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Netflix replies to Verizon cease and desist letter

• Arjuna 12y ago
  Awesome response to the C&D, via spokesman Jonathan Friedland: "This is about consumers not getting what they paid for from their broadband provider. We are trying to provide more transparency, just like we do with the ISP Speed Index, and Verizon is trying to shut down that discussion."
  • josh2600 12y ago
    Playing Devil's advocate here for a second: If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? That is to say, if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business? I'm not taking the stance that this is correct, only querying as to why the dynamics here are such that we automatically assume Netflix is in the right. Guilt tripping Verizon into adding more routers is a major net positive to Netflix's business. Yes, ISP customers are paying for access but the business reality is that the ARPU per subscriber is decreasing every year at a rate lower than additional subscriber acquisition can sate. As Wall Street demands growth, it has to come from somewhere, and since Carriers are not able to sell consumers additional services (no matter how hard they try), they need to find another set of wallets (content providers). They're not utilities and have a profit motive, right? Again, I'm not saying this is correct, simply trying to add another viewpoint to the conversation.
    • LeoPanthera 12y ago
      Netflix isn't sending their data to customers unsolicited. Customers are requesting that data, through a pipe which they have already paid for. It is unfair for Verizon, or any other ISP, to ask to be paid twice for the same bits. What bits I am asking for, as a customer, shouldn't make a damn bit of difference.
      • sliverstorm 12y ago
        There's two ends to the pipe though. To my understanding, the upstream ends are linked largely thanks to peering, which is based on mutual benefit. At the upstream level, nobody charges other providers because everybody is interacting with everybody- sort of like, "I bought this round, but I know you'll be buying the next" so you don't worry about balancing the books. Then Netflix comes along, chews up 35% of internet traffic, and basically takes a disproportionate piece of the pie. If I've got everything in my head right, this is against the spirit of how peering is supposed to work, and so it doesn't surprise me if spats start to develop upstream. If Verizon is unhappy because they have to develop their last-mile network to meet promised speeds, that's Verizon's problem. But if Verizon is unhappy because the upstream is becoming distorted and they are becoming beholden to just one peer (Netflix) instead of an environment of free, balanced exchange- maybe that's not Verizon's problem.
        • josh2600 12y ago
          Relevant Wiki article: http://en.wikipedia.org/wiki/Tier_1_network http://en.wikipedia.org/wiki/Tier_1_network
        • Karunamon 12y ago
          The only reason we're having this discussion is because it's "one peer". A thought experiment: Let's pretend it's not Netflix for a moment. Let's pretend there's a bunch of competing streaming media services which happen to take up, combined, the same amount of bandwidth that Netflix does. In this case, Verizon would still have the same problem (if you buy that they have a problem at all, which I personally do not), except they couldn't play at being mafiosos, holding one in particular to what would be a protection racket in any other context since the load is the same amount, just distributed among many much smaller players. What would they do in this case? The fact that it's one large company gives them the ease of threate^H^H^H^H^H^H leveragi^H^H^H^H^H^H^H^H negotiating with one entity instead of upgrading their damn network like they're expected to do.
    • djcapelis 12y ago
      If you want to play devil's advocate then let's advocate for all the devils. If Comcast wants to offer their customers video over a traditional cable network, they pay content providers. Why should the Internet be different? Shouldn't ISPs be paying people who provide the content their customers are buying?
      • lukecampbell 12y ago
        I've never thought of it that way. That's a very interesting way to look at it! Isn't netflix driving business up for ISPs? The faster ISP gets business? I could be mistaken though.
        • djcapelis 12y ago
          Aren't content providers always driving up prices for content carriers? Consumers are paying for content delivery and if your business can't deliver the quantity or quality they want and someone switches to your competitors because of it that's your problem.
      • josh2600 12y ago
        I think that the way the cable network works relative to the internet is a historical artifact versus modern parlance. My opinion is that precedent is not actually a guiding factor in how future arrangements should be determined. The Internet is different in many ways, but notably because cable companies aren't doing peering and don't have to deal with the complex settlement of international data trafficking.
      • ganeumann 12y ago
        Remember that when the cable companies started they were competing with over-the-air TV. To convince people to switch to cable, they had to provide something valuable enough to justify the cost. Content was that thing. The reason ISPs can charge both the customers and the content providers is because we have no other choice. Where I live I have a choice of two providers: Comcast or Verizon. My choices are: use one of these two, or have no Internet. Not much of a choice.
    • eisa01 12y ago
      If it wasnt't Netflix, it would be another streaming service or a hundred. The total capacity required would still be the same.
      • josh2600 12y ago
        This is evidently not true. Streaming services are a dime a dozen but their distribution of bit volume is not even. Netflix is far and away the biggest user of bits on the Internet and other streaming services are an order of magnitude smaller. It's possible that if Netflix didn't exist someone would fill that vacancy but it's also possible that the aggregate total volume of bits transferred during streaming would be lower if Netflix did not exist.
    • mudetroit 12y ago
      For a simple reason. Netflix has to pay for enough bandwidth outbound to supply their customers, regardless of anything else. Their customers are also paying for a certain amount of bandwidth. ISPs typically possess less total bandwidth then they sell. The problem is that the typical users usage is rising faster than the ISPs are willing to handle. If I pay for 50Mb/s, and the other end of my communication has enough bandwidth to provide it, then I should be able to get to that speed. As far as I am aware, there has been no accusations that Netflix does not have enough bandwidth to supply their customers, but that the intermediaries have oversold their networks to the point where they cannot deliver on their promises.
    • ljd 12y ago
      An ISP's job is to provide internet access to last mile users, such as ourselves. If they choose to reduce that speed for any reason, or throttle any kind of connection they are entitled to do that but they can't complain when someone else says that is what they are doing. Personally, I think given how much public money has gone into infrastructure and the amount of money I pay in taxes it seems insane for me to first pay for the ISP's infrastructure with taxes then have to pay them again. So while they have a right to throttle, they don't have a right to throttle my connection on infrastructure that they did not pay 100% for. Which probably accounts for the majority of their infrastructure.
      • josh2600 12y ago
        An ISP's job, as a private company, is to maximize shareholder value. The circuit consumers are sold is a "best-effort" connection in stark contrast to, say, a T1, which is a dedicated circuit. It's also very hard to prove that Verizon is throttling, versus, say, simply physically underprovisioning the connection. With respect to public money, I think you've hit the nail on the head. The crux of the Net Neutrality debate, to my mind, is whether these networks are public or private. If they're private, Net Neutrality is bullshit. If they're public, it's obvious. It is in consumer interest for the networks to be public, but the same could be said about the socialization of any number of industries. I'm constantly fascinated by the way folks consider socializing the telecom industry to be incredibly reasonable and socializing, say, the healthcare industry to be insanity. Edit: Maybe I need to tag all of these posts with #DevilsAdvocate to avoid being downvoted into oblivion.
        • toomuchtodo 12y ago
          > I'm constantly fascinated by the way folks consider socializing the telecom industry to be incredibly reasonable and socializing, say, the healthcare industry to be insanity. Can't I want both to be socialized?
          • josh2600 12y ago
            Where do you draw the line? What shouldn't we socialize?
    • dkhenry 12y ago
      This is going under the false assumption that when I bought bandwidth from my ISP they didn't _really_ need to provide me with that bandwidth for realzies. This isn't netflix driving network upgrades this is Verizon customers driving network upgrades. If VZ didn't promise the customers the bandwidth they wouldn't need to upgrade their backhaul to provide it. I mean it would be like Verizon wireless charging apple to connect iPhones to their network because "I phones drive up the amount of data customers consume" How is that viewpoint even remotely considered valid ?
      • lnanek2 12y ago
        Amusingly, I've heard carriers use that justification before for pushing phones other than iPhone. Well, that and Apple demands the largest subsidy of all phones. It's a position Apple can sustain because people walk in to the store and ask for Apple and want nothing else, but the carriers really want competition so they will encourage other phones when they can.
        • asn0 12y ago
          > the carriers really want competition so they will encourage other phones when they can. I've yet to meet any carrier who wants competition, for anything. Their ideal world would be that they would decide which phone the customer can have, what limited service the customer can buy, and how much it is, and take-it-or-leave it. That's how AT&T worked, and every major carrier today is a spin-off from AT&T and still thinks pretty much the same way.
      • josh2600 12y ago
        ... Your wireless network service is best effort. This is why your service provider doesn't have to compensate you for dropped calls or dropped packets or towers with insufficient capacity. The word "promise" is not an accurate reading of the legal concepts at play in bandwidth purchase. Dedicated bandwidth for consumers is expensive and completely unavailable on cellular networks. Verizon also doesn't have to let iPhones connect to their network and only does so because they benefit financially from the relationship. Trust me, putting a device onto a major cellular network in the US is highly political, full of peril and financial alchemy. Source: I do lots of telecom stuff specifically around wireless.
    • dave_sullivan 12y ago
      That's actually a really good point. Ideally, you're right -- if netflix (and internet video in general) drives growth in internet traffic, maybe it isn't fair to require service providers to upgrade their service out of hand. But then I think that rule primarily applies for a free market. I'd argue that internet providers are not currently participating in a free market and it causes real problems. Without a free market... companies need more supervision. I'll put it this way: 2 competing providers. Average internet usage keeps rising exponentially. People want faster internet. The providers either lower prices or upgrade infrastructure. Netflix is not forcing them to do anything. But then it's probably reasonable for Netflix to say "Your connection is crappy because of your internet bandwidth, it's not us..." But hey, consumers can choose. Problem here is... what are their choices? Even just one other company participating in the market that can make a similar offering (eg cable speeds) would change the whole conversation I think. Suddenly they'd be working harder to keep your business (or take you from the competitor) and they'd stop talking about more and more ways of screwing their customer and taking advantage of de facto monopoly status. The incentives are all messed up and it encourages gouging instead of innovation.
      • josh2600 12y ago
        The question is: are the networks public, and therefore conduits for competition, or private, and therefore competitive infrastructure. In some capacity, the networks have to peer to hit all of the IP blocks, but that's pretty much one of the better examples of free market success (although that might be changing) and arguably quite private. In another narrative, the networks were laid with private investment (in many cases partially public funded as well) and so the question is moot (if it's all private money). Are the networks public or private and why can't we decide?
    • stonemetal 12y ago
      >Verizon have to subsidize their costs of business I don't see that argument going very far. Netflix has an ISP and pays for their own bandwidth. Why should they pay twice for their bandwidth? If verizon has a problem with the amount of data their customers are requesting from netflix they could always disallow that or institute data caps etc.
      • sadris 12y ago
        Yep, I still don't understand why land line ISPs don't charge by the MB like cell services do.
    • cgman 12y ago
      It's like automatically charging my website visitors for my server costs because my site became more popular and using more resources. If Verizon doesn't want to upgrade - then they shouldn't. If they lose business because of it well, it's their damn fault.
    • baddox 12y ago
      > If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? If the ISP's customers are making requests to Netflix' servers, then yes.
    • DanBC 12y ago
      Customers should pay for the bandwidth they use. ISPs have been miss-selling Internet connectivity for many years - "UNLIMITED!!" "FAST!!" "CHEAP!!" - and now they ( and their customers) are reaping that harvest.
    • drzaiusapelord 12y ago
      > is it really fair to treat them like every other company? Interesting question. I guess from my perspective I buy broadband from AT&T and they tell me under no uncertain terms that I have a cap at x amount of gigabytes. As a customer I expect to use all of that. >Guilt tripping Verizon into adding more routers is a major net positive to Netflix's business. As a customer it shocks me they aren't doing so. Yesterday it was Netflix, today its every kid with an Xbox1 or PS4 buying games digitally as buying physical media is out of style. What's a typical game nowadays? 20gb? That's the equivalant of many netflix movies right there, all at once. What does tomorrow hold? Why aren't they prepared for this?
      • josh2600 12y ago
        I'll reiterate the problem carriers face that I stated earlier. Customer revenue is decreasing and because the market is saturated they cannot add enough customers to combat the atrophy of revenue. As shareholders expect growth every year, ISPs are forced to look for new revenue streams. If you don't think they should be doing this as a private company, reclassify them as a utility. Otherwise shareholder demand is what gets satisfied. Carriers have very specific equipment amortization patterns in their heads and they are financial models that banks accept. If carriers have to change their amortization patterns (more routers, faster) they have to change their financing which damages the value of the stock. Sure we can do this, but what does "fair" mean here? I'm trying to say that the argument is not as black and white as people make it out to be.
        • drzaiusapelord 12y ago
          >If carriers have to change their amortization patterns (more routers, faster) they have to change their financing which damages the value of the stock. Welcome to the world of business. Change is constant, you can't just tell your customers, "Whoops we didn't plan for that." I also disagree that its as hopeless as you make it out to be (in many nations 100mbps or even 1gbps unlimited internet is trivial to get). They can raise prices on customers, lower caps, throttle netflix users, etc if they're in such financial dire straits. Their competitors will love this as customers will migrate to them. Their competitors may have a more nimble management structure and can provide the data at this level. What I don't get, assuming they really are in dire straits and not trying to monetize artificial scarcity, is why don't they just push out a notice, "Due to network limitations, we are throttling streaming video users to 4mbps which is enough for medium quality 720p streaming. The investment to support 1080p streaming is impossible for us. Love Verizon." Actually, I know why they won't do this, because Comcast will pay for the router upgrades and steal all their customers once they find out. So they go around their customers' backs and try dirty dealings with Netflix and others. These guys being duopolies in most markets (substitute AT&T with Verizon in some states) just decided to not compete and simply change the rules at the FCC, which is pretty much a textbook description of collusion.
    • gumby 12y ago
      > If Netflix is 35% of global internet traffic at peak capacity..., is it really fair to treat them like every other company? Yes it is. If you solve their problems in the general case, then that solution will also work for the next big user, and for the small users as well. If you special-case handling for them, then it will be harder for the next new entrant (who could even be a Netflix-upending upstart) to become established. They do use more resources, there is no question about that, but they also have higher costs to their ISPs. This cost could be mitigated by them running their own internal network and peering directly with other backbone providers (they already do this to some extent). But in an architectural sense that option is available to anyone (in practice, of course, nobody is doing BGP for their home network). If you believe in the original promise of the end to end network (a promise which is currently lying in the street gasping for breath) then you don't want netflix special cased. It's no surprise that Verizon (with POTS roots) and Comcast (hub and spoke cable provider) don't have end-to-end in their DNA, but rather a tollbooth model of the world. It doesn't mean we have to go along with it.
    • sixQuarks 12y ago
      You're looking at this all wrong. It's not that Netflix is taking up 35% of all bandwidth. It's that CONSUMERS are choosing to spend 35% of their consumption on Netflix. The ISPs are punishing consumers for their choices - it's just ridiculous.
      • giovannibajo1 12y ago
        On the other hand, can you swear that Netflix is doing all that it can to minimize bandwidth? There's a conflict of interest: Netflix has a vested interested in provided lightly-compressed, very-high-resolution, bandwidth-hungry movies to its subscribers, especially if it obtains 100% free peering that it demands, as bandwidth would be free for them. On the other hand, ISPs are forced to upgrade network any time Netflix unilaterally decides to increase the bitrate of the movies, without this bringing any benefit to their bottom line. For instance, if Netflix halved the bitrate of all their movies, subscribers will complain, but surely they would be able to deliver them without any buffering to everybody, and at the same time to keep free peering agreement and whatnot; they would go from 35% of total US bandwidth to 17%, and ISPs would be satisfying their customers' choice. So where do you draw the line? Surely Netflix can increase the bitrate at will, at any time; should they be "allowed" to do it any time they want, while keeping a free peering agreement? Should the ISPs be forced to upgrade their network every time?
        • sixQuarks 12y ago
          Fair point. The issue obviously isn't 100% black and white. But what the ISPs are currently doing is not the way to go about it, IMO.
        • sixQuarks 12y ago
          Fair point. The issue obviously isn't 100% black and white. But what the ISPs are currently doing is not the way to go about it, IMO.
        • raarts 12y ago
          > Should the ISPs be forced to upgrade their network every time? Come on, they have been doing this since the internet started. And in the beginning of internet some services were hugely popular as well. Keep in mind that upgrading the network costs money, but once the infrastructure is in place, moving bits is really cheap.
    • drusenko 12y ago
      You're not as far off as you think. It seems very few commenters to this thread understand how the internet actually operates from a business perspective. When you install a server in a colo, you don't get free transit. You find a transit provider (like Level3, Cogent, or NTT) and you pay them for bandwidth. You can understand this very intuitively as most hosting services (like AWS) will charge you for bandwidth. As a service provider (like Weebly), you are paying your own transit provider for a certain amount of bandwidth, and they are covering the costs of delivering that bandwidth to (usually) anybody globally and the costs of maintaining their network. If a network gets large enough, they may often negotiate peering agreements with other networks. So Level3 and Cogent may have a peering agreement, or Level3 and Comcast may have a peering agreement. These are generally set up when two networks deliver roughly the same amount of traffic to each other, or it's considered beneficial to both parties to get the networks closer, and it simplifies the working relationship. These peering agreements can often become contentious when they become imbalanced. Very early on, I remember a fight Cogent and France Telecom had over peering -- FT felt like they were getting the raw end of the deal, and de-peered with Cogent. Cogent refused to pay another transit provider for access to FT's network and so traffic from the Cogent network to FT would drop. They resolved about a week later, with lots of unhappy customers caught in the middle. As you can see, it's simply not the case that (a) service providers never pay for bandwidth because the end-user already pays for bandwidth and (b) peering / free transit is guaranteed. Maybe I'm not understanding the nuances here, but it seems to me like Netflix is taking an ideological stance to hide behind the fact that they are trying to negotiate a better business agreement for themselves.
      • whoopdedo 12y ago
        If there is imbalance between the traffic Comcast is sending to other networks versus what they receive that's because of the policy to forbid residential customers from hosting their own servers. Comcast created this situation because they wanted to force the internet to behave more like television.
        • hga 12y ago
          Exactly. The "equal traffic" concept totally fails for consumer last mile providers. In fact, it's technically more expensive for them to provide symmetrical service due to head end noise, but it also fits with their "you're supposed to consume content, especially ours, not supply it" attitude. The latter is something that more people ought to be thinking about, consumers using Netflix are not just consuming more peak bandwidth, they're competing with the video offerings of all of the big last mile providers. Although. AT&T doesn't actually offer U-verse video service to very many of their subscribers; don't know about Verizon's FiOS vs. plain DSL offerings (except that they're shedding small population states and markets as fast as they can), but the others are cable companies so they obviously do.
    • higherpurpose 12y ago
      My ISP has provided 100 Mbps for years, and has recently brought 1 Gbps fiber. They've never complained about video services or torrents eating away their bandwidth. Guess why? Because when you're able to provide 100-1000 Mbps to each and every customer, the ~5 Mbps required for Netflix streaming is nothing.
    • icambron 12y ago
      >If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? I don't see why not. I think it might make more sense to think of it as streaming video, the category of goods, rather than Netflix, the company. So 35% of global internet traffic is people streaming videos. And who cares that it's video; from Comcast's or Verizon's perspective, it's just an awful lot of bytes. So if the issue is the amount of traffic, it's just Verizon complaining that we're using too much bandwidth (yes, us; we're the ones watching Netflix). I get that's expensive to deliver all those bytes to my home, but that's what precisely what I'm paying for. That a huge number of those bytes comes from the same originator shouldn't enter into it. It's just a site on the internet. EDIT: Also, I wanted to add, that all of the traffic comes from the same source actually helps Verizon from a practical standpoint, since it can solve a lot of it with only a small number of interconnects. Compare to a more fragmented market, where Verizon might have to make specific peering provisions for a bunch of different 5%-market-share content providers to fulfill its customer obligations. > Guilt tripping Verizon into adding more routers is a major net positive to Netflix's business. All sorts of businesses benefit from the ecosystem of other businesses around them. If I run a store in rural Iowa and Acme Co opens a huge factory there, then I stand to make a bunch of money from all these newly employed customers. Should I subsidize Acme? [1] After all, hiring people is expensive. If I open a hardware store near a bunch of planned construction, should I pay those real estate developers? You can expand this to the whole economy being basically just a set of interdependent positive externalities. Maybe Verizon should pay Netflix for making their service more valuable? Or we can use the simpler model, in which you get to charge your customers. Verizon charges us for delivering the content we request. Netflix charges us for the content itself. Cogent (or whomever) charges Netflix for its bandwidth. Everything works. > They're not utilities and have a profit motive, right? They could charge more, and they could even charge per unit bandwidth (or tiered bandwidth) if they wanted. "My business isn't working that well" is not a good excuse to hold your subscribers hostage. You could equally use "Wall Street demands growth!" to defend Comcast's new practice of robbing banks. Imagine I bought a popular TV set in 1980 to watch broadcast content, but after I got it home, the TV maker remotely activated a previously undisclosed filter that would only show certain channels. Then they went to ABC, NBC, and FOX and said, "So guys, you want your content seen? My margins on these TVs keep going down, so somebody's gotta pay." Not cool, right? EDIT: Another point, probably the most important. The "problem" here is ridiculous: it's that demand for Verizon's product (i.e. internet access for end-users) is increasing a lot because it is becoming more useful to its customers. That's what every business wants! "We sell internet access and everyone is now using so much more internet! Whatever shall we do?" The idea that Verizon is up against some sort of profitability wall because of how popular its product is becoming and thus needs to charge the companies responsible for that increased popularity...it's simply not credible. Not sure why I didn't think of this point earlier. Edit: s/Comcast/Verizon, since that's specifically who we're talking about. [1] This actually does happen in the form of tax incentives for companies opening factories. It's a bit messed up.
    • byuu 12y ago
      Yes, because I am paying Verizon to connect me to Netflix. If Netflix's traffic is so high, it's because lots of people want to pay Verizon to connect them to Netflix. If Netflix is so expensive, Verizon would need to raise their prices for customers; possibly offering low-bandwidth customers lower prices. If Verizon wants to give me free internet access, then it would make perfect sense to charge Netflix to deliver to me. Otherwise, Netflix paying large sums to Verizon is only going to ensure that we won't get alternatives to Netflix, because the barrier to entry will be too high for smaller startups. And if bandwidth is the issue, do you think Verizon should pay companies it primarily uploads, but not downloads, to (such as cloud hosting services)? Personally, I'd really love to see Netflix start using encrypted peer-to-peer to distribute the bandwidth. See if Verizon would be willing to cripple all VPN and HTTPS users to try and shake down Netflix.
    • SilasX 12y ago
      I am also frustrated with people who blur a) net neutrality with b) monopolies/undercapacity issues, and so I agree that people should not be so quick to demand ISP-paid extra capacity as solutions to this, especially on grounds of net neutrality. However, I don't think it follows that Netflix must be treated any differently. The customers are the ones requesting the data. To the extent that anyone (once at capacity) should bear a cost, it should be the requester -- either through a higher fee or a smaller fraction of the pipe. In practice, that will mean "the more Netflix [or anything] you use, the slower your service". But you shouldn't "short-circuit" the process and just start punishing Netflix's packets directly just for being Netflix. Rather, it should be "this customer endures this cost [broadly defined] for using this much, regardless of what it was for".
      • hga 12y ago
        But net neutrality comes into play because these big last mile providers are also offering their customers video services. That's what cable companies started out doing, after all, and Verizon and to a lessor (much lessor, I gather) extent AT&T have implemented the same business model with their FiOS and U-verse offerings. People getting their video from Netflix threatens this business, and it's pretty obvious to me that's one of the reasons we're seeing all this now, especially with Netflix getting big enough in streaming to a) pose a greater threat b) potentially have a lot of voters on their side (particularly relevant because the last mile providers are all government enabled monopolies, cable companies at the municipality level, telcos at the state and Federal level).
    • brownbat 12y ago
      I'm more concerned about the fact that everyone seems to give priority to speedtest traffic, then abruptly chokes streaming HD. I'd really like Netflix to offer their own speedtest site that looks to the network almost exactly like streaming video, so the ISPs couldn't game the measurements.
      • prutschman 12y ago
        Try http://movies.netflix.com/WiMovie/Example_Short_23.976/70136810 http://movies.netflix.com/WiMovie/Example_Short_23.976/70136...
    • curveship 12y ago
      I've seen this argument about Netflix's oversized traffic slice, but it always seems to me like it should mean the opposite: if Netflix is 35% of the reason people sign up for broadband, isn't Netflix making broadband more valuable? People are willing to pay more for broadband because Netflix makes it worth more to them. So shouldn't the broadband providers be paying Netflix rather than the other way around? You never hear the cable TV providers complaining that a particular channel has gotten too popular. What's different here?
    • criley2 12y ago
      "why does Verizon have to subsidize their costs of business?" Because I, a Verizon customer, have paid to access Netflix. I pay monthly for bandwidth to use as I see fit. It doesn't matter if all of the customers are using their bandwidth to go to one source. It doesn't matter: it's our bandwidth to use how we see fit. It is Verizon's responsibility to provide us with the service that we are paying for. They advertise a service, they market this service, and they charge us for the service: but then fail to deliver on their promises because they're charging someone else too? They sell us capped packages and tell us we have a set amount of data. We cannot exceed the data, because the infrastructure can't take it and we have to pay for our usage. We have to pay for our demand, that's the point of caps. Make the users pay for using. That to me implies that we are paying for a set amount of data! That we are paying for it, not anyone else. We pay for the upgrades that are necessary to deliver data to our homes. That is the point of a subscription. This is like saying: all of the telephone customers are calling Pizza Hut, so Pizza Hut needs to pay the phone company to upgrade the switches at the Phone Company. What??? We've already paid for the infrastructure required to deliver the data we're paying for.
    • drawkbox 12y ago
      Netflix is not using the capacity, they are selling access to the content. The customers are using 35% of the traffic. The customers who pay for access to content they want. Most people want Netflix because it is a sea/wonderland of content and is replacing tv. Netflix is not consuming the content, they are providing it, the customers, who pay for the access, are consuming the content and bandwidth. Content services should not be harmed for being successful. If the bandwidth customers are desiring certain content providers it is the bandwidth providers responsibility to make sure it is available and fast, per their marketing and products.
      • hga 12y ago
        "Most people want Netflix because it is a sea/wonderland of content and is replacing tv." And that's in direct competition with these big last mile providers. Cablecos by definition, and the two big telcos have their own FiOS and U-verse "TV"/"cable" video offerings (even if AT&T's coverage is meager, and both stopped their build outs except for contractual requirements when the Great Recession started). Which provides additional strong motivation to provide less than stellar service when handling Netflix packets.
    • asn0 12y ago
      It's not just Netflix, it's also YouTube (http://www.google.com/get/videoqualityreport/ http://www.google.com/get/videoqualityreport/), and Level3 (http://blog.level3.com/global-connectivity/observations-internet-middleman/ http://blog.level3.com/global-connectivity/observations-inte...) and you can be sure those aren't the exception. Instead of fulfilling their obligations to provide advertised bandwidth to their paying customers (who only pay them in order to access the content provided by someone else), the last-mile providers are using their customers as hostages while they negotiate ransom from the content providers. While they also report record profits (sending their customer's payments back to stockholders instead of into the network), because the economics of their business are compelling on both the consumer side (low expectations, minimal support costs, essentially no competition) and on the technology side (network technologies increase capacity-per-$ as fast or faster than traffic grows). Oh, also, 99% of the last-mile providers operate a sanctioned monopoly that has let them build and grow their networks with essentially guaranteed income from rate-payers and essentially no competition. Hence adding Internet is relatively low-cost and highly-profitable, but apparently not profitable enough.
    • dclowd9901 12y ago
      > That is to say, if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business? Because that's Verizon's business: to provide internet. That's not up to Netflix, who is an internet-based content provider. If Verizon wants to charge the fuck out of their customers to beef up their network so they are the best Netflix streamer out there, then they're free to do that. People want Netflix because Netflix is doing its job. People can't get Netflix because Verizon's not doing its job. Simple as that. To put it another way, if Netflix was the bottleneck (and thus, the problem), Verizon would only have to show that their bandwidth from Netflix is bottlenecked by Netflix' lack of serving capacity. Of course they can't show that, because that's not the case, and thus not the problem.
    • barrynolan 12y ago
      Quick question. When you signed up to your say 20meg broadband contract, did the contract exclude certain services - YouTube, amazon Prime, Netflix?
    • FollowSteph3 12y ago
      What about fedex or ups? The customer is paying for x bandwidth and not getting it.
    • ColinDabritz 12y ago
      Thank you for the position, this comes up regularly, and I love seeing it discussed and dismissed. It's not that Netflix is 35% of global internet traffic. 100% of my ISPs "global bandwidth" should be content of the end users choosing (usually requests). The user is paying for the right to request this content, and have it delivered. Wether its Netflix, gaming, news, poltiics or Zombo.com doesn't enter into it. At 35% though, it might make sense for Netflix to enter the ISP business. This framing is a tool that ISPs and their supporters use to excuse charging twice for the same service, and more importantly, controlling users access to content through discrimination. Thanks again for the writing prompt though.
    • wpietri 12y ago
      Does the devil need any help? Does Verizon's PR department? You might ask yourself why you feel obliged to take the side of an enormously wealthy oligopoly. But to answer your question: I am already paying my ISP to deliver all packets I request to me, up to certain limits that my ISP agreed to when they started my service. If my ISP is failing to live up to that bargain, I'd like to know. Also, the "poor Verizon, helpless in the hands of Wall Street" thing verges on obscene. That they are in a position to shake down people for more money does not justify them doing so. If they don't want to be in the ISP business, they can get out of it. They are also welcome to find new ways to create value. But running a protection racket is not in any way morally defensible.
    • fnordfnordfnord 12y ago
      >why does Verizon have to subsidize their costs of business? Verizon isn't some kind of customer owned co-op. It is a profitable for-profit business that has (over)sold a service. They need to deliver that service, not complain when people use it.
    • valas 12y ago
      Your argument is invalid, because Verizon holds monopoly in many areas for high-speed broadband. I would entertain your argument only if there was consumer choice. In such case we could perhaps experiment with different business models where content provider subsidizes last mile. Without it, consumers are essentially hostage to a monopoly, which is unacceptable.
    • curun1r 12y ago
      Netflix is half the reason why I'm paying Verizon anything. If Netflix is paying for the network, why should any of my money go to Verizon? Well, actually, none of my money goes to Verizon. My provider manages to avoid all warnings from Netflix and the graphs from Google show basically 100% of users getting the HD stream. They give me a legitimate 100mbps symmetric (well, almost: http://www.speedtest.net/my-result/3546047591 http://www.speedtest.net/my-result/3546047591) and I'm paying under $40/mo. If my niche provider can offer that service, Verizon can offer that at scale. The fact that their service is a) worse and b) more expensive means either a) they're less competent in running the business or b) they're overcharging their customers. Either way, I have zero sympathy for them. They're a network provider and people are paying them to connect to the internet. People aren't paying them to connect to the subset of the internet that's willing to pay Verizon. It's already bad enough that TV viewers are seen as the product rather than the customer. Verizon's stance here is, once again, treating their subscribers as a product to be leveraged rather than a customer who's interests matter. That they can do it is due to their mono/duo-poly that keeps customers from having a choice of providers. But that doesn't make it any less offensive. Basically, it boils down to this: if the service costs you more to provide, then charge more to your customers. You can even have a streaming plan that charges customers who stream more than customers who don't. But treating your subscribers as a resource that can be pimped out to all the services on the internet is offensive.
    • korzun 12y ago
      If anything ISP's should be thankful that NetFlix exist. They have subscribers because those subscribers want to use stuff like NetFlix. Take away all the good 'content' and why bother having an ISP? Mobile phone can check emails too.
    • Natsu 12y ago
      > if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business? Verizon is paying to provide its own customers with what they want (speed that enables access to Netflix and other entertainment), not to subsidize Netflix. Netflix pays its for its own high-speed internet access already. Verizon offers high-speed access and then doesn't pay for it. Therein lies the conflict.
    • aaronchriscohen 12y ago
      Just imagine that you had more than one choice of high speed Internet provider (unlike 95% of Americans who are stuck with the one cable company that happened to successfully bribe their local municipality) and think about what would happen to this issue. Competition would force the ISPs to knock this shit off. It's a product of their entrenched geographic monopolies. Period.
    • pdonis 12y ago
      > the business reality is that the ARPU per subscriber is decreasing every year at a rate lower than additional subscriber acquisition can sate...Carriers are not able to sell consumers additional services (no matter how hard they try) In other words, the ISPs are doing a bad job of running their businesses, but rather than do a better job, they want others to pay them more without offering any additional value.
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    • Nursie 12y ago
      >> If Netflix is 35% of global internet traffic at peak capacity (as per the Akamai CEO's comments at a number of events), is it really fair to treat them like every other company? That is to say, if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business? Netflix isn't the driver, the Verizon customers who want to use netflix are the driver. They're paying Verizon to get them access to cool stuff like Netflix. It sounds to me like those customers are not getting the service they expect.
    • espadrine 12y ago
      Some of these issues feel like a grey area to me, such as peering agreements. However, this move from Verizon felt very black and white. Thanks for trying to be Devil's advocate! However, I feel that this issue is one of misrepresentation. Netflix wants Verizon to be a common carrier, and have its revenue increase linearly with the amount of data it transfers. In that case, Verizon would happily increase their revenue by providing actually faster Internet, because customers would pay more per day if they downloaded more per day, since they'd then pay a fixed amount per GigaBit. On the other hand, I don't understand what Verizon wants to be. I feel like the type of company it wants to be is only sustainable in the very short run, highly dependent on other companies such as Netflix, and incapable of good PR because what clients want, and what they subscribe for, is impossible to deliver (the amount of data clients want to transfer is always above whatever they can promise to offer). That market positioning is tolerable for instant Wall Street growth, but it is detrimental to customers, to website owners, to peering partners, and to the long-term future of the company, were a reasonable competitor to enter the market. I also feel there could be a middle ground, such as Verizon asking customers from every city to tip in for a massive city-wide network upgrade. That would be good for PR and customers would happily donate. It seems fitting, because from what I understand, the real money eater is a one-off upgrade; it doesn't increase maintenance costs much, if at all.
    • Terretta 12y ago
      Why add a viewpoint that is not valid? That's like saying climate change deniers have a “valid” viewpoint when you can find 3 crackpots in a sea of 100,000 scientists. You buy an Internet connection from an Internet service provider to consume the Internet. Until the word Internet is dropped from “ISP”, that's the service they sell. They have no more rationale to charge Netflix to “access” Internet service purchasers than they have to charge your grandmother to deliver you her email. And about that profit motive, cable already raises prices at 4x consumer price inflation: “Since the FCC began compiling these reports 19 years ago, the cost of basic, expanded basic and the next-most-popular tier of service have risen at average annual clips of 4.3 percent, 6.1 percent and 5.1 percent, respectively. Inflation has grown at an average annual pace of just 2.4 percent over that time period.” http://www.siliconbeat.com/2014/05/19/pay-tv-prices-continue-to-outpace-inflation/ http://www.siliconbeat.com/2014/05/19/pay-tv-prices-continue...
    • supercanuck 12y ago
      >That is to say, if Netflix is really the sole driver of Network upgrades, why does Verizon have to subsidize their costs of business? Because Netflix has a higher brand affinity and customers of Verizon will be outraged due to what they perceive is shitty customer service buy a quasi monopoly. The consequences is damage to Verizon's business because customers would switch if they could, but they can't. Verizon doesn't HAVE to subsidize Netflix's business but they should if they don't want a legion of pissed off Netflix customers who feel trapped by their ISP.
      • hga 12y ago
        "if they don't want a legion of pissed off Netflix customers who feel trapped by their ISP" This is supremely dangerous to Verizon. Taking the US political area I know best, gun owning households are a majority in the US, but of course those who vote, vote first and foremost on this issue, let alone be politically active are the usual successively smaller fractions of that huge number. And starting in the mid-80s we've been able to move mountains (details on request). The last thing the big incumbent landline last mile providers want is a large percentage of the population getting pissed off and doing the above, voting when they might not otherwise bother, especially in state and local elections, voting on this issue, and becoming politically active on it. I think the incumbents' behavior is so outrageous that this is eventually inevitable, Netflix's PR attack, in part enabled by their being so big, has the potential to substantially move that day of reckoning forward, and is therefore probably the biggest thing to happen in the net neutrality fight since AT&T's Edward Whitacre opened his foolish mouth and really got the issue started 8 years ago.
    • deleted 12y ago
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    • jonknee 12y ago
      > Yes, ISP customers are paying for access but the business reality is that the ARPU per subscriber is decreasing every year at a rate lower than additional subscriber acquisition can sate. ARPU is going up while Verizon's bandwidth costs are going down (peer with Netflix/Google/YouTube/Facebook and a huge chunk of your traffic is taken care of). http://newscenter.verizon.com/corporate/news-articles/2013/07-18-verizon-reports-2013-2q-earnings/ http://newscenter.verizon.com/corporate/news-articles/2013/0... "FiOS revenues grew 14.7 percent, to $2.7 billion in second-quarter 2013, compared with $2.4 billion in second-quarter 2012." vs. "Verizon added 161,000 net new FiOS Internet connections and 140,000 net new FiOS Video connections in second-quarter 2013. Verizon had a total of 5.8 million FiOS Internet and 5.0 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 12.2 percent and 12.6 percent, respectively." (Revenue growing faster than new customer growth and a very high ARPU.)
    • deeviant 12y ago
      If it not Verizon's responsibility to provide a internet connection, to the internet, then what exactly are their internet service customers paying for. Also, I find it interesting that netflix charges ~10-15 bucks a month, while the average internet only service plan in the 40-50$ range per month. This is a guess, but I would also say there are more Comcast/Verizon/Time Warner customers than netflix customers. The amount of money these large service providers rake in must be an order of magnitude higher than Netflix. To me, this money that the big ISP's are trying to get from Netflix looks like some sort of fee applied for forcing them to actually provide the service they promise to their customers.
  • Alex_MJ 12y ago
    Am I the only one who thinks that this could hugely backfire from a PR perspective? The message is "The Verizon Network is Crowded Right Now." not "Verizon is Deliberately Slowing This Right Now." (or some less loaded version of that) It's bad PR for the ISPs, but combined with the fact that most people can hardly spell ISP, and that Comcast and their FCC homies keep describing the new toll booth as a fast lane, if I were a nontechnical consumer my first response would be, "What the hell are they waiting for? Put in the fast lane! I wanna watch my damn movies!"
    • Karunamon 12y ago
      Which is why it's so important they used the ISP's name there. Instead of saying "congestion", they say "(ISP)'s congestion". Considering that customer satisfaction with the average telecom company is somewhere between that of the DMV and a crooked tax collector, it plays into the confirmation bias people have that they don't love their ISP, they tolerate their stupidity because its the only way to get online.
    • Zancarius 12y ago
      > "What the hell are they waiting for? Put in the fast lane! I wanna watch my damn movies!" Telling a customer they're not getting what they paid for from their service provider is about as plain English as you can get. I daresay we need this sort of rhetoric, and I doubt their response will be levied toward Netflix unless they start getting letters from their ISPs saying "We're throttling you because you're watching Netflix and they won't pay up." This situation could get ugly, though.
      • macavity23 12y ago
        I hope it does get ugly, because that's the only way this 'fast lane' horseshit is going to stop.
        • DanBC 12y ago
          Or perhaps it'll just make ISPs start charging by bandwidth instead of offering "unlimited" and hoping most people don't use it.
  • poopsintub 12y ago
    The question is why didn't they try this with Comcast before shelling out millions of dollars.
  • jsz0 12y ago
    > "This is about consumers not getting what they paid for from their broadband provider" If I pay for a 100Mbit/sec connection from my ISP why doesn't NetFlix send me 100Mbit/sec of data? They choose to limit my speeds (via streaming) and do not offer any options to download or pre-cache video content I plan to watch. Is this a violation of network neutrality? If I ask NetFlix for 4GB of data why are they allowed to limit the speeds?
    • emgeee 12y ago
      AFAIK no where in your Netflix terms of use is Netflix obligated to give you content at a specific speed or amount. They are obligated to stream you movies, not stream you movies at 100mb/sec. This is in stark contrast to ISPs who advertise 100Mbit/sec down.
• martin_bech 12y ago
  Error message should include links to better ISPs in your area.
  • bhartzer 12y ago
    Or an affiliate link to sign up for another ISP in their area. Or Netflix should start their own ISP (as a reseller or white label).
    • jc4p 12y ago
      In most cases, you don't have a choice of ISP.
      • deleted 12y ago
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  • mortenjorck 12y ago
    In a lot of cases, I'd imagine it already does.
  • alyandon 12y ago
    Unfortunately, my choices are: 1) cable internet service from TWC (fortunately - they have decent service in my area so Netflix won't be displaying the "your provider sucks here is a better one" link for me) 2) 1.5mbits/s DSL from AT&T Some might argue that satellite and wireless providers like Clear are viable alternatives. They are not as wireless has spotty connectivity and satellite broadband has unacceptable latency. So, my choices are either broadband through the local cable monopoly or almost-broadband DSL through the telco that refuses to upgrade their infrastructure in the area that I live. Free market indeed. :-/
  • iamthepieman 12y ago
    At most I've only had two choices for ISP - Comcast and Time Warner. Currently I have one "option" - Charter. I guess you could add mobile providers to the list if you count mobile hotspots as broadband. That would be an additional 1-4 providers in most areas.
• sologoub 12y ago
  Anyone have a screenshot of what the error message actually says?
  • sp332 12y ago
    This is the image that I've seen posted to several news articles. https://twitter.com/yurivictor/status/473978204852453376 https://twitter.com/yurivictor/status/473978204852453376 Edit: interesting, this seems to be the only screenshot anyone has?
  • ianamartin 12y ago
    http://qz.com/216609/netflixs-video-error-message-is-a-clever-attack-on-cable-companies/ http://qz.com/216609/netflixs-video-error-message-is-a-cleve...
  • uptown 12y ago
    Available here: https://twitter.com/yurivictor/status/473978204852453376 https://twitter.com/yurivictor/status/473978204852453376
  • hornokplease 12y ago
    Here's a tweet including a screen capture that was widely cited two days ago: https://twitter.com/yurivictor/status/473978204852453376 https://twitter.com/yurivictor/status/473978204852453376
  • bstar77 12y ago
    "The Verizon Network is Crowded Right Now." http://arstechnica.com/information-technology/2014/06/netflix-tells-customer-the-verizon-network-is-crowded-right-now/ http://arstechnica.com/information-technology/2014/06/netfli...
    • higherpurpose 12y ago
      That seems like a very fair and accurate claim. They should've done it to Comcast, too, before they paid up, and when they did this to them: 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...
• chris_mahan 12y ago
  Awww, poor Verizon...
• jusben1369 12y ago
  It doesn't state it anywhere but I assume Netflix can be pretty sure of where the bottleneck is happening before transmitting that message correct? Given all the other factors that can contribute to a slow down.
  • notdonspaulding 12y ago
    > ...I assume Netflix can be pretty sure of where the bottleneck is happening ... It depends on how fancy they get with their detection routines. They can certainly see which networks the traffic is flowing over, but then there are multiple devices (and networks) in play to deliver that traffic to them. For instance, just a one-way trip showing the devices that could slow down a packet of data can give you an idea of the number of potential bottlenecks: -> Chromecast CPU -> Chromecast WiFi chipset -> User's home network router (usually, but not always, provided by ISP) -> Cable/DSL/FiOS modem -> [[ ISP devices they directly control ]] -> Transit provider's network -> Netflix's network. Netflix could certainly jump through hoops to isolate the bottleneck to the ISP network, but are they? Who knows? I'm not sure they really need to anyway. The hockey stick graph they have showing throughput before and after payment looks like a classic mafia shakedown.
    • TillE 12y ago
      Those factors are smoothed out in aggregate, though. You can't make assumptions about individual cases, but you can look at the whole picture and compare different large ISPs pretty accurately.
    • fastest963 12y ago
      If a large majority of customers that use a particular ISP but are having streaming problems across different devices and if Netflix has no load on their network, then you can assume its a problem with the middle-man.
      • notdonspaulding 12y ago
        The point Verizon is making here is that Netflix has not done due diligence to verify that the specific customer they are showing the "Verizon Sucks!" message to is having connection issues that are provably Verizon's fault. It seems to me that they're stopping one foot shy of calling Netflix out for libel. It's not libel if it's true, so it might be better for Netflix to only show the message when they can prove that the specific connection is being slowed because of the interconnect (or lack thereof).
• whalesalad 12y ago
  Relevant. http://ispspeedindex.netflix.com/usa http://ispspeedindex.netflix.com/usa
• ianamartin 12y ago
  I love what Netflix is doing with this. Not so much because I am totally convinced that they are 100% right and the Cable companies are 100% wrong. Mostly just because I 100% hate all the cable companies.
  • theandrewbailey 12y ago
    Do you consider Verizon a cable company? I don't. Come to think of it, what really separates cable and telephone companies these days? Most of them sell the same things as the others (TV, internet, phone), and the distinction is largely historical and technology based.
• bhartzer 12y ago
  I'm on CenturyLink DSL and they don't show that message for me when there are speed issues... they apparently only show it to Verizon customers?
  • eco 12y ago
    Netflix is testing it in select markets.
  • mhitza 12y ago
    If you expend the list (include smaller ISPs) provided here(http://ispspeedindex.netflix.com/usa http://ispspeedindex.netflix.com/usa), yours is still above Verizon
• aresant 12y ago
  Here is the actual Cease & Desist: http://recode.net/2014/06/05/verizon-threatens-netflix-with-legal-action-over-congestion-message/ http://recode.net/2014/06/05/verizon-threatens-netflix-with-...
  • jamesaguilar 12y ago
    Interesting observation re: FiOS's performance with other video services. I'm not a huge fan of the incumbent ISPs in this country, but they do have something of a point there.
    • olegbl 12y ago
      That's sort of the whole point... Lack of net neutrality leads to ISPs slowing down specific traffic (such as Netflix but not, say, Youtube).
      • jamesaguilar 12y ago
        I don't think that is how it works. The letter pretty clearly explains that Netflix uses for delivery third parties that have insufficient bandwidth to Verizon. Verizon did not -- at least according to this letter -- actively DO anything to slow Netflix down.
        • corford 12y ago
          I haven't been following this too closely (I don't live in the US) so I apologise if what I'm about to say it absolute rubbish but... my understanding is Netflix use Level3 for transit and the problem is Verizon refuse to upgrade their peering capacity with Level3.
          • mullingitover 12y ago
            Yes. There was a post on Level3's blog explaining that they have zero peering problems worldwide with the exception of a tiny group of ISPs in the US, and this group is coincidentally ranked dead last in customer satisfaction.
• wmf 12y ago
  Netflix may be reaping what they have sown here. They agreed to buy paid peering from Verizon, so if they don't have enough capacity into Verizon the onus is on them to buy more. OTOH if there is some kind of problem inside Verizon then the error message is justified.
  • brk 12y ago
    But peering really only links the network at the "top level". Verizon could still have lots of congestion within their network which would cause lack of end-to-end available bandwidth.
• Karunamon 12y ago
  This is a genius move. It's exactly what needs to happen to get consumers to realize that it's their ISP fucking them over, not Netflix. The average joe isn't outraged enough about net neutrality. If only they'd start doing this to other known bad actors coughcomcastcough, that might just be what the doctor ordered. I wonder why they ponied up the money to the protection rackets first, and only then started pointing fingers. Maybe the agreement gave them access to some better data? If not, this should have been done months ago! By the way, don't bother with the comments on the article page unless you want to lose all faith in humanity :(
  • 67726e 12y ago
    From a strategic perspective, I think paying off one of the ISPs in this case strengthens their case by showing that the problem is a shakedown for money. If they didn't pay up and the issue was never fixed then the ISPs could attempt to play it off as some larger-than-money issue. They've proven the problem is greed.
    • scrabble 12y ago
      I never thought of this, but it's quite genius when laid out this way.
    • Karunamon 12y ago
      Even better, it attacks Verizon using their own words against them. Verizon: Netflix performance sucks because their traffic is congesting our network! Netflix: Our performance sucks because their network is congested! Verizon: OMG WTF you can't say that!
      • cgman 12y ago
        Can we CC Netflix on this comment... genius!
  • ilyanep 12y ago
    It could be so that the ISP can't claim "if you had peered with us, we wouldn't be so congested" or some other BS.
• mox1 12y ago
  It's frustrating that Verizon and friends can make grandiose statements in their advertising about "unlimited bandwidth", "faster wifi" ,"stream 5 things at a time", etc, etc. Or lie to customers, My mother just called Comcast to downgrade her service and the CS Rep said "WiFi won't work with our Economy Plus internet plan" Yet when another entity does something as simple as showing an error message that casts them in a negative light, they are willing and able to threaten legal action. They stretch the truth as far as they can, yet give not an inch when confronted with truths they don't like. Remove government so we can add customers! But we need government so we can slap Nextflix when they say something we don't like! I don't have a good answer how to fix it, it's just very plain to see, and frustrating.
  • scrabble 12y ago
    What do they mean WiFi won't work? How is that anything other than a blatant lie? Reminds me of the late 90's when my ISP told me I couldn't get cable Internet because I didn't have a 486. I lied and told them I did to have the modem sent to me to hook up myself. It's a computer network, once it's in my house I can expose it as I like.
    • dec0dedab0de 12y ago
      What do they mean WiFi won't work? How is that anything other than a blatant lie? They probably mean the WiFi built into the cable modem.
      • jessaustin 12y ago
        How would that be anything other than a blatant lie? Are they going to mail the customer a different model of modem? Do any current cableco-provided modems not have built-in wifi?
        • danudey 12y ago
          > Do any current cableco-provided modems not have built-in wifi? No, but all of their features can be enabled/disabled by the ISP remotely.
• Alupis 12y ago
  Wow, Verizon... dumb move.
• 8ig8 12y ago
  Hopefully YouTube will follow the lead.
• Zhenya 12y ago
  Context - error message: http://www.washingtonpost.com/blogs/the-switch/files/2014/06/netflix-verizon-640x294.png http://www.washingtonpost.com/blogs/the-switch/files/2014/06...
• ctdonath 12y ago
  Streisand Effect.
• ChuckMcM 12y ago
  Wow, what a stupid move on Verizon's part. I have to believe the Streisand effects will far and away outpace any remedial action they might try to achieve here. While I get that they are irritated by their customers calling them up knowing more about how broken their network is, than the tech answering the phone, but this is going to be the new reality. With Google, Netflix, and no doubt Amazon providing more information to their customers about exactly why their product is having issues.
  • rosser 12y ago
    Until the law firm responsible for their client getting Streisanded suffers significant and public repercussions for doing so, they'll continue to advise this kind of action because billable hours.
    • danudey 12y ago
      It's more likely that the executives are telling their (in-house) lawyers 'you need to shut this down' and leaving it at that.
    • e40 12y ago
      That's why I just tweeted this @Verizon: .@Verizon if it weren't for that C&D you sent to @netflix I would never have known how shitty you've been to your customers. THANKS!
  • bane 12y ago
    I'm so outraged that I'm going to switch my provider from Verizon to....nobody. Since there's no competition and it looks like the providers have formed a cartel to collude on selectively restricting bandwidth to Netflix. They've got us right where they want us.
• bambax 12y ago
  What is the point of Verizon sending such a letter? Do they think Netflix will comply? "Oh Jeez we hadn't thought this through but now with this letter and all, we understand! We'll just start blaming our own servers instead. Thanks." Or is it simply a necessary step before they sue? But if they sue, isn't it likely they'll lose? (Sue over what anyway?)
  • dudus 12y ago
    Clearly they are just preparing ground for possible future legal actions against Netflix. I don't think on their sane minds that Netflix would ever comply to that.
  • MaysonL 12y ago
    I certainly hope that if they sue, Netflix countersues and gets attorneys fees and punitive damages.
• addflip 12y ago
  Verizon fios customer here. There has been a noticeable drop in the quality of streams in the past couple of months. The picture went from excellent > barely functional(after the FCC ruling) > watchable(after the peering agreement) still not great. Kudos to Netflix.
  • theandrewbailey 12y ago
    I noticed that Youtube performance went up around the time the peering agreement happened.
  • pwg 12y ago
    Verizon FIOS customer here (with a "business" link, I wanted a static IP, which is not offered with "residential"). I've seen no change in download/upload performance myself. So I suspect they prioritize the "business class" customers above the "residential" customers. [EDIT]: fix a spelling typo.
    • mbreese 12y ago
      The parent was referring directly to Netflix performance, not raw upload/download speeds...
    • ep103 12y ago
      I've read elsewhere that business class internet connections are regulated by a different set of law than last mile residential connections.
  • flavor8 12y ago
    Yeah, same here. I was watching a movie on Roku/Netflix 6 weeks or so ago. Quality was 2* (out of 4, meaning OK, but visible encoding artifacts now and again) and yet it still fell back to the buffering screen 8 times in 30 minutes. I got fed up and rented the same movie on Amazon (still on Roku) and watched it in HD without a single instance of buffering. After it was done I switched back to Netflix and tried to watch something else, and again hit buffering every couple of minutes. It's not usually that bad, but it clearly illustrates that somewhere in the Netflix -> Verizon connection that something is badly wrong.
• theandrewbailey 12y ago
  Netflix is angry because Verizon isn't giving Netflix the bandwidth that Netflix paid for[0]. Netflix should ignore this C&D on free speech grounds, and tell Verizon to get lost, because corporations are people[0] and have free speech. [0] I wish I was joking about that.
• nsxwolf 12y ago
  Maybe Verizon would prefer the more accurate "Verizon is deliberately slowing down your Netflix experience."
• knodi 12y ago
  I love it. Fuck you Verizon/Comcast/AT&T.
• danesparza 12y ago
  In the cease and desist, the Verizon's lawyers allege that Netflix can't possibly know if the network slow-down is coming from Verizon's network or other parts of the internet. I actually chuckled when I read this -- because after reading Netflix Tech blog (here: http://techblog.netflix.com/ http://techblog.netflix.com/ ) and seeing Netflix's open source contributions (here: https://github.com/Netflix https://github.com/Netflix) I have a feeling Netflix probably has a LOT of data to back up these assertions.
• logn 12y ago
  > "So Netflix is throwing up a 'The AT&T network is crowded right now' message. Meanwhile, Youtube is playing 1080p no problem." Netflix should try to explain that in the error messages too.
  • DonPellegrino 12y ago
    AT&T can choose to throttle specific services.
• dkhenry 12y ago
  This seems very naive on VZW's part its extremely easy to show that there is congestion at the ingress of one of your peers. Even if VZW is not a direct peer its pretty easy for them to get metrics off their clients deployed at the last hop.
• hugolm84 12y ago
  Im sure most of the internet providers cap their bandwidth to services like this. I am confident that the main Swedish ISP provider Telia is capping as we speak. I can see that ping times increases and it's always reoccurring around 9-10pm Fridays. Around 9:30 buffering speeds up, meaning most of the people giving up and switching to regular TV. One could argue that this is the time that Netflix/Youtube/Hbo/ViaPlay or any other service is used the most, but my suspicion is that capping occurs at those times, to validate the Fastlane/slowlane argument when the it arrives here in Sweden too. I am currently collecting statistics to validate this. However, its insane that a ISP can cap and provide lesser service's on certain ports and argue that the fault is at the entertainment provider. Its also insane that when going from a "torrent way of life" to becoming a paying stream customer, I cant even watch my favourite show, when i want, on 100/100Mbit line. ISP's are in the business of providing fast connections and high bandwidth, and that's what I'm paying for, however I want to use it. It shouldn't matter if I'm streaming from YouTube or downloaded illegal porn. Though it seems it looks like they want to sell me bad gasoline that doesn't take me anywhere, and say my engine is at fault.
• infogulch 12y ago
  How do we get ISPs classified as common carriers? Sue their pants off for the copyright infringement of their customers (and all the other illegal things customers can do). This why common carriers exist. They trade ultimate control over the transfer of content and treat it equally for the protections of being indemnified from the content itself. This is why the U.S. Postal Service can't be prosecuted for transporting a death threat letter. Make it about money and they'll jump on the common carrier bandwagon before you can blink.
  • graylights 12y ago
    They already have immunity for users' infringements via the Safe Harbor provisions of DMCA. The safe harbor provisions requirements are a lot less stringent then Common Carrier. They must register as an ISP, can't modify data, and can't directly profit from infringement or promote it. Certain ISPs already have done things that should get them deregistered though, such as compressing images, replacing ads or injecting content. For example, comcast injects their copyright warnings into html pages transfered.
• spacefight 12y ago
  The heat is on!
• click170 12y ago
  1) Why are ISPs not classified as Common Carriers? This needs to happen like now. 2) This makes me want to get a Netflix subscription just to support them, knowing I would never watch a single video from them. I'm signing up right now. Go Netflix!
• jostmey 12y ago
  Whatever happened to the right to free speech? There are of course restrictions to free speech, such as you cannot yell fire in a crowded building unless there really is a fire, but this is not one of those scenarios. The behavior of Verizon and the other ISPs are grossly offensive!
  • Nacraile 12y ago
    Don't forget about defamation. Sure, you can spread lies in order to do me harm. But I can sue you for the damage done by those lies. Why would you think that lies that damage a reputation are substantially different from vandalism that damages a building? Not that I think Verizon actually has a strong case for defamation. Netflix should have little difficulty arguing that they had good reason to believe that their claims are true. I don't think this is going to end well for Verizon.
• anoncow 12y ago
  Someone please clarify my doubts. When I run a server, I have to pay for bandwidth costs. For eg. My website hosted on linode gets me 20TB of data transfer limit. I expect end users to be able to view content worth 20 tb of up/down data transfer. Netflix runs its own servers but the ISP providing connectivity must be already charging Netflix for a certain bandwidth and data transfer limit. If the ISP is charging for data transfer already, I expect the ISP to provide the entire service. For eg. Let us assume that Verizon charges netflix 1 usd per tb of data transfer. And Netflix uses 20000tb of data in a month. Then Netflix owes Verizon 20000 usd a month. And Verizon has to serve the data according to the bandwidth agreed to. Is Netflix not paying Verizon for the bandwidth and data transfer? If Netflix is not paying Verizon then why does my hosting provider charge me for bandwidth and data transfer?
  • sliverstorm 12y ago
    Netflix has their own ISP. Netflix's ISP and Verizon pay eachother nothing to exchange traffic (called peering). Verizon wakes up one day and says, "Shit out of all the ISPs we peer with, Netflix and their ISP is responsible for 35% of our traffic, we have to do huge upgrades on the link to them, and they aren't paying us a dime" That's my understanding of what is going on.
    • anoncow 12y ago
      Does Netflix's ISP pay anything to anyone? If no why does linode make me pay for data transfer? Thanks for replying (Linode is just an example)
      • ecnahc515 12y ago
        To prevent you from abusing the network and keep their data center not congested, and have other customers service not degraded by your uses. Linode isn't an ISP, they still have to deal with ISPs for the end user, which is why it is different.
    • fekberg 12y ago
      The traffic exchange would only occur once a customer routing data over a Verizon network uses Netflix, no? Meaning that the 35% of the Verizon network usage that Netflix uses, is due to customers actually using the connection they pay for, no? As an ISP, I think if you are offering 100Mbps unlimited in/out, you should Expect full thrust from every connection, or at least be capable of delivering that. I know it's not really realistic, they need to assume that some people, sometimes are disconnected but if I am paying for a connection and a certain level of throughput, I expect to get that. Just my point of view, correct me if my assumptions are incorrect!
• tikumo 12y ago
  Netflix could also make their buffering settings more advanced. i want a bigger buffer if my internet is unstable, and it should be transparant how netflix buffers..
  • Nacraile 12y ago
    If it takes 2 hours to send you 1 hour of content, no amount of buffering is going to give you the instant gratification you want.
  • jedberg 12y ago
    It already does that, but there's only so much buffering you're willing to wait for.
• thepumpkin1979 12y ago
  I thought they were paying fees to Verizon.
• sadris 12y ago
  Netflix should also be including the phone numbers of city council members in the zip code of the account owner, and a link to example legislation for use of eminent domain seizure on last-mile cables.
• kunjanshah 12y ago
  I wonder why ATT didn't C & D Netflix as well? Netflix had that notice for ATT too, just like Verizon. AT & T screenshot from a few days ago: https://twitter.com/kunjanshah/status/473152026147557376 https://twitter.com/kunjanshah/status/473152026147557376
• NoPiece 12y ago
  I support this in principle, but I would bet a good portion of the buffering that happens for Verizon customers is due to issues with their own wifi network.
• leccine 12y ago
  Well I think we should introduce a tax on commuters because as it turns out they are the 90% of the highway traffic.If they want to get to work on time they can use the fast lane for a little extra and if they don't pay we just make them drive 10 miles per hour. I think this is fair. Ohh btw. if they complain about it, it is just them trying to influence policy that was set by good corporations so I don't understand why we should change it. :) (please look up irony on wikipedia before downvote, thanks)
• Aloisius 12y ago
  Is Verizon actively slowing the connection to Netflix.com itself or is the connection between Verizon and Netflix's provider (Cogent?) simply limited? In other words, are all Cogent customers suffering poor performance with Verizon customers? Because the former is wrong and demanding more money from a single company hosted on a service provider you have specific peering agreements with is extortion. The latter however, well, no one said there were unlimited pipes between every transit provider on the planet and if you're someone large like Netflix, sometimes you need to pay for transit on more than one provider to get the performance you need when your own provider can't or won't do so themselves. It has been like that for decades.
• Osiris 12y ago
  I believe that the solution is forcibly separate infrastructure from service. The same company that provides the infrastructure should not be the same company that provides the service to the customer. There are several nations around the world where this is the case. It reduces the barriers to entry for ISPs, creating an environment where there are dozens of ISPs to choose from with differing levels of customer service and pricing plans. The primary problem with Comcast and Verizon is that they can leverage their customer base as a negotiation tactic rather than solely on the state of the network.
• jeremycole 12y ago
  There is an easy and practical solution to this whole problem: If Verizon doesn't like the amount of bandwidth their customers use watching Netflix, they can always choose to block Netflix completely on their network, and inform their customers that they've done so. It would be honest, clean, fair, etc. Customers would be paying for exactly what they are getting, everyone could be happy with the arrangement. Of course there would be a massive revolt of their customers if they did so. Because their customers WANT Netflix. So instead, Verizon will try very hard to make it "sorta" work and blame Netflix while trying to get money from them.
  • rodgerd 12y ago
    Perhaps I've misunderstood the situation in the US, but isn't the problem that Verizon are a de-facto monopoly in many markets? If customers can't say "screw you" then all Verizon need to do is avoid getting hammered by the DOJ anti-trust department.
    • hga 12y ago
      Many customers, but perhaps not many markets. I'm in the same position with AT&T, in a residence that's at the edge of two cities, but is unincorporated (not part of any city, just the county, state, and the USA itself). No cable service is available, the deals they cut with the two cities don't cover me. Those deals make them local monopolies, long ago the original AT&T (which got split up, and then recombined into AT&T, Verizon and Century) arranged a Federal and state level monopoly, except of course for many rural and otherwise expensive to serve markets, which are served by smaller telcos. I have at least one option for a WISP, but it's awful; at least AT&T's ADSL here is reliable. For now, AT&T really doesn't want it's landline business, wants to drop it for more profitable wireless. Ditto Verizon.
• noonespecial 12y ago
  Two ugly chickens are coming home to roost here. 1) ISP's insisted on selling home bandwidth as functionally unlimited. They did this primarily so they would only have to offer expensive plans. Grandma can't get the 300meg email plan for $8, only the $80 plan. And then everybody tried to use it like it really was unlimited. 2) DRM. Drm makes it so that the net can't cache. 90% of netfilx bandwidth is likely the same 10% of videos. They all have to make the full trip through the wires. A local cache at the ISP to improve efficiency is impossible.
  • snorrah 12y ago
    Regarding 2): Don't Netflix provide content servers / boxes / network devices that ISP's can put in the ISP's own data centres to help with exactly this issue? https://www.netflix.com/openconnect https://www.netflix.com/openconnect
• dlgeek 12y ago
  I feel like Verizon's treading VERY dangerous waters here. If they sue Netflix for libel over this, then they're going to have to go through discovery. Since the claims center around network congestion, that means it'd be fair game for Netflix to go after every scrap of paper they have about the state of their internal network, oversubscription strategies, data about advertised vs. actual customer performance, any history of traffic shaping, and they'd be able to depose employees about all of these things. As much as I'd love to see all of that information come to light in a court battle, somehow, I don't think Verizon would...
• lbcadden3 12y ago
  Netflix is paying someone for their traffic. Verizon customers are paying for broadband which includes streaming movies. The ISP need to quit whining. They need to quit trying to get laws passed in every state that keep competition out. Verizon 2014 1st quarter. $30.8 billion revenue $7.2 billion operating income http://www.verizon.com/investor/news_verizon_reports_fifth_consecutive_quarter_of_doubledigit_operating_income_and_earnings_growth_042420.htm http://www.verizon.com/investor/news_verizon_reports_fifth_c... no sympathy
  • hga 12y ago
    And I'll bet landline CAPEX, even adjusted for getting rid of various territories, is flat or declining. It certainly is for AT&T.
• rohunati 12y ago
  Thank you Netflix for telling Verizon to go fuck themselves.
• massysett 12y ago
  This is exactly why I dropped Netflix. I want a high-def movie, not their whining about someone else's network. I have no problems streaming from Amazon. I have a choice of streamers. Other streamers work better. I have less choice of wired ISPs and they're harder to switch. Netflix would rather whine and preserve its profit margins than pay up. OK, fine, but since their whining does not get me the movie I want, I cut it off. Netflix will find that most other people also do not care to hear their whining. I can understand why Netflix does it though...it's $8 a month. Between production costs, licensing costs, marketing, and profits, all $8 a month leaves room for is crappy movies, poor investment, and a continuous drive to shift costs to ISPs and whine about it.
  • mwfunk 12y ago
    You are paying your ISP to move bytes to and from your home. It doesn't matter where those bytes come from or go to; you are paying for that bandwidth. It's already paid for. You either get that bandwidth per your agreement with them or you don't. It's not like Netflix is causing you to magically download more bytes. You chose to do this, and that's fine, because that's what you're paying your ISP for. Comcast, et al want to double-dip on this transaction and you should be extremely not OK with that. Why wouldn't the ISPs do the exact same thing to Amazon that they did to Netflix as soon as they become a big enough target and the legal precedent has been established? This is something that needs to be nipped in the bud, like NOW, before this becomes an established way for ISPs to do business. Also, it's not like all of your favorite services that will someday be paying Comcast protection money not to throttle them are just going to swallow those costs. Those costs will get passed on to you one way or another. No good can possibly come out of any of this.
• beedogs 12y ago
  It's funny that Verizon thinks Netflix is damaging the Verizon brand. As if there's anything more they could do to lower people's opinions of Verizon.
• otterley 12y ago
  Text of the letter in question: http://www.scribd.com/doc/228334970/Letter-to-David-Hyman http://www.scribd.com/doc/228334970/Letter-to-David-Hyman