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AT&T Exec Calls Netflix’s Reed Hastings “Arrogant” For Net Neutrality Post

36 points by testrun 13y ago

njyx 13y ago
This is really all about whether or not network providers can flips the switch and charge both sides of the traffic flow for traffic. They are trying to make that switch. Ultimately charging large content sites more is going to spiral into charging all content providers, because behaviors will change, new services will get popular and everybody ends up having to pay on both sides. Netflix is already paying to get traffic from its servers to the peered internet.
DiabloD3 13y ago
I've read Reed Hastings' post on Net Neutrality, and AT&T calling him arrogant... isn't that just proving Reed's point?
- HoochTHX 13y ago
  Yes it is.
- area51org 13y ago
  Hello, Pot? This is kettle. You're black.
adamnemecek 13y ago
> Someone has to pay that cost. You mean like your customers who are already paying you for that?
MAGZine 13y ago
Simplifying a bit here--but essentially, what happened before is that AT&T owned a wire. Two parties wanted to talk to each other over this wire, and so AT&T only charged one party for bi-directional use of that wire. In the past few years, AT&T has said, "we're going to limit how much a single party can transfer on that wire in a month." Now, they're saying "both parties need to pay to use the wire." Again, a bit of a simplification. Ultimately though, nobody should care where the traffic is coming from or where it is going--be it Netflix, Steam, Amazon, or anywhere else. AT&T offered their customers use of a wire, hoped that traffic between backbone peers was equal, and then started to cry when people saturated their connections to a single source. Your customers already paid for delivery on your network--the whole idea of double dipping is ridiculous. UPS doesn't charge amazon because they send a lot of packages--the cost is the burden of one party, and one party only.
- dragonwriter 13y ago
  > Who cares where the traffic is coming from--be it Netflix, Steam, Amazon, or anywhere else. AT&T does. Particularly, AT&T, who has a quite lucrative business selling video content, doesn't really want video content being sold and delivered over their network unless they are getting a payment for it to compensate for the potential loss to their own video content sales from the competition, in addition to getting paid for the bandwidth. There is a reason why this exact scenario with regard to video content and discriminating against competition was highlighted in the Open Internet Order as one of the things it was intended specifically to prevent, and that its the one specific instance of non-neutral policies that immediately became a huge deal when the Order was struck down.
- lucb1e 13y ago
  > UPS doesn't charge amazon because they send a lot of packages Actually they do, and then Amazon charges us. But yeah I get your point, UPS receives money from one side only, which makes the most sense of course.
gnoway 13y ago
"Company with established history of monopoly behavior asserts: monopoly behavior is right, true and good for you."
ryandrake 13y ago
I think AT&T has a point. The cost of all that content streaming is currently being passed on to us ISP customers, no? Imagine if we got our Internet service bill each month, and the costs were itemized based purely on traffic: Your share of... Everyone's Netflix streaming: $40.00 Everyone's porn: $35.00 Everyone's movie pirating: $10.00 Everyone's spam E-mails: $ 7.00 Everyone's web browsing: $ 0.01 TOTAL: $92.01 If your use of the Internet tended to not involve the above, wouldn't you feel a little cheated?
- lern_too_spel 13y ago
  No, I would just pay for less internet connectivity.
  - sliverstorm 13y ago
    Not with the current model. Since it's charged based on allocation rather than usage, in effect people with low usage subsidize those with high usage.
- lucb1e 13y ago
  Here's the thing: I pay company X for a package delivery service from a number of locations to me. Then a while later I discover that company X is charging these locations or otherwise they "cannot guarantee that each packet arrives", and in practice it turns out that often packages without extra payment do indeed get "lost" en route. Sounds weird? Welcome to AT&T Inter-network Package Delivery Service, or AT&T Internet for short.
- wmf 13y ago
  Do you want to switch to metered service? Most people don't, because the value of a predictable bill is higher to them than the savings they'd theoretically get from metered billing.
  - adestefan 13y ago
    But the real fix to this problem actually is metered billing. The ISPs screwed themselves by offering "unlimited" plans to begin with. It's the same thing that happened to the wireless providers.
jmvoodoo 13y ago
If Netflix really wanted to turn this around on AT&T, they would just have different prices based on how much each provider extorted from them. Comcast customers would pay more for Netflix than Cablevision customers. Netflix would pay the tax, then pass the cost onto the customer, but not onto each customer equally. It would then publish this data for all to see.
- pixelcort 13y ago
  Haha this is an awesome last resort. I genuinely hope Net Neutrality wins, but if it doesn't this is a way to re-level the playing field.
  - xur17 13y ago
    This would definitely be interesting, but it would work a lot better if most people had more than one or two internet choices.
- loqi 13y ago
  I've been told that credit card companies simply forbid this sort of thing as part of their contractual agreements with merchants. Comcast appears to have similar leverage, so I imagine they would do likewise.
pixelcort 13y ago
The argument that Netflix non-subscribers would have to pay for the bandwidth of subscribers doesn't make sense: Most ISPs already charge differently for Mbps (speed), GB/mo (quantity), or both. So therefore the cost of the bandwidth is already being applied somewhat fairly amongst different ISP users. If the ISP wants to be more fair, create new tiers of Mbps or GB/mo. Netflix users who like HD could chose a higher Mbps connection, and Netflix users who like to watch more could choose more GB/mo. Because the whole point about Net Neutrality is, once I get an ISP with a certain speed and cap, I expect all internet services to behave similarly within that speed and cap.

36 points by testrun 13y ago

njyx 13y ago

This is really all about whether or not network providers can flips the switch and charge both sides of the traffic flow for traffic. They are trying to make that switch. Ultimately charging large content sites more is going to spiral into charging all content providers, because behaviors will change, new services will get popular and everybody ends up having to pay on both sides. Netflix is already paying to get traffic from its servers to the peered internet.

DiabloD3 13y ago

I've read Reed Hastings' post on Net Neutrality, and AT&T calling him arrogant... isn't that just proving Reed's point?

HoochTHX 13y ago
Yes it is.
area51org 13y ago
Hello, Pot? This is kettle. You're black.

adamnemecek 13y ago

> Someone has to pay that cost. You mean like your customers who are already paying you for that?

MAGZine 13y ago

Simplifying a bit here--but essentially, what happened before is that AT&T owned a wire. Two parties wanted to talk to each other over this wire, and so AT&T only charged one party for bi-directional use of that wire. In the past few years, AT&T has said, "we're going to limit how much a single party can transfer on that wire in a month." Now, they're saying "both parties need to pay to use the wire." Again, a bit of a simplification. Ultimately though, nobody should care where the traffic is coming from or where it is going--be it Netflix, Steam, Amazon, or anywhere else. AT&T offered their customers use of a wire, hoped that traffic between backbone peers was equal, and then started to cry when people saturated their connections to a single source. Your customers already paid for delivery on your network--the whole idea of double dipping is ridiculous. UPS doesn't charge amazon because they send a lot of packages--the cost is the burden of one party, and one party only.

dragonwriter 13y ago
> Who cares where the traffic is coming from--be it Netflix, Steam, Amazon, or anywhere else. AT&T does. Particularly, AT&T, who has a quite lucrative business selling video content, doesn't really want video content being sold and delivered over their network unless they are getting a payment for it to compensate for the potential loss to their own video content sales from the competition, in addition to getting paid for the bandwidth. There is a reason why this exact scenario with regard to video content and discriminating against competition was highlighted in the Open Internet Order as one of the things it was intended specifically to prevent, and that its the one specific instance of non-neutral policies that immediately became a huge deal when the Order was struck down.
lucb1e 13y ago
> UPS doesn't charge amazon because they send a lot of packages Actually they do, and then Amazon charges us. But yeah I get your point, UPS receives money from one side only, which makes the most sense of course.

gnoway 13y ago

"Company with established history of monopoly behavior asserts: monopoly behavior is right, true and good for you."

ryandrake 13y ago

I think AT&T has a point. The cost of all that content streaming is currently being passed on to us ISP customers, no? Imagine if we got our Internet service bill each month, and the costs were itemized based purely on traffic: Your share of... Everyone's Netflix streaming: $40.00 Everyone's porn: $35.00 Everyone's movie pirating: $10.00 Everyone's spam E-mails: $ 7.00 Everyone's web browsing: $ 0.01 TOTAL: $92.01 If your use of the Internet tended to not involve the above, wouldn't you feel a little cheated?

lern_too_spel 13y ago
No, I would just pay for less internet connectivity.
- sliverstorm 13y ago
  Not with the current model. Since it's charged based on allocation rather than usage, in effect people with low usage subsidize those with high usage.
lucb1e 13y ago
Here's the thing: I pay company X for a package delivery service from a number of locations to me. Then a while later I discover that company X is charging these locations or otherwise they "cannot guarantee that each packet arrives", and in practice it turns out that often packages without extra payment do indeed get "lost" en route. Sounds weird? Welcome to AT&T Inter-network Package Delivery Service, or AT&T Internet for short.
wmf 13y ago
Do you want to switch to metered service? Most people don't, because the value of a predictable bill is higher to them than the savings they'd theoretically get from metered billing.
- adestefan 13y ago
  But the real fix to this problem actually is metered billing. The ISPs screwed themselves by offering "unlimited" plans to begin with. It's the same thing that happened to the wireless providers.

jmvoodoo 13y ago

If Netflix really wanted to turn this around on AT&T, they would just have different prices based on how much each provider extorted from them. Comcast customers would pay more for Netflix than Cablevision customers. Netflix would pay the tax, then pass the cost onto the customer, but not onto each customer equally. It would then publish this data for all to see.

pixelcort 13y ago
Haha this is an awesome last resort. I genuinely hope Net Neutrality wins, but if it doesn't this is a way to re-level the playing field.
- xur17 13y ago
  This would definitely be interesting, but it would work a lot better if most people had more than one or two internet choices.
loqi 13y ago
I've been told that credit card companies simply forbid this sort of thing as part of their contractual agreements with merchants. Comcast appears to have similar leverage, so I imagine they would do likewise.

pixelcort 13y ago

The argument that Netflix non-subscribers would have to pay for the bandwidth of subscribers doesn't make sense: Most ISPs already charge differently for Mbps (speed), GB/mo (quantity), or both. So therefore the cost of the bandwidth is already being applied somewhat fairly amongst different ISP users. If the ISP wants to be more fair, create new tiers of Mbps or GB/mo. Netflix users who like HD could chose a higher Mbps connection, and Netflix users who like to watch more could choose more GB/mo. Because the whole point about Net Neutrality is, once I get an ISP with a certain speed and cap, I expect all internet services to behave similarly within that speed and cap.