7 ms·

Verizon inks paid peering deal with Netflix

39 points by jfaat 12y ago

cheald 12y ago
Gosh, it's almost like Cogent being Netflix's former transit provider to Comcast and Verizon is the common link or something. I can't wait to see people freak out about and completely misunderstand this one, too, though. It's interesting that Netflix is continuing to ink these deals while waging a PR war against the people they're contracting with, rather than just backing Cogent's play. If they're really concerned about this kind of thing, then it kinda seems like inking the deal and then complaining about it puts them in a really morally indefensible position, unless they're just counting on public hatred of the telecoms to carry them to an advantageous position.
- mindslight 12y ago
  > unless they're just counting on public hatred of the telecoms to carry them to an advantageous position. Pretty much. They've made plain their envisioned future, and now they're haggling over the price. Netflix as a company doesn't actually need or want net neutrality, because free communications based on alternative protocols will undermine their lucrative position as the new hip entertainment provider. If you're giving Netflix money then you are responsible for helping to centralize (and thus destroy) the Internet.
  - beedogs 12y ago
    That's cool; I just pirate everything anyway. (Don't worry, I live in Australia, where it's morally justifiable and usually the only option.)
    - redorb 12y ago
      Is stealing - if that is how one might see it.. ever justified besides for survival? There is always the option to not partake in things not available in your region. I mean it's ok to feel justified personally - but I wouldn't.
      - te_chris 12y ago
        GoT the day it's released really is THAT necessary. Twitter is just unbearable otherwise....
- sheetjs 12y ago
  It seems as if Netflix is more threatened by competitors like HBO Go and Hulu and Amazon Video than by the telecoms, so deals like this give Netflix an edge over other upstarts
- edraferi 12y ago
  They have to do something as an interim solution to keep the service working. Hopefully Comcast et al will get smacked down regardless.
  - cheald 12y ago
    They could purchase transit from someone that isn't Cogent. It would be more expensive than what they're paying the ISPs, but I rather doubt they'd be talking about "tolls" in that case, because everyone that originates traffic on the internet pays for transit. That's been one of my primary issues with Netflix's behavior in this whole thing. They've presented this false dichotemy of "we pay the ISPs protection money, or we can't deliver our bits to you :(", and it's just...not true. Here's a list of everyone that peers with Comcast. You might notice that the list is larger than "Cogent and Netflix": http://bgp.he.net/AS7922#_peers http://bgp.he.net/AS7922#_peers
    - wmf 12y ago
      Do you think that would help? I don't. When Netflix was using Tata, the Tata-Comcast links also got congested. Even if Netflix spread their traffic across all the backbones, I suspect Comcast would just refuse to upgrade all those transit connections.
      - cheald 12y ago
        Yes, actually, I do think it would help. Perhaps not in the short term, but let me explain what I mean. Comcast isn't specifically throttling Netflix, they're just not providing sufficient link capacity for primetime delivery of traffic (including Netflix) via some routes. Netflix could provide traffic across alternate (or multiple alternate) routes; as those saturate (particularly with the emergence of 4k streaming), Comcast's service as a whole would suffer. Anyone who was delivering traffic via Cogent to Comcast could attest to how awful their delivery was during primetime; if that were happening on multiple links, it wouldn't just be Netflix and a few other services that were slow, it would be the entire internet, from the perspective of the Comcast customer. This would serve to exert pressure on Comcast to upgrade those links. It's not a pretty solution, but the issue isn't "Netflix is throttled", the issue is "Comcast is a shitty ISP", and Netflix peering with them directly does nothing to solve that. Degrading multiple routes will exert more pressure on Comcast to improve than just about anything short of Google Fiber moving in next door.
- higherpurpose 12y ago
  Look what ISP's have been doing to Netflix lately to force them to pay: http://knowmore.washingtonpost.com/2014/04/25/this-hilarious-graph-of-netflix-speeds-shows-the-importance-of-net-neutrality/ http://knowmore.washingtonpost.com/2014/04/25/this-hilarious... It's really a shame Netflix just gave up instead of fighting them, though.
  - cheald 12y ago
    You're looking at a correlation and presuming a cause because it supports your presuppositions. Looking at those graphs, I notice two interesting things. First, Comcast, Verizon, and AT&T all experience downward trends starting around Q4 2013...which is right around when Netflix rolled out SuperHD to everyone (which would have increased throughput, and exacerbated saturated links.) Their trends roughly track each other...and the remaining ones tick upward when Netflix started routing directly to Comcast. Now that's curious (anyone care to traceroute Netflix's streaming edges from an ATT uverse connection?) Second, there are two ISPs on that chart which don't have throughput issues. Cox delivers Netflix via XO, I don't know about Cablevision. Did they just miss the Evil Memo or something? Or perhaps there is a fundamentally different issue at play here other than thugs demanding protection money?
- 23david 12y ago
  IMO, Netflix management caving in here, while at the same time RAISING prices, shows just how strong their management feels their market position is. Hello monopoly. It may be non-intuitive, but this kind of 'tax' is actually to Netflix's benefit. From now on, it'll be much more expensive and difficult for any other competitors to enter the on-demand video market. Regulation/taxes often help solidify the status-quo. Look at the healthcare/finance/education industries...
  - dbarlett 12y ago
    Warren Buffett calls it an "economic moat". http://www.investopedia.com/ask/answers/05/economicmoat.asp http://www.investopedia.com/ask/answers/05/economicmoat.asp
  - cheald 12y ago
    It is absolutely to Netflix's benefit. Their negotiated rate per megabyte delivered is almost certainly substantially lower than a competitor would be able to manage on market-rate transit. This move doesn't raise rates for competitors, but it certainly goes give Netflix an financial advantage that a non-established player wouldn't be able to gain.
necubi 12y ago
Note that these deals, while potentially objectionable, don't violate net neutrality as it's commonly understood. The key difference is that they involve the transit between Netflix and Verizon/Comcast, rather than within Verizon/Comcast. It would be violating net neutrality if they were deliberately slowing down Netflix traffic within their networks, rather than offering to peer (provide a more direct or higher-bandwidth connection) with Netflix's transit partner.
- wmf 12y ago
  It appears to me that Comcast was deliberately refusing to upgrade transit links to harm Netflix; whether it's within their network or on the edge seems like an irrelevant detail. I don't understand why the definition of net neutrality should be frozen, leaving companies free to invent new loopholes.
  - cheald 12y ago
    That requires a rather short view of history. Comcast was refusing to upgrade its transit links because it's been in dispute with Cogent over the terms of their peering. Verizon, likewise, has been in dispute with Cogent over similar terms. Cogent has been in disputes with a bunch of other people over the past 15 years or so, as well, over more or less the same thing. This is not new or unique to Netflix. Netflix is just the most visible casualty because their total traffic load is such a substantial chunk of the total.
  - necubi 12y ago
    Netflix always has another recourse in this situation: they could use a transit provider (like L3) that Comcast already peers with. Evidently they've decided that paying Comcast is cheaper than paying L3. If Comcast were deliberately slowing down their traffic there would be nothing they could do besides paying.
    - dublinben 12y ago
      It seems like pretty much all of Comcast's interconnects are full or nearly full. Netflix could not send their traffic through any (or all) transit providers even if they wanted to. Comcast is playing hardball to force content providers to make these kind of direct (paid) arrangements.
drawkbox 12y ago
Netflix previous to this had considerable power to stop the tiered internet but they actually are defining the moment it separates. Netflix's history will include fueling the demise of network neutrality. Fool me once... At their stage, they are taking advantage of their place in the short term and this benefits them heavily while playing the PR side against it. But in the end they may have figured their own downfall when they don't own their own network and can't compete with comcast, verizon, cox, etc's own streaming networks which will have all the cable channels as well as other content. They could have changed law with only lobbying the consumer, now it will cost them and everyone. It might be hard to imagine but the moment someone streams live sports and hbo the game changes dramatically. Would have been nice to have network neutrality last longer than 2 decades on the internet, it is over.
- insaneirish 12y ago
  > Netflix previous to this had considerable power to stop the tiered internet but they actually are defining the moment it separates. Netflix's history will include fueling the demise of network neutrality. Hyperbole much? This is a peering agreement. It has nothing to do with "network neutrality"--a phrase that is vague and hollow enough to mean absolutely nothing.
  - davorak 12y ago
    > It has nothing to do with "network neutrality"--a phrase that is vague and hollow enough to mean absolutely nothing. The definition that google gives when searching for "define network neutrality" matched my understanding and does not seem vague: "the principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites."
    - mbreese 12y ago
      But note, it doesn't say that ISPs have to have the same size pipe to all peers. Which was the problem in this case... Comcast, et al. didn't want to upgrade their Cogent links to handle the required traffic from Netflix. Everyone sending Comcast traffic through Cogent was equally penalized during prime time hours. You can argue it's poor network management, but it is still "neutral".
lemoninthebox 12y ago
AT&T is fixing to do a similar deal too from the looks of it. I have to say, I see some very, very bitter irony in them doing this while publicly shaming Comcast over their paid peering arrangement. So which ISP is next?

39 points by jfaat 12y ago

Gosh, it's almost like Cogent being Netflix's former transit provider to Comcast and Verizon is the common link or something. I can't wait to see people freak out about and completely misunderstand this one, too, though. It's interesting that Netflix is continuing to ink these deals while waging a PR war against the people they're contracting with, rather than just backing Cogent's play. If they're really concerned about this kind of thing, then it kinda seems like inking the deal and then complaining about it puts them in a really morally indefensible position, unless they're just counting on public hatred of the telecoms to carry them to an advantageous position.

mindslight 12y ago
> unless they're just counting on public hatred of the telecoms to carry them to an advantageous position. Pretty much. They've made plain their envisioned future, and now they're haggling over the price. Netflix as a company doesn't actually need or want net neutrality, because free communications based on alternative protocols will undermine their lucrative position as the new hip entertainment provider. If you're giving Netflix money then you are responsible for helping to centralize (and thus destroy) the Internet.
- beedogs 12y ago
  That's cool; I just pirate everything anyway. (Don't worry, I live in Australia, where it's morally justifiable and usually the only option.)
  - redorb 12y ago
    Is stealing - if that is how one might see it.. ever justified besides for survival? There is always the option to not partake in things not available in your region. I mean it's ok to feel justified personally - but I wouldn't.
    - te_chris 12y ago
      GoT the day it's released really is THAT necessary. Twitter is just unbearable otherwise....
sheetjs 12y ago
It seems as if Netflix is more threatened by competitors like HBO Go and Hulu and Amazon Video than by the telecoms, so deals like this give Netflix an edge over other upstarts
edraferi 12y ago
They have to do something as an interim solution to keep the service working. Hopefully Comcast et al will get smacked down regardless.
- cheald 12y ago
  They could purchase transit from someone that isn't Cogent. It would be more expensive than what they're paying the ISPs, but I rather doubt they'd be talking about "tolls" in that case, because everyone that originates traffic on the internet pays for transit. That's been one of my primary issues with Netflix's behavior in this whole thing. They've presented this false dichotemy of "we pay the ISPs protection money, or we can't deliver our bits to you :(", and it's just...not true. Here's a list of everyone that peers with Comcast. You might notice that the list is larger than "Cogent and Netflix": http://bgp.he.net/AS7922#_peers http://bgp.he.net/AS7922#_peers
  - wmf 12y ago
    Do you think that would help? I don't. When Netflix was using Tata, the Tata-Comcast links also got congested. Even if Netflix spread their traffic across all the backbones, I suspect Comcast would just refuse to upgrade all those transit connections.
    - cheald 12y ago
      Yes, actually, I do think it would help. Perhaps not in the short term, but let me explain what I mean. Comcast isn't specifically throttling Netflix, they're just not providing sufficient link capacity for primetime delivery of traffic (including Netflix) via some routes. Netflix could provide traffic across alternate (or multiple alternate) routes; as those saturate (particularly with the emergence of 4k streaming), Comcast's service as a whole would suffer. Anyone who was delivering traffic via Cogent to Comcast could attest to how awful their delivery was during primetime; if that were happening on multiple links, it wouldn't just be Netflix and a few other services that were slow, it would be the entire internet, from the perspective of the Comcast customer. This would serve to exert pressure on Comcast to upgrade those links. It's not a pretty solution, but the issue isn't "Netflix is throttled", the issue is "Comcast is a shitty ISP", and Netflix peering with them directly does nothing to solve that. Degrading multiple routes will exert more pressure on Comcast to improve than just about anything short of Google Fiber moving in next door.
higherpurpose 12y ago
Look what ISP's have been doing to Netflix lately to force them to pay: http://knowmore.washingtonpost.com/2014/04/25/this-hilarious-graph-of-netflix-speeds-shows-the-importance-of-net-neutrality/ http://knowmore.washingtonpost.com/2014/04/25/this-hilarious... It's really a shame Netflix just gave up instead of fighting them, though.
- cheald 12y ago
  You're looking at a correlation and presuming a cause because it supports your presuppositions. Looking at those graphs, I notice two interesting things. First, Comcast, Verizon, and AT&T all experience downward trends starting around Q4 2013...which is right around when Netflix rolled out SuperHD to everyone (which would have increased throughput, and exacerbated saturated links.) Their trends roughly track each other...and the remaining ones tick upward when Netflix started routing directly to Comcast. Now that's curious (anyone care to traceroute Netflix's streaming edges from an ATT uverse connection?) Second, there are two ISPs on that chart which don't have throughput issues. Cox delivers Netflix via XO, I don't know about Cablevision. Did they just miss the Evil Memo or something? Or perhaps there is a fundamentally different issue at play here other than thugs demanding protection money?
23david 12y ago
IMO, Netflix management caving in here, while at the same time RAISING prices, shows just how strong their management feels their market position is. Hello monopoly. It may be non-intuitive, but this kind of 'tax' is actually to Netflix's benefit. From now on, it'll be much more expensive and difficult for any other competitors to enter the on-demand video market. Regulation/taxes often help solidify the status-quo. Look at the healthcare/finance/education industries...
- dbarlett 12y ago
  Warren Buffett calls it an "economic moat". http://www.investopedia.com/ask/answers/05/economicmoat.asp http://www.investopedia.com/ask/answers/05/economicmoat.asp
- cheald 12y ago
  It is absolutely to Netflix's benefit. Their negotiated rate per megabyte delivered is almost certainly substantially lower than a competitor would be able to manage on market-rate transit. This move doesn't raise rates for competitors, but it certainly goes give Netflix an financial advantage that a non-established player wouldn't be able to gain.

necubi 12y ago

Note that these deals, while potentially objectionable, don't violate net neutrality as it's commonly understood. The key difference is that they involve the transit between Netflix and Verizon/Comcast, rather than within Verizon/Comcast. It would be violating net neutrality if they were deliberately slowing down Netflix traffic within their networks, rather than offering to peer (provide a more direct or higher-bandwidth connection) with Netflix's transit partner.

wmf 12y ago
It appears to me that Comcast was deliberately refusing to upgrade transit links to harm Netflix; whether it's within their network or on the edge seems like an irrelevant detail. I don't understand why the definition of net neutrality should be frozen, leaving companies free to invent new loopholes.
- cheald 12y ago
  That requires a rather short view of history. Comcast was refusing to upgrade its transit links because it's been in dispute with Cogent over the terms of their peering. Verizon, likewise, has been in dispute with Cogent over similar terms. Cogent has been in disputes with a bunch of other people over the past 15 years or so, as well, over more or less the same thing. This is not new or unique to Netflix. Netflix is just the most visible casualty because their total traffic load is such a substantial chunk of the total.
- necubi 12y ago
  Netflix always has another recourse in this situation: they could use a transit provider (like L3) that Comcast already peers with. Evidently they've decided that paying Comcast is cheaper than paying L3. If Comcast were deliberately slowing down their traffic there would be nothing they could do besides paying.
  - dublinben 12y ago
    It seems like pretty much all of Comcast's interconnects are full or nearly full. Netflix could not send their traffic through any (or all) transit providers even if they wanted to. Comcast is playing hardball to force content providers to make these kind of direct (paid) arrangements.

drawkbox 12y ago

Netflix previous to this had considerable power to stop the tiered internet but they actually are defining the moment it separates. Netflix's history will include fueling the demise of network neutrality. Fool me once... At their stage, they are taking advantage of their place in the short term and this benefits them heavily while playing the PR side against it. But in the end they may have figured their own downfall when they don't own their own network and can't compete with comcast, verizon, cox, etc's own streaming networks which will have all the cable channels as well as other content. They could have changed law with only lobbying the consumer, now it will cost them and everyone. It might be hard to imagine but the moment someone streams live sports and hbo the game changes dramatically. Would have been nice to have network neutrality last longer than 2 decades on the internet, it is over.

insaneirish 12y ago
> Netflix previous to this had considerable power to stop the tiered internet but they actually are defining the moment it separates. Netflix's history will include fueling the demise of network neutrality. Hyperbole much? This is a peering agreement. It has nothing to do with "network neutrality"--a phrase that is vague and hollow enough to mean absolutely nothing.
- davorak 12y ago
  > It has nothing to do with "network neutrality"--a phrase that is vague and hollow enough to mean absolutely nothing. The definition that google gives when searching for "define network neutrality" matched my understanding and does not seem vague: "the principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites."
  - mbreese 12y ago
    But note, it doesn't say that ISPs have to have the same size pipe to all peers. Which was the problem in this case... Comcast, et al. didn't want to upgrade their Cogent links to handle the required traffic from Netflix. Everyone sending Comcast traffic through Cogent was equally penalized during prime time hours. You can argue it's poor network management, but it is still "neutral".

lemoninthebox 12y ago

AT&T is fixing to do a similar deal too from the looks of it. I have to say, I see some very, very bitter irony in them doing this while publicly shaming Comcast over their paid peering arrangement. So which ISP is next?