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Why do you think it would drive down Netflix costs? In old world there were a dozen of "tier1" providers who would all peer with each other more or less settle

by valas 13y ago

Why do you think it would drive down Netflix costs? In old world there were a dozen of "tier1" providers who would all peer with each other more or less settlement free. It is conceivable that one of these providers (I think it was Cogent in this case) was offering "low rates" to take Netflix traffic and deliver that traffic to Comcast over their settlement free peering. As traffic flow between Cogent and Comcast was increasing, Comcast refused to upgrade the interconnect to accommodate the flow. Then: links get hot, traffic gets dropped, customers complain, Netflix+Cogent asks Comcast to behave, Comcast offers to unblock the pipes via direct Netflix<->Comcast peering for a "fee". Now I don't know whether that "low rate" that Cogent was charging Netflix was lower than a "fee" that Comcast is charging. It might be that you are right and the fee overall reduced Netflix costs. What I do know however, is that Comcast is a monopoly and if unregulated, they can start extracting higher and higher rent from Netflix (or any other content provider for that sake).

ffk 13y ago
I agree. I am not arguing that Comcast should be allowed to go unregulated either. I strongly support net neutrality and do not want to see it thrown under the bus. Assuming it wasn't harmed is also speculation and we should definitely be concerned about the deal and what it means for net neutrality.
jauer 13y ago
The contention was that the change in traffic caused by the Netflix flows put Comcast & Cogent's peering out of balance. Generally speaking settlement free peering requires that the arrangement be mutually beneficial. If the traffic exchange becomes inequitable then the side that disproportionately benefits would need to pay to cover it. In this case Cogent was sending vastly more traffic towards Comcast than they were receiving (because of Netflix) so they were the misbehaving party.
- AnIrishDuck 13y ago
  Consumer ISPs always have received more traffic than they send, it's the nature of the service they provide. I'm not sure that the settlement free peering model used by upstream providers makes sense when applied to ISPs. I'll admit my knowledge of peering is minimal, but consumer ISPs have always been something of an anomaly if memory serves. The traffic flow is highly one sided, but peering with consumer ISPs is obviously necessary if you want to actually reach consumers.
  - jauer 13y ago
    Yep, that's loosely accurate for consumer providers but Comcast does more traditional business traffic that one would think. For example, they are the 30th largest provider globally going by the CADIA rankings (http://as-rank.caida.org/?mode0=as-info&mode1=as-table&as=7922&n=160&table-details=full http://as-rank.caida.org/?mode0=as-info&mode1=as-table&as=79...) and have large traffic sources as customers. From the CADIA list this includes Peer1, Dreamhost, SoftLayer, Hivelocity, and Liquid Web. As a eyeball ISP I occasionally get offered cheap transit from hosters looking to balance their traffic ratios. From the CADIA list it seems like Comcast may be doing the opposite.
chipotle_coyote 13y ago
Peering agreements existed in the form they did because of the underlying assumption that traffic would be roughly symmetric. Services like Netflix that send massive amounts of traffic in a single direction violate this assumption. This is one of the underreported issues in the whole net neutrality debate. In the late '90s I worked in the WAN engineering group doing capacity planning at a big regional CLEC, which actually was a Tier 1 backbone provider. It was widely assumed in the industry that the flat rate pricing model -- pay $X for Y "guaranteed" bandwidth -- was living on borrowed time and would be replaced by actual usage-based pricing, paying for packets like you pay for gallons of water. The flat rate model only worked because we generally could keep available capacity well ahead of demand. We could do that because we were adding customers like crazy, and customers sucking down high bandwidth were outliers. If those prerequisites ever changed we'd be screwed. Well, here we are in 2014 and ISPs like Comcast are not adding customers like crazy anymore, because most of the people who want high-speed data from them already have it. But the customers they do have are, on a per capita basis, using much more bandwidth now than they were five years ago. And this is only going to get worse. The nightmare scenario is basically upon us: capacity requirements are climbing faster than ever, but those requirements are no longer being driven by customer acquisition. Which means either the ISPs eat the cost of upgrading their infrastructure (ha!) -- or they raise rates. But wait, doesn't Netflix pay for all their bandwidth already? Well, probably not: unless industry practices have changed drastically, even those backbone trunks are actually oversubscribed. If you pay for (say) a DS3 line, there's an implicit assumption that you are not going to be pumping 44.736 Mbit/s through it 24/7. Netflix breaks that assumption. I don't know quite what the solution here is, and I certainly don't want the kind of dystopian "the ISP only gives you access to web sites that you pay for" future the sharpest critics paint. But I don't see this as a step toward that dystopian future. What I see it as is the ISPs trying to figure out how to work usage into pricing models without saying "screw it" and actually adopting a usage-based pricing model.
- noclip 13y ago
  If you pay for (say) a DS3 line, there's an implicit assumption that you are not going to be pumping 44.736 Mbit/s through it 24/7. Whoa, whoa, whoa. This is exactly the assumption commercial customers paying for unmetered links are making, otherwise they wouldn't be paying for unmetered links. Not being oversubscribed is supposed to the entire point. If ISPs' business models depend on them being able to break their promises to customers paying for continuously saturated links that's their problem, but they're still on the hook for what they're being paid to provide.
Spooky23 13y ago
I work in a totally different environment -- a very large enterprise IT environment with 200k+ users and probably 2,000 physical locations. When we do business with cloud providers or other third parties, we usually start with internet based access. When the relationship gets bigger or needs to serve a large portion of our base, we typically either peer with that provider (in the case of big cloud providers like Amazon, Microsoft, etc) or establish dedicated connectivity between our networks. I think Comcast, Verizon, TWC, etc has a point here -- as a relationship grows with another party, you should have a more robust connection. Netflix hasn't wanted to do that -- it prefers to use a shitty ISP (Cogent) for cheap, and augment it by co-locating content on end-user ISP networks for free. Services like Netflix and Youtube stretch the net-neutrality argument, because they aren't good citizens. That said, the end-user ISPs cannot be allowed to discriminate, which their monopoly power will almost certainly enable them to do.

by valas 13y ago

ffk 13y ago

I agree. I am not arguing that Comcast should be allowed to go unregulated either. I strongly support net neutrality and do not want to see it thrown under the bus. Assuming it wasn't harmed is also speculation and we should definitely be concerned about the deal and what it means for net neutrality.

jauer 13y ago

The contention was that the change in traffic caused by the Netflix flows put Comcast & Cogent's peering out of balance. Generally speaking settlement free peering requires that the arrangement be mutually beneficial. If the traffic exchange becomes inequitable then the side that disproportionately benefits would need to pay to cover it. In this case Cogent was sending vastly more traffic towards Comcast than they were receiving (because of Netflix) so they were the misbehaving party.

AnIrishDuck 13y ago
Consumer ISPs always have received more traffic than they send, it's the nature of the service they provide. I'm not sure that the settlement free peering model used by upstream providers makes sense when applied to ISPs. I'll admit my knowledge of peering is minimal, but consumer ISPs have always been something of an anomaly if memory serves. The traffic flow is highly one sided, but peering with consumer ISPs is obviously necessary if you want to actually reach consumers.
- jauer 13y ago
  Yep, that's loosely accurate for consumer providers but Comcast does more traditional business traffic that one would think. For example, they are the 30th largest provider globally going by the CADIA rankings (http://as-rank.caida.org/?mode0=as-info&mode1=as-table&as=7922&n=160&table-details=full http://as-rank.caida.org/?mode0=as-info&mode1=as-table&as=79...) and have large traffic sources as customers. From the CADIA list this includes Peer1, Dreamhost, SoftLayer, Hivelocity, and Liquid Web. As a eyeball ISP I occasionally get offered cheap transit from hosters looking to balance their traffic ratios. From the CADIA list it seems like Comcast may be doing the opposite.

chipotle_coyote 13y ago

Peering agreements existed in the form they did because of the underlying assumption that traffic would be roughly symmetric. Services like Netflix that send massive amounts of traffic in a single direction violate this assumption. This is one of the underreported issues in the whole net neutrality debate. In the late '90s I worked in the WAN engineering group doing capacity planning at a big regional CLEC, which actually was a Tier 1 backbone provider. It was widely assumed in the industry that the flat rate pricing model -- pay $X for Y "guaranteed" bandwidth -- was living on borrowed time and would be replaced by actual usage-based pricing, paying for packets like you pay for gallons of water. The flat rate model only worked because we generally could keep available capacity well ahead of demand. We could do that because we were adding customers like crazy, and customers sucking down high bandwidth were outliers. If those prerequisites ever changed we'd be screwed. Well, here we are in 2014 and ISPs like Comcast are not adding customers like crazy anymore, because most of the people who want high-speed data from them already have it. But the customers they do have are, on a per capita basis, using much more bandwidth now than they were five years ago. And this is only going to get worse. The nightmare scenario is basically upon us: capacity requirements are climbing faster than ever, but those requirements are no longer being driven by customer acquisition. Which means either the ISPs eat the cost of upgrading their infrastructure (ha!) -- or they raise rates. But wait, doesn't Netflix pay for all their bandwidth already? Well, probably not: unless industry practices have changed drastically, even those backbone trunks are actually oversubscribed. If you pay for (say) a DS3 line, there's an implicit assumption that you are not going to be pumping 44.736 Mbit/s through it 24/7. Netflix breaks that assumption. I don't know quite what the solution here is, and I certainly don't want the kind of dystopian "the ISP only gives you access to web sites that you pay for" future the sharpest critics paint. But I don't see this as a step toward that dystopian future. What I see it as is the ISPs trying to figure out how to work usage into pricing models without saying "screw it" and actually adopting a usage-based pricing model.

noclip 13y ago
If you pay for (say) a DS3 line, there's an implicit assumption that you are not going to be pumping 44.736 Mbit/s through it 24/7. Whoa, whoa, whoa. This is exactly the assumption commercial customers paying for unmetered links are making, otherwise they wouldn't be paying for unmetered links. Not being oversubscribed is supposed to the entire point. If ISPs' business models depend on them being able to break their promises to customers paying for continuously saturated links that's their problem, but they're still on the hook for what they're being paid to provide.

Spooky23 13y ago

I work in a totally different environment -- a very large enterprise IT environment with 200k+ users and probably 2,000 physical locations. When we do business with cloud providers or other third parties, we usually start with internet based access. When the relationship gets bigger or needs to serve a large portion of our base, we typically either peer with that provider (in the case of big cloud providers like Amazon, Microsoft, etc) or establish dedicated connectivity between our networks. I think Comcast, Verizon, TWC, etc has a point here -- as a relationship grows with another party, you should have a more robust connection. Netflix hasn't wanted to do that -- it prefers to use a shitty ISP (Cogent) for cheap, and augment it by co-locating content on end-user ISP networks for free. Services like Netflix and Youtube stretch the net-neutrality argument, because they aren't good citizens. That said, the end-user ISPs cannot be allowed to discriminate, which their monopoly power will almost certainly enable them to do.