ago

Rarely is there a clear rationale for who a middleman should extract their fee from. In practice, it comes down to who is willing to pay to be part of the transaction. Comcast customers pay for internet access, but I doubt that agreement specifies anything about network topology. If L3 wants a special connection, and it's worth more to them than it is to Comcast, then I don't see what's wrong, in principle, with charging for it. Regardless, the net neutrality thing certainly seems bogus. On the other hand, if L3 didn't go on the offensive with PR, they probably would have taken a larger share of the blame from users than they deserve.

Aron 16y ago

It does sound a bit like Kroger charging Kraft to carry their cheese in the stores.. although there have been arrangements like that to improve product placement on shelves (I think). These companies are swapping services. They both benefit from that. If one company thinks they have the power to do so, they can also extract additional payment. It's just a matter of the details on who has that power. Level3 can choose to pay transit providers (which Comcast can underbid), or they can cut off the Netflix streams (which likely pisses off Netflix quite a bit, and certainly cuts their own revenue). I suspect Comcast wins here unless the PR kerfuffle gambit works.