[173130] in North American Network Operators' Group
Re: Verizon Public Policy on Netflix
daemon@ATHENA.MIT.EDU (Owen DeLong)
Wed Jul 16 20:18:06 2014
X-Original-To: nanog@nanog.org
From: Owen DeLong <owen@delong.com>
In-Reply-To: <53C3DF39.6030708@meetinghouse.net>
Date: Wed, 16 Jul 2014 17:13:56 -0700
To: Miles Fidelman <mfidelman@meetinghouse.net>
Cc: NANOG <nanog@nanog.org>
Errors-To: nanog-bounces@nanog.org
On Jul 14, 2014, at 06:46 , Miles Fidelman <mfidelman@meetinghouse.net> =
wrote:
> Jay Ashworth wrote:
>=20
> [ As you might imagine, this is a bit of a hobby horse for me; =
Verizon's behavior about municipally owned fiber, and it's attempts to =
convert post- Sandy customers in NYS from regulated copper to =
unregulated FiOS service leave a pretty bad taste in my mouth about VZN. =
]
>=20
> Jay,
> Quite agree with you on this stuff. I used to spend a good part of my =
time working with municipalities on planning fiber builds - so VZ's =
behavior on those matters leave a pretty bad taste in my mouth too. =
But.. that's kind of a different issue, wouldn't you say?
>=20
> Am I obtuse or does it all boil down to:
>=20
> 1. If both Netflix customers, and Netflix all connected to a single =
network - customers would be paying for their access connections, and =
Netflix would be paying for a pipe big enough to handle the aggregate =
demand.
>=20
> 2. The issue is that customers connect to one network (actually =
multiple networks, but lets stick with Verizon for now), and pay =
Verizon; Netflix buys aggregate capacity into other networks; with one =
or more transit networks in the middle.
Well, there are multiple possibilities here...
A: CUST<->ACCESS_NETWORK<->TRANSIT_A<->TRANSIT_N<->NETFLIX
B: CUST<->ACCESS_NETWORK<->TRANSIT<->NETFLIX
C: CUST<->ACCESS_NETWORK<->NETFLIX
In case A, it's pretty obvious that CUST $->ACCESS_NETWORK$->TRANSIT_A =
and NETFLIX$->TRANSIT_N
It's not entirely clear what the economics would be between =
TRANSIT_A<->TRANSIT_N, but most likely settlement free peering.
In case B, it's fairly obvious CUST $->ACCESS_NETWORK and it's less =
clear wehter:
B1: ACCESS_NETWORK$->TRANSIT<-$NETFLIX (transit =
double-dip)
B2: ACCESS_NETWORK$->TRANSIT and Transit is settlement free =
with Netflix (Access pays transit)
B3: TRANSIT<-$NETFLIX and Access is settlement free with =
Transit (Netflix pays transit)
I'm sure in the real world there are likely examples of all three =
scenarios.
In case C, we arrive at what I think most of the argument is actually =
about. Obviuosly, CUST$->ACCESS_NETWORK.
The question is whether there should also be ACCESS_NETWORK<-$NETFLIX, =
which is what Brett is claiming should happen and what at least one very =
large ACCESS_NETWORK has been able to achieve at least temporarily. In =
my opinion, this case is a case of Access Double Dip where the access =
network is being paid by both the customer and the supplier for the same =
delivery.
As I said, this would be like paying for a product from $BOX_STORE and =
having $BOX_STORE bill me for shipping, and pay $CARRIER for deliver =
only to have $CARRIER show up at my door asking for even more money =
before they will fork over my package.
> 3. Somebody has to pay for what's in the middle (ports into transit =
networks, bandwidth across them). Those are additional costs, that =
wouldn't exist if everyone were connected to the same network.
I don't think that's really part of the argument here.
> 4. Both parties can make reasonable claims about why the other guys =
should pay.
Not really, IMHO. (See above and below)
> 5. $LARGE_ACCESS_NETWORKs are big enough to say "Netflix pays" - with =
Netflix making a visible stink about it.
LARGE_ACCESS_NETWORK may be able to force Netflix to pay, but that's not =
the same as saying Netflix _SHOULD_ pay. It's more like recognizing that =
market power and a large customer base can often force an economic =
decision that is contrary to what _SHOULD_ happen by any other rational =
evaluation.
> 6. Netflix is important enough to end users, that Netflix can tell the =
little guys "you pay." And yes, they're making it a little easier by =
providing the CDN boxes.
Perhaps, but that's not really what is happening here if you look at it =
in more detail. I don't deny that Netflix _COULD_ do this, just as =
$LARGE_ACCESS_NETWORKs _HAVE_ apparently done this to Netflix. However, =
so far, Netflix seems to be trying as hard as they can to provide =
cost-effective alternatives for ISPs to accept their bits in a variety =
of ways and allowing the ISP to choose which solution works best for =
them.
True, Netflix hasn't built out every single distant corner of the =
universe with their peering network, but I would say that by any =
reasonable view of the situation, they have aggressively built quite a =
network over a large fraction of their service geography and to their =
credit, they are continuing to aggressively expand that network.
To the best of my knowledge (and I'm sure Dave will correct me if I am =
wrong), Netflix would prefer to deliver bits settlement free directly to =
as many ACCESS_PROVIDERS as possible, because it saves Netflix from =
paying transit costs and it saves ACCESS_PROVIDERS from paying =
additional circuit or transit costs and it provides a better customer =
experience all around.
In cases where Netflix' network does not geographically overlap =
$ACCESS_PROVIDER's network, then one or both will need to cover the cost =
of bridging that distance, whether with an IP transit relationship, a =
circuit, or some other mechanism. In most cases, since Netflix is in a =
high percentage of the major peering centers, most $ACCESS_PROVIDERS =
already have to build into one of those centers in order to reach many =
other things, so it is reasonable for them to connect to Netflix at that =
same point. In other cases, they use a transit provider to reach those =
centers as well, and so likely they will use the same transit to reach =
Netflix. In virtually every case, they're going to reach Netflix the =
same way they reach the majority of other top sites on the internet. In =
such a case, it makes sense that $ACCESS_PROVIDER pays for their unique =
geographic situation. It doesn't make sense to expect Netflix to =
subsidize their choice of geography.
It seems to me that other than $LARGE_ACCESS_PROVIDERS' public =
statements trying to extort money from $CONTENT_PROVIDERS and Brett's =
posts in this conversation, the vast majority of people in this thread =
have overwhelmingly agreed with this point of view.
> 7. In the absence of some reasonably balanced formal policies and =
regulations about settlements - we're going to keep seeing this kind of =
stuff.
Probably true, but I will point out that one of the main reasons that =
the Internet has become such a cost-effective alternative even for voice =
traffic vs. the PSTN is the lack of said formal policies and regulations =
about settlements. Of course, you did say "reasonably balanced" which I =
don't think is a term that could be rationally applied to the ITU =
settlement rules for the PSTN.
Owen
