[173125] in North American Network Operators' Group
Re: Verizon Public Policy on Netflix
daemon@ATHENA.MIT.EDU (Owen DeLong)
Wed Jul 16 19:00:46 2014
X-Original-To: nanog@nanog.org
From: Owen DeLong <owen@delong.com>
In-Reply-To: <201407131609.KAA09231@mail.lariat.net>
Date: Wed, 16 Jul 2014 15:57:56 -0700
To: nanog@brettglass.com
Cc: "nanog@nanog.org" <nanog@nanog.org>
Errors-To: nanog-bounces@nanog.org
On Jul 13, 2014, at 09:09 , nanog@brettglass.com wrote:
> At 11:39 PM 7/12/2014, Steven Tardy wrote:
>=20
>> How would "4U of rent" and 500W($50) electricity *not* save money?
>=20
> Because, on top of that, we'd have huge bandwidth expenses. And =
Netflix
> would refuse to cover any of that out of the billions in fees it's =
collecting=20
> from subscribers. We can't raise our prices (that would not only cost =
us
> customers but be unfair to many of them; it would be forcing the =
non-Netflix
> users to subsidize Netflix). We simply need Netflix to pay at least =
some of its
> freight.
So, to sum up, Brett, you feel that Netflix should be forced to bill =
their BrettGlassNet users
extra to cover what they pay to BrettGlassNet to reach the users to =
deliver the content the
users have requested instead of expecting you to bill the users for that =
yourself.
Because Netflix refuses to do this and has enough of a market presence =
that you aren't
succeeding so well telling your customers that they shouldn't care so =
much about Netflix,
you're blaming Netflix for this problem? It's a shame to see a small =
provider acting so much
like the big $CABLECO and $TELCO providers thinking that they have a =
right to extort
money from content providers to avoid billing their subscribers more =
accurately.
> more (it costs more to serve each one). And Netflix is particularly =
out of line=20
> because it is insisting that we pay huge bandwidth bills for an =
exclusive
> connection just to it. It is also wasting our existing bandwidth by =
refusing to=20
> allow caching.
The fact that some access provider was able to extort Netflix because =
they are a bigger
800# gorilla than Netflix shouldn't make you expect that you can extort =
Netflix in the same
way, nor does it mean that by refusing to be extorted by smaller =
providers, Netflix is
extorting you with their market position. In an ideal world, frankly, =
none of the access providers
would be allowed to double-dip like this. You should have to bill your =
customers for the
traffic you deliver to them. If they want more than your network can =
accommodate at what
they currently pay, then they should have to pay. How you sort that out =
with your customers
is your business. If you don't want your customers that don't use =
Netflix to subsidize your
customers that use Netflix, use a usage-sensitive pricing or charge a =
premium service of
some sort or whatever. That's between you and your customers (so long as =
you have
competition and your customers have choice).
> If Netflix continues on its current course, ALL ISPs -- not just rural =
ones,
> will eventually be forced to rebel. And it will not be pretty.=20
I don't think so. I think the reality is that access providers have been =
trying to find ways
to force content providers to subsidize their business and avoid =
charging their customers
accurately for a long time and that continuing to do so is damaging to =
everyone involved.
> Our best hope, unless Netflix changes its ways, is for a competitor to =
come=20
> along which has more ISP-friendly practices. Such a competitor could =
easily=20
> destroy Netflix via better relations with ISPs... and better =
performance and
> lower costs due to caching at the ISP.
Your best hope is to see your competition forced to move to a pricing =
model that reflects the
costs of delivering what their customers demand so that you can move to =
a similar pricing model
without losing customers.
It's not that I'm insensitive to your situation, just that I see this as =
an example of one of the many
ways in which the current model has become utterly dysfunctional and =
attempting to perpetuate
it seems ill-advised to me.
If Netflix had a closed or limited peering policy, then I'd say "shame =
on Netlfix". If Netflix only peered
in an exchange point or two near corporate HQ and didn't have an =
extensive nationwide network, I'd
say shame on Netflix. Reality is that Netflix is in most of the major =
peering centers already and continues
to work aggressively to expand into more and more second-tier and =
third-tier peering centers. I'd say
that is Netflix paying their share. Further, for providers that aren't =
in peering centers Netflix is in, they
have offered a variety of alternative solutions and they pay a selection =
of transit providers to move the
bits to providers they can't economically connect to directly.
It seems to me that Netflix is being about as good a net citizen as is =
possible and I, for one, consider
them an example that should be emulated.
Access providers should have to face the reality that they are charging =
their customers to deliver bits
they request to them. If the price they charge is insufficient to cover =
their costs in doing so, then they
need to find ways to solve that problem. It is not Netflix fault that =
your customers want more bits from
Netflix than they want from some other content provider, that's just =
Netflix having a successful business.
I might have bought the idea that Netflix as a new product represents so =
much more than expected
bandwidth that you needed time to adjust your business model if you were =
making that argument 5
or more years ago. However, today, video is an expected service and =
Netflix is far from the only very large
provider of high-bandwidth video content.
Owen
