Cable Cancer Metastasizes

This weekend, the Wall Street Journal reported that Netflix is paying Comcast for the privilege of letting Netflix’ traffic flow across Comcast’s network. This isn’t how it’s supposed to work: different Internet providers are supposed to interconnect to share traffic without charging each other for the privilege (further explanation here).

This is bad for a couple of reasons. First, it means that Comcast can engage in the same hostage taking that cable companies use to extort content providers to pay for access to their network. Just as, for example, Dish dropped AMC for a while because AMC and Dish had a disagreement over payment, Comcast can degrade Netflix performance whenever it feels that Netflix isn’t paying enough. Second, it effectively freezes out small players in the video market. If, for example, you want to subscribe to a video service that specializes in film noir, or Spanish language films, or some other niche, there’s no guarantee that you’ll be able to stream that content because Comcast isn’t getting greased to send it to your Internet connection.

The ultimate cure for this disease is for the FCC to put on its big boy regulatin’ pants and classify cable companies as common carriers. We’re still waiting to hear what the FCC’s next move on net neutrality, but in the meantime, both Netflix and the cable companies see an opportunity to lock down their markets.

One more thing: this weekend, Kevin Drum and Felix Salmon suggested that the cure to this disease is to unbundle the local loop. This means requiring the cable providers to allow other providers to sell Internet service over their network, similar to the way electricity is sold today (at least in New York). This addresses one part of the problem: Comcast wouldn’t be able to hold Netflix hostage since Comcast subscribers could choose to switch to another Internet provider that has a good Netflix connection. It doesn’t address another issue, which is that cable providers have been notoriously slow to upgrade their local loop technology. Cable internet technology is capable of speeds rivaling fiber, but US providers don’t upgrade their technology unless Google Fiber comes to town.

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57 replies
  1. 1
    monkeyfister says:

    After years of saying to myself that Netflix really holds nothing for me anymore, with content seemingly frozen in a 5-Years-Ago time warp, I made the decision to cancel it at end of this month. $120 per year is already too expensive for shows I can just Torrent. The original shows hold no interest for me, and now, with this deal, it seems destined that prices are going to go up.

    So, buh-by, Netflix.

  2. 2
    NotMax says:

    Admit to not reading the WSJ piece, but every other article I’ve read about it outlines and describes the specifics, agreements and limitations of the deal in quite different (and nearly opposite) terms than those posited above..

  3. 3
    Villago Delenda Est says:

    I disagree with “unbundling the local loop”. The government should take over the local loop and freeze assholes like Comcast out of that entirely. There will be slow, at best, improvement in the last mile as long as the last mile is in private hands. There’s no incentive for these parasites to improve it. The local loop should be expropriated with ZERO compensation, and run by a local uitility. There should be NO restrictions on government operating local loops, be they hardwired or broadcast.

    These guys had a chance to do they right thing. They did the obscenely profitable vampiric thing. Fuck them.

  4. 4
    Jennifer says:

    If Comcast manages to acquire Time Warner, it will generate the synergy for raising poor customer service to a height previously unimaginable.

  5. 5
    rikyrah says:

    this absolutely sucks

  6. 6
    Gin & Tonic says:

    The trouble is that the design philosophy of the Internet, embodied in quaint notions of “net neutrality,” didn’t really anticipate that the Internet would stratify the way it has now, with “content networks” and “eyeball networks.” We are in a broadcast TV environment again, where almost all the Internet nodes are passive subscribers of content provided by a few players. Net neutrality presupposed much more of a peering relationship among the nodes.

  7. 7
    C.V. Danes says:

    The Circle is nearing completion…

  8. 8
    Cassidy says:

    The good news is this just speeds up things coming to a head. The more the RW clings to the ideals of social and economic control, the more it pushes people to say “fuck it and fuck you”.

  9. 9
    C.V. Danes says:

    @monkeyfister:

    The original shows hold no interest for me, and now, with this deal, it seems destined that prices are going to go up.

    I’ve thought about dumping the streaming service and just going back to the DVD/Blu-ray only option, which I still use a lot. The only selling point to streaming for me was merely convenience, but I can just as easily wait the month or so extra for a movie to come out on DVD or Blu-ray. Since I bought a digital antenna and a TiVo, most of the shows I used to pay Amazon VOD to watch, I can now just tape over-the-air and watch whenever I want, anyway.

    Except The Walking Dead :-(

  10. 10
    NotMax says:

    Also too, regardless of the merits (or demerits) of Google Fiber, keep in mind that they also help (or have helped) fund:

    American Enterprise Institute
    Heritage Foundation
    ALEC
    Federalist Society
    American Conservative Union
    U.S. Chamber of Commerce
    Americans for Prosperity

    and a raft more organizations at which progressives tend to look askance.

    Also sponsored fund raisers for Rand Paul and James Inhofe, among others.

  11. 11
    Pen says:

    @Gin & Tonic: Wait, you’re saying that a decades-long industry-wide policy of degraded “upload” speeds and banning residential servers or server-like connections has resulted in an asymmetrical growth of internet traffic patterns? Who could have predicted?

  12. 12
    C.V. Danes says:

    @Cassidy:

    The good news is this just speeds up things coming to a head. The more the RW clings to the ideals of social and economic control, the more it pushes people to say “fuck it and fuck you”.

    Who knows. People might just start reading and going outside again. They may even get their heads out of their smart phones and look up to realize that there’s an actual real world with real people walking around them. Imagine the social consequences :-)

  13. 13
    ericblair says:

    @Gin & Tonic:

    The trouble is that the design philosophy of the Internet, embodied in quaint notions of “net neutrality,” didn’t really anticipate that the Internet would stratify the way it has now, with “content networks” and “eyeball networks.”

    Sort of like international mail. At the start of the Universal Postal Union, mail used to be exchanged without payment at the international level since the volumes were assumed to be more or less equivalent in both directions, so everything averaged out and it minimized record keeping and having to pay postage for every country the mail transited. Then you had major players starting to game the system to post from cheap countries and have the receiver countries take uncompensated losses, which made the Postal Union start a terminal dues program to even things out.

    I’m not so concerned about some sort of terminal dues to pay for resources used, but worried about the ability of carriers to extract economic rent because of their status as natural monopolies. It’s one thing to charge a reasonable amount for high bandwidth usage, but another if the carriers end up just shaking down content providers because, what are they gonna do.

  14. 14
    Bill Arnold says:

    @NotMax:
    Assuming you’re talking about this?
    I hadn’t heard about it. Did google respond (except in the comments)? (I haven’t slogged through the links to verify that they are consistent with the article.)

  15. 15
    JGabriel says:

    mistermix:

    This is bad for a couple of reasons.

    It’s not just bad; it’s evil.

    People who get internet access through Comcast are already paying for access to Netflix’s internet stream, assuming they’re Netflix subscribers. Comcast (or any internet service provider) shouldn’t be able to block or throttle traffic on the basis of the who the sender is.

    Permitting this kind of selective access will quickly reduce the internet to a fractionalized series of networks incompatible with one another, much as the online world was before the internet’s ubiquity – back when you had to have separate accounts for Compuserve, AOL, and whatever BBS’s you connected to. For instance, if this continues, you might have to sign up for a Comcast account to get Netflix and a Verizon account to get Hulu or HBO-Go.

    And forget about accessing Wikipedia, or a page critical of Comcast, or being able reach the website of a competitor to change providers.

    It’s like one step forward, a hundred miles back.

  16. 16
    maya says:

    @C.V. Danes: Exactly! Haven’t had TV since it went digital – all (1) local stations too far and gov provided black box didn’t work, so to hell with it all. Also, get all these ads and postcards from my cell phone service (US Cellular) pushing smart phones. Perhaps I’m too stupid but what do I need THAT for?
    Plenty to do in chores, the list grows like wabbits, and only occasionally drop in on BJ these days. Sorry to say even the content here is mostly boring.

    The days have been nice. It looks like our west coast drought has had its back broken and tomato seeds are in their private little greenhouses on the front deck – jelly jars over yogurt containers. All is right with the world.

  17. 17
    JGabriel says:

    @Villago Delenda Est:

    These guys had a chance to do they right thing. They did the obscenely profitable vampiric thing. Fuck them.

    Exactly.

  18. 18
    JGabriel says:

    @Jennifer:

    If Comcast manages to acquire Time Warner, it will generate the synergy for raising poor customer service to a height previously unimaginable.

    It would be hard to top Verizon for customer contempt.

  19. 19
    ericblair says:

    @JGabriel:

    Permitting this kind of selective access will quickly reduce the internet to a fractionalized series of networks incompatible with one another, much as the online world was before the internet’s ubiquity – back when you had to have separate accounts for Compuserve, AOL, and whatever BBS’s you connected to.

    The major issue, though, is that nobody would care if carriers offered crappy, limited, overpriced services, if they weren’t natural monopolies and doing everything they can to stop competition.

  20. 20
    JGabriel says:

    @NotMax:

    Also too, regardless of the merits (or demerits) of Google Fiber, keep in mind that they also help (or have helped) fund …

    Ambiguous pronoun error – Google Fiber helps fund or Comcast helps fund?

    .

  21. 21
    JGabriel says:

    @ericblair: Yep, that too.

  22. 22
    C.V. Danes says:

    @JGabriel:

    Permitting this kind of selective access will quickly reduce the internet to a fractionalized series of networks incompatible with one another, much as the online world was before the internet’s ubiquity…

    After reading The Circle, I’m not sure this is such a bad thing :-)

  23. 23
    Joel says:

    @NotMax: I can’t imagine a corporate board in the entire country that doesn’t have that list of “friends”.

  24. 24
    dollared says:

    @Villago Delenda Est: I am intrigued by your ideas and would like to subscribe to your socialist polemical broadside.

    Also, I would observe that my long ago girlfriend who instituted a “no warnings – just consequences” policy in her 4th grade classroom had the quietest, most orderly bunch of kids in two weeks’ time. I’m sure MBAs could be easily managed under the same paradigm.

  25. 25
    WaterGirl says:

    @JGabriel: My heart sank when I read about this over the weekend. The FCC better step up.

  26. 26
    WaterGirl says:

    @JGabriel: You’re right about Verizon. But I feel certain that with the new merger, Verizon may have to share the title.

  27. 27
    RareSanity says:

    both Netflix and the cable companies see an opportunity to lock down their markets.

    I don’t think it is fair to characterize this move by Netflix as trying to “lock down” their particular market. To the contrary, it’s them merely trying to survive in that market.

    The fact that they have only struck this deal with Comcast, or at least that’s all that is publicly known, makes perfect sense. Netflix doesn’t just have to deal with the content delivery arm of Comcast, it has to deal with the content production/ownership side of NBC/Universal as well.

    It’s Comcast being able to squeeze Netflix from both sides to extort more money from them. If Netflix doesn’t pay Comcast the added fees for delivery, maybe episodes of “Psych” cost a little more, or are suddenly unavailable. Don’t want to pay more for the “Psych” episodes? Maybe your paying customers on Comcast start noticing poor video quality with your service, but excellent quality with Hulu or Amazon.

    Our bought and paid for government, is about to give Comcast even more leverage over companies like Netflix when they allow them to acquire Time Warner Cable.

    This shit has just gotten way out of hand…

  28. 28
    cat says:

    I’m having trouble connecting to Ars, but Verizon’s position while maybe seems wrong to people outside of the industry its not indefensable as everyone makes it out to be.

    Cogent is not a member of the peerage class of big internet service providers like Verizon/Level3/etc. They don’t share in the load of the backbones, they just produce load on the backbones.

    If you aren’t sharing in the load you have to pay to have your data transmitted.

    This is a separate issue from personal ISP where your provider isn’t delivering the data you asked for.

  29. 29
    catclub says:

    @JGabriel: This.
    The agreement is between Comcast and Netflix. but the contract that Comcast has with its customers
    is completely broken. ‘We will provide some internet to you, when we want to, and degrade some of the web content you have paid to access’

    “The ultimate cure for this disease is” is to DVR the netflix stuff you have streamed. It solves the problem for the viewer.

  30. 30
    RareSanity says:

    @NotMax:

    If you’re waiting for the perfect ally in any particular policy battle, you’re going to be waiting a very, very long time.

    If Google (through Google Fiber) is useful in moving the broadband market in this country forward, then I am going to support them in those endeavors. However if Google, through other endeavors pushes for policies that I feel are harmful, then I will support the people that oppose them.

    My support is based on the policy, not the parties involved. Although most times, the parties involved and their position on a policy, will tell just about all you need to know about that policy.

  31. 31
    BGK says:

    @cat:

    Cogent is not a member of the peerage class of big internet service providers like Verizon/Level3/etc. They don’t share in the load of the backbones, they just produce load on the backbones.

    Bingo. Cogent is a joke-shop of a Tier 1 backbone, one in name only. They undercut other Tier 1s and sign up large-traffic generators, then give the middle finger to how most ISPs handle transit by dumping that traffic on the other ISPs at the closest peering point. Every time I have some customer complaining about site performance, ability to connect, and so forth, I can usually guess ahead of time that I’m going to find a Cogent hop somewhere in that path.

  32. 32
    catclub says:

    @maya: “black box didn’t work” agree, it was crappy.

    but the new digital TV gets lots more channels for me than analog did. I think I should rescan to see what else has appeared.

  33. 33
    The Other Chuck says:

    I’m for net neutrality as much as anyone, but consider that Netflix is something like 25% of all traffic on the internet. The whole internet. Peering has always been on the basis of equal exchange, or at least some reasonable ratio, but Netflix carries basically jack in the other direction, breaking the whole arrangement. Comcast can almost certainly absorb it, and I certainly don’t think their motives are pure, but what about Speakeasy or Sonic.net? If they have to pass on the rates, then everyone is paying to subsize Netflix, subscriber or no.

  34. 34
    Ruckus says:

    @JGabriel:
    Do you really want to find out how hard? Because I’ll bet it isn’t that difficult to make it worse, as crappy as it is now.

  35. 35
    Ruckus says:

    @catclub:
    So now I have to purchase an additional piece of hardware to access the data rate that I paid for?
    I don’t think so.

  36. 36
    NotMax says:

    @RareSanity

    Completely misreading my intent, which was to point out that Comcast is not entirely ‘evil,’ and neither is Google entirely ‘good’ as is implied.

    Everything I read yesterday about the deal points to it specifically excluding (indeed, barring) favoritism as regards speed and delivery over Comcast but rather guaranteeing a stable, dedicated and higher efficiency means of access from Netflix to Comcast. Shaky analogy, granted, but it strikes me more as if Netflix purchased a first-class ticket on an airline. They are provided more amenities but the destination, route and the speed traveled is no different than anyone else’s on the same airplane.

  37. 37
    Ben Cisco says:

    The Comcast acquisition of Time Warner will affect my area.

    The Google Fiber expansion MAY affect my area as my city is on the list of potential targets…

  38. 38
    RareSanity says:

    @cat:

    I think you may be referring to this article at ars.

    The problem with this is simple…Verizon is trying to get Cogent and/or Netflix to pay for what it has sold to its (Verizon) customers. Verizon is trying to double dip.

    Verizon’s customers pay Verizon for a certain amount of bandwidthper month. If they choose to use that bandwidth for Netflix, why should Netflix or Cogent pay Verizon for bandwidth the customer has already paid for?

    Verizon’s argument is that YouTube and Netflix consume 50% of their network traffic, so they should pay when Verizon needs to expand capacity is fallacious. These companies are not “pushing” content through Verizon’s network, the customer’s of Verizon, which are paying for bandwidth, are “pulling” this enormous amount data from Netflix and YouTube.

    Netflix and YouTube are already paying more and more money to CDNs to make their content available. CDNs use that money to expand their capacity to provide the content to ISPs, then customers pay ISPs to access that content.

    Did you notice something missing there? At what point is Verizon financially responsible for purchasing infrastructure to provide adequate bandwidth for the most popular services used by its customers?

    Verizon not only doesn’t want to pay to make these upgrades, it wants everyone else to make the upgrades for them, then Verizon wants to be paid for the privilege of allowing these other companies to upgrade their (Verizon’s) infrastructure.

    Pretty sweet deal for Verizon, huh?

  39. 39
    RareSanity says:

    @NotMax:

    Point taken.

    But like I said in a previous comment, I don’t think Netflix had much choice. Comcast sits in the unique position to hit them from two different directions…providing content to Netflix, and delivering service to customers from Netflix.

    The phone companies can’t exert the same level of pressure.

  40. 40
    NotMax says:

    @RareSanity

    For whatever it may be worth, I do think the FCC could and should establish a bright line between content provision and content carriage.

    The nature of the digital universe does blur those categories somewhat, to the extent that establishing a strict wall of separation regarding ownership (as opposed to a regulatory regime) is not be feasible, IMHO.

  41. 41
    jheartney says:

    For the “None of you know what you’re talking about” perspective, try this posting.

    Naturally, many of these same people are also implying that because Netflix has to pay Comcast, consumers will foot the bill for this as Netflix will have to charge more for their service. This could not be further from the truth. Those stating this have no clue how Netflix delivers their content today or what costs they already incur. If they did, they would know this is not a new cost to Netflix, it’s simply paying a different provider, and it should be at a lower cost. It should actually be cheaper for Netflix to buy direct from Comcast, and they also get an SLA, which also improves quality and that’s a good thing. Given that Netflix has many options to buy transit from many different transit providers, why would they pay more? They wouldn’t.

  42. 42
    NotMax says:

    No edit option, so please consider that extraneous “be” in my last comment expunged.

  43. 43
    C.V. Danes says:

    @RareSanity:

    Pretty sweet deal for Verizon, huh?

    Yes. A near textbook example of monopoly power.

  44. 44
    Trollhattan says:

    “Nice little movie service you got dere. Be a shame if something happened to it.”

    [Smallgiant bag of cash shoved across the counter, goomba exits store, pausing to say over his shoulder]

    “See youz next month.”

    Scene.

  45. 45
    vh says:

    Unbundling the local loop is pretty much what France did some years ago. My French friends have internet connect speeds several times higher than the US and free international phone calls, all for less than we pay in US. Mobiles are often cheaper (and more flexible, lots use prepaid) in the EU also, in part because everyone uses GSM/UMTS technology so there is no proprietary lock as with Verizon. The regulatory environment needed to make this happen is essentially akin to the US Rural Electrification Act of the 1930s, which standardized household current at 110-120V, 60 Hz, thus breaking up vertical technology monopolies and increasing competition. In other words, the government forced transition from monopoly capitalism to market capitalism.

  46. 46
    pacem appellant says:

    Since Hulu and Amazon were already paying Comcast for the privilege of not being throttled on their networks, and since the FCC is moving glacially slow with net neutrality (kinda thinking that they don’t want net neutrality, who’da thunk?), Netflix’s decision isn’t really all that evil or surprising. It’s less about locking in their market and more about not being killed by their competitors.

  47. 47
    pacem appellant says:

    @jheartney: This. This. This.

    I agree that it’s bad that Netflix has to pay for unfettered access to the intertubes, but this doesn’t mean say anything about downstream consumer costs. It’s a sad statement on the state of affairs for net neutrality. Fix net neutrality, and this issue become moot.

  48. 48
    catclub says:

    @Ruckus: Well, the hard disk on your computer is the device I had in mind.

    and 2. It will be cheaper than asking for a preferred streaming package from your cable provider.

    3. When net neutrality comes – and is effectively policed – you won’t have to do this any more.

  49. 49
    Ruckus says:

    @catclub:
    I got your point. I didn’t make mine very well. Others have.
    I pay an internet provider, an amount per month for x bandwidth. (Carried over the x from the algebra thread) I pay Netflix to provide me with x content, to be watched over x bandwidth. While I’m sure there is some money passed between my two contracted companies if I paid for the max bandwidth and my internet provider restricts the incoming data so that I am getting less than what I paid for…. This is called fraud, I believe. And if my internet provider is holding my content provider for ransom, who in the end is going to pay for that? Me. And I’ve already provided the agreed/contracted amount. In my story I’m paying x but getting x-some amount, in yours I’m paying x plus and still getting x-some amount, I just don’t notice it other than I have to plan what and when I want to watch.
    I’m still getting screwed. This is what needs to be fixed.

  50. 50
    catclub says:

    @Ruckus: I fully agree. (except for the fact that your contract with Comcast, if it is home service, does not include quality of service guarantees, so they _will_ deliver all the bits from netflix, just at a slow rate that ruins streaming).

    I was posting a solution to the slow bits problem.

  51. 51
    Ruckus says:

    @catclub:
    Forgot about that. I have to agree to them providing me with whatever they feel like, whenever they feel like but I have to pay more for supposedly faster or more bandwidth, which if I’m a minute late in paying for I don’t get at all. Sounds…. fair? Of course I could hire a lawyer to renegotiate the contract but then I’d be spending a shit ton more and still wouldn’t have anything because they will never agree to actually doing what the sales department says they will. And it’s all legal because I signed a contract and should have hired a lawyer to explain to me how badly I’m getting fucked by them. To summarize, I’m fucked anyway you look at it.

  52. 52
    mclaren says:

    You don’t have a clue how bad it’s going to get.

    Bribing the ISPs to unthrottle streaming services? That’s just the start. Wait till ISPs like Time-Warner and Verizon start forcing customers to pay for each site they visit.

    Just wait — soon you’re going to have tiered pricing, with a list of sites available at each price tier. Want basic internet? Great, that’s $70 a month but you can only access Google and usenet. Every other website gives you a 404 – PAGE NOT FOUND error.

    Oh, so you want to access sites like SourceForge or io9 or Balloon-Juice? No problem, you have to pay another $40 a month. Want to access sites like microsoft’s online knowledge archive? Another $30 a month. Want to access sites like Tom’s Hardware or TomDispatch? That’ll be another $30 a month. And if you want to access sites like kickass.to or UpWorthy or reddit, why, those sites are only available with the Special Premium Deluxe Internet Package — and that costs $300 a month. Plus a download surcharge of 15 cents per kilobyte.

  53. 53
    Xboxershorts says:

    @Pen:

    Wait, you’re saying that a decades-long industry-wide policy of degraded “upload” speeds and banning residential servers or server-like connections has resulted in an asymmetrical growth of internet traffic patterns? Who could have predicted?

    It’s a design limitation of cable to be asymmetric.

    While upload from you is restricted intentionally, it is done because of the noise susceptibility of coaxial cable.

    See, the cable company CAN (and usually does) control the amount of noise introduced from their network.

    But they cannot control the amount of noise introduced from the home into the network. Especially since the home coaxial network often consists of homeowner introduced devices of unquantifiable quality. Because of this, the DOCSIS specifications require the upstream (you to them) network to reserve time slices that could normally be used for transmission to instead be used as error correction.

    This is a rough laymans description of why Cable companies have asymmetric upload and download, but I hope it helps dissolve some of your angst.

    This isn’t done intentionally to fuck with customers, it’s actually done intentionally because customers unintentionally fuck with the network.

  54. 54
    Tissue Thin Pseudonym (JMN) says:

    @Ruckus: My understanding is that you have this wrong. What you pay Comcast for is a certain amount of bandwidth to download material from the Internet backbone. What Netflix has basically been free riding on is the bandwidth to upload to the Internet backbone. Despite the fact that you streaming from Netflix requires both of these, you really are only paying for the one. The other has traditionally been handled by assuming that all of the services that upload to the backbone will be demanding about the same bandwidth. It’s this protocol that has broken down and Netflix is one of the primary culprits.

  55. 55
    Ruckus says:

    @Tissue Thin Pseudonym (JMN): @Tissue Thin Pseudonym (JMN):
    I don’t have it wrong from my standpoint. I may have left out that Netflix pays their providers depending on the amount of bandwidth they clog up, which I actually didn’t, but if instead of a ISP upgrading their equipment to handle the flow of info that I paid both parties to provide they are restricting the flow they have violated what they sold me. Not necessarily what I actually signed for but what they sold me. As I said later I get nothing without a contract and payment and that contract actually provides me with a payment requirement and them with the duty to accept that payment, and really not much more.
    If Netflix is sending more info than what they paid room for then that should be a contract violation between Netflix and their service provider. Someone didn’t write a contract very well or someone is violating a contract. Not having seen any of those contracts I would still imagine that Netflix has to pay a load fee, based on the number of streaming customers, which may have been why they wanted to separate out the services, DVD and streaming.
    The other side of this is if I’m supposed to get unlimited data at a certain speed and they are degrading flow due to me purchasing info from their competing sellers, that is for sure not what I paid for. It is possible to fix all of this, there is plenty of money being moved around but that cuts into profits and for sure we will get crappier and crappier service until the required profit margin is met.
    I know someone who owns a data storage/ISP business and 2 yrs ago he told me that the equipment advancement over the prior 2 years had allowed his company to grow twice it’s size with half the equipment. His plan had been to add 2 new data rooms but it turned out he probably could half his building projects by just upgrading his equipment every 6 months to a year. The only thing holding back Comcast et al is their desire for higher profits at their customers expense and only the government can change that.

  56. 56
    Tissue Thin Pseudonym (JMN) says:

    @Ruckus: I no longer have any idea what your argument is or why you think this deal is a bad thing. Here’s the way it works: you pay Comcast to download a certain amount of data. They are not restricting this; you can download all the data you want.

    Until now, Netflix has not paid Comcast to upload data; they pay a company called Cogent, who is effectively their ISP. Cogent hasn’t paid anything to Comcast because the Internet has worked on a basis of assuming that all of the players would be sending each other roughly the same amount of traffic. That worked in the past because the bandwidth providers signed up both customers that primarily upload and customers that primarily download and it came close enough to balancing that no one cared enough about the difference to go to the trouble of accounting for that.

    Companies like Cogent have violated that unspoken agreement by hosting extreme uploaders, like Netflix, without having much in the way of download customers. So they send far more traffic to the other bandwidth providers than goes the other way. That breaks the system.

    So Comcast went to Netflix and said: look, you’re free riding on the agreements we’ve all had and we’re going to change the way we do business with you because the differences are now great enough that we care about them. It’s not exactly breaking a contract but close. Perhaps it’s better to think of it as the contract being up and now it’s been renegotiated.

    So, in effect, where you are wrong is that what Netflix was paying to Cogent didn’t really reflect the costs that they were imposing on the system. So now they are going to have to pay it directly to the other bandwidth providers.

  57. 57
    sneezy says:

    @Ruckus:

    I pay an internet provider, an amount per month for x bandwidth.

    If you have typical residential service and read your service agreement, I suspect you will find that that is not true. For example, Comcast’s residential service terms say “Actual speeds vary and are not guaranteed.” That is to say, their customers may think that they are buying X Mbps, but they are not.

    This is called fraud, I believe.

    No, it is not, because they do not actually promise to deliver any specific bandwidth. Read your service agreement.

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