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Netflix Blinks, Will Pay Comcast For Network Access 520

Posted by timothy
from the who-pays-whom-for-what dept.
We've mentioned several times the tension between giant streaming sources (especially Netflix), and ISPs (especially Comcast, especially given that it may merge with Time-Warner). Now, Marketwatch reports that Netflix has agreed to pay Comcast (amount undisclosed) for continued smooth access to Comcast's network customers, "a landmark agreement that could set a precedent for Netflix's dealings with other broadband providers, people familiar with the situation said." From the article: "In exchange for payment, Netflix will get direct access to Comcast's broadband network, the people said. The multiyear deal comes just 10 days after Comcast agreed to buy Time Warner Cable TWC -0.79% Inc., which if approved would establish Comcast as by far the dominant provider of broadband in the U.S., serving 30 million households" I wonder how soon until ISPs' tiered pricing packages will become indistinguishable from those for cable TV, with grouped together services that vary not just in throughput or quality guarantees, but in what sites you can reach at each service level, or which sports teams are subject to a local blackout order.
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Netflix Blinks, Will Pay Comcast For Network Access

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  • by khasim (1285) <brandioch.conner@gmail.com> on Sunday February 23, 2014 @05:28PM (#46318225)

    Two reasons.

    1. Comcast advertises "up to" X bandwidth. But does not guarantee any specific speed.

    2. Comcast can show that you can get "up to" X bandwidth on the local segment. Just not across peering points.

    This is another reason that the Time Warner/Comcast merge cannot be allowed to happen.

  • by PhrostyMcByte (589271) <phrosty@gmail.com> on Sunday February 23, 2014 @05:37PM (#46318273) Homepage
    This isn't quite the same net neutrality issue here. Netflix isn't paying to stop service degradation or increase priority of their traffic -- they're basically just switching service providers and paying Comcast to host their servers. It may even end up cheaper for Netflix.
  • I don't understand why we don't just restrict companies to do the thing they're supposed to do. You're a cable company? Ok, you're allowed to sell cable connections into people's homes. You want to say what traffic flows on your cable? Sorry, not in your charter.

    Are you a movie company that wants to put in cable that carries only your movies? Sorry, not in your charter.

    Of course this means that a company couldn't really own another company.

  • by beelsebob (529313) on Sunday February 23, 2014 @05:58PM (#46318449)

    Because the finance of the internet is based on a sender pays model. Peering agreements only work when you actually have (roughly) equal traffic with another ISP. In this case, the ISP serving netflix has significantly higher data sent from it than Comcast's network, so they need to start paying comcast to transport that data.

    This by the way, is at the same time, why bandwidth caps and metering on a home connection is bullshit –because what you're paying is paying only for the data you send, the data you receive is already payed for by the sender.

  • by TheGratefulNet (143330) on Sunday February 23, 2014 @06:15PM (#46318549)

    fwiw, I have comcast and its been really fast. 50meg/sec download in real honest terms. hard to believe but its true.

    even with a vpn and 'watching' (yeah...) movies from europe to the US, I still get 6MB/sec (yes, megabytes) over my VPN, over comcast. this is when I term my connection in a nice safe euro country.

    what I hate about comcast is that they don't offer honest pricing. it starts low then climbs and you have to disconnect their service for 6mos before being allowed to renegotiate another 'special'.

    still, after being stuck with dsl for over 10 yrs (at t1 speeds or less; usually much less) the 50meg 'blast' pkg is actually quite real and reliable in my area (bay area). I don't have issues with their connection; just their business practices.

  • Re:Long-term loss (Score:5, Informative)

    by Rougement (975188) on Sunday February 23, 2014 @06:37PM (#46318759)
    Awful analogy. I give my ISP money every month, in return I get bandwidth with which I should be able to do whatever I please. If the ISP is struggling to deliver the advertised bandwidth then that's their problem.
  • by TubeSteak (669689) on Sunday February 23, 2014 @07:22PM (#46319079) Journal

    That is no where near true, and shows you did not read the article.

    I think you read the article, but didn't understand what was in front of you.

    1. Netflix pays Cogent to be its ISP.
    2. Cogent is a Tier 1 ISP, this means that they don't pay for transit or peering bandwidth.
    3. Netflix traffic keeps increasing in leaps and bounds.
    4. This is a problem for Cogent's peers, because they are receiving more (Netflix) traffic from Cogent than they are sending.
    5. Because of 4, Comcast/Verizon/AT&T/TimeWarner have refused to increase peering bandwidth with Cogent unless they get paid for it.
    6. Because of 5, all data through those peering points are subject to lag and dropped packets.

    The degradation isn't selective, which is why the GP is correct that it isn't a Net Neutrality issue.

  • Re:Not long (Score:5, Informative)

    by whoever57 (658626) on Sunday February 23, 2014 @07:27PM (#46319131) Journal

    AFAIK, Comcast is only throttling down Netflix, not fully blocking it.

    And there was me thinking that Comcast agreed not to do this very thing when it bought NBC:

  • by Immerman (2627577) on Sunday February 23, 2014 @07:49PM (#46319283)

    Now that is a horrible, horrible metaphor.

    Almost from day one the internet was based on a user-pays model. ISPs A and B both have a lot of customers who want stuff from users on the other ISP. Data flows back and forth, and periodically the ISP who requested the most data paid the ISP who supplied that data, based on how many more bytes flowed A->B than B->A. It provided incentive for ISPs to seek out content-providers as customers, or to be better content providers themselves (remember, it was mostly universities to start). As the number of ISPs increased they often decided to decided to save bookkeeping headaches and enter into "nobody pays" peering agreements with other ISPs with whom they had roughly symmetric data flows, but consumer pays remained the norm in any asymmetric exchange.

    Fast forward, and some ISPs are now trying to change the rules - rather than paying for the data their users consume and passing that cost on to the users, as has been done since day one, they now want to double-dip and charge the content providers as well, for the exact same data transfer they are already charging their users for I have already paid my ISP for a certain level of internet access, why should I be put up with them intentionally degrading my access to some services?

    l As for the "kiosks" I'm assuming you're referring to the caching systems Netflix has offered. And again your metaphor is horrible. Under normal rules Comcast would be paying Netflix's ISP for every byte of data transferred, but Netflix offered them an optimized caching system so that instead of having to upgrade their systems to handle the load their customers demanded, as well as paying for the data itself, instead they could simply pay to transfer a single instance make all the free copies they wanted, saving them a bundle.

    >Without in-depth details about the exact details of the Netflix disputes between Cogent and Comcast, Verizon, and others, I'm going to assume Cogent are acting like pricks, as usual, and give the other ISPs every benefit of the doubt.

    Fair enough. But if it's a battle between ISPs, why are they dragging Netflix into it? Threaten to blacklist or throttle Cogent, and let Netflix either put a fire to their ass to shape up so other ISPs will continue doing business with them, or find another ISP who aren't pricks to begin with.

  • Tempest in a teapot (Score:5, Informative)

    by matthewv789 (1803086) on Sunday February 23, 2014 @10:53PM (#46320211)

    Net neutrality is a real issue, but this is not an example of it, it's just Internet infrastructure working as it always has and as it's intended to.

    Previously, Netflix did not have a direct peering arrangement with Comcast, so they paid Cogent and others for transit to Comcast.

    Now, they have arranged to directly connect their network to Comcast (which was NOT the case before), and, since they are not supplying the roughly equal traffic in both directions typical of "no-pay" peering agreements, they have agreed to pay Comcast for this arrangement.

    What they are paying Comcast for direct peering appears to be LESS than what they were paying Cogent et al previously for transit to Comcast... And they have a more direct, and presumably better performing, set of connections now.

    This is a win-win for everyone, and has nothing to do with net neutrality. It's a simple arrangement to implement more direct and lower-cost traffic relaying.

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