Re: Verizon Public Policy on Netflix
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers,
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties. We currently provide that: we guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver (to which Netflix does not directly connect) with a certain maximum duty cycle. But we can't guarantee the performance of a specific third party service such as Netflix. If Netflix wants us to do that, it is going to have to pay us, as it pays Comcast. That's only fair, because we would be doing something special just for it -- something which costs money. If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react. One way we could do this -- and I'm strongly considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee. This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order. --Brett Glass
Dude. Netflix doesn't want you to do help its service. Your customers want you to do that. On Jul 13, 2014 4:03 PM, "Brett Glass" <nanog@brettglass.com> wrote:
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers,
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
We currently provide that: we guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver (to which Netflix does not directly connect) with a certain maximum duty cycle. But we can't guarantee the performance of a specific third party service such as Netflix. If Netflix wants us to do that, it is going to have to pay us, as it pays Comcast. That's only fair, because we would be doing something special just for it -- something which costs money.
If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react. One way we could do this -- and I'm strongly considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee. This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order.
--Brett Glass
On 14/07/14 00:00, Brett Glass wrote:
ISPs would sign on so fast that such a service could BURY Netflix in short order.
By the way, don't think you're not going to have to pay us for all for that dirt you're hurling... These entrepreneurs, digging up dirt and depositing it everywhere. Don't they know how much it costs us to keep the place clean?! Tom
At 05:33 PM 7/13/2014, Tom Hill wrote:
By the way, don't think you're not going to have to pay us for all for that dirt you're hurling...
Building new things often does involve digging up dirt. Unlike Netflix, we'd gladly pay anyone who participates in the digging. ;-) --Brett Glass
On Sun, Jul 13, 2014 at 8:55 PM, Brett Glass <nanog@brettglass.com> wrote:
At 05:33 PM 7/13/2014, Tom Hill wrote:
By the way, don't think you're not going to have to pay us for all for
that dirt you're hurling...
Building new things often does involve digging up dirt. Unlike Netflix, we'd gladly pay anyone who participates in the digging. ;-)
But before Netflix made a deal with Comcast, would you be making the same request ? Rubens
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover *expenses that Netflix should be covering*. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
(emphasis mine) I've gotta be frank here: I really don't understand the line of reasoning from an access network's perspective that says $CONTENT needs to pay $ACCESS to accept the bits that $ACCESS's users requested from $CONTENT. I might be missing nuances here, but I've not yet come across an argument that's convinced me of why this should be the case. Of course your customers don't want prices raised; that's a no-brainer, and similarly it's fair for Grandma that just checks her email and Facebook to not want to carry the infrastructure costs of someone who consumes more content. I think what Charles is driving at is that users don't care about whether you pull in content through 1850 Pearl Street, transit, direct peering, or whatever; if I as a customer am paying for a 50 mbps service, I want my 50 mbps service. That said, to your point of no performance/connectivity guarantees to/from third parties: experience seems to indicate that users understand that you're not responsible for ensuring Netflix can *push out* the content at a given rate. However, if Netflix is capable of delivering the bits to your doorstep (wherever that is), it becomes your problem to get those bits from your doorstep to the customer. If Netflix users (or users of any other bandwidth-hungry service) are sucking up more than "their fair share", which is generally to say that they're over your oversubscription ratio, and they are *also* over the minimum capacity that you're guaranteeing below, you're in the clear from a business standpoint as long as your remaining users still get their minimum. If other users are starting to get impacted so that they don't get their guaranteed minumum, that's a network management problem (i.e. how do I cap the "offending" traffic so that other users' still get their guaranteed rate?). I suspect you may have a hard time explaining to the Netflix users that, while you're dropping/delaying their traffic in that case, you're still delivering the promised service because they're still getting their minimum service to 1850 Pearl as they're traffic is coming in from somewhere else, but I digress... If those users are over the overscription ratio *but* still below their guaranteed minimum, that sucks for the provider, but it's still the provider's problem, and the math in the business plan was apparently wrong. Since not all users consume exactly the same amount of network resources, someone is *always* subsidizing someone else's service; the question is just "by how much?" If the value north of the oversubscription ratio is sufficiently large that it's becoming a problem, either the agreement with the user(s) needs to be adjusted ("I know we said x mbps, but we actually meant < x mbps"), which again sucks from a business standpoint but is the provider's problem to deal with, or capacity needs to be augmented to match. The agreement bump can be either global (which again is a difficult business maneuver) or targeted at the users sucking up the extra capacity (which is more palatable, though users still generally balk at tiered/usage pricing). None of these are really fun to deal with from the business side, but if $CONTENT is simply getting the bits to your edge as requested, I don't see in any way how they can be blamed for the unfortunate business situation in which $ACCESS finds himself. User asks for bits; $CONTENT gets the bits to $ACCESS's edge; $CONTENT's responsibility is done. You stated earlier:
"Open Connect" is not, in fact, a CDN. Nor is it "peering." It is merely a set of policies for direct connection to ISPs, and for placing servers in ISPs' facilities, that is as favorable as possible in every way to Netflix.
That's news to me. We peer settlement-free with Netflix at the SIX, and they cover that in the OpenConnect umbrella term: "ISPs can directly connect their networks to Open Connect for free. ISPs can do this either by free peering with us at common Internet exchanges, or can save even more transit costs by putting our free storage appliances in or near their network." -- https://www.netflix.com/openconnect Also:
Because it requires expensive bandwidth that's dedicated solely to Netflix, "peering" (as Netflix calls it; it's really just a dedicated link) has 0%, not 100%, offload. The ISP is paying for all of the bandwidth, and it cannot be used for anything else.
I don't see any requirements that this is a dedicated link; we peer with them over public peering fabric and exchange a bunch of other traffic over that link. Is there another requirement in OpenConnect peering that we've just not hit but you are subject to? OpenConnect has a range of options, from public peering to private interconnects to caching appliances; the intention, I gather, is to provide a range of options. Exchange a bit of traffic but not really all that much? Public peering. Starting to consume a bunch of traffic but don't want a cache appliance? Private interconnect. Exchange a bunch of traffic and prefer caching? Get a free appliance. Presumably if you're not peering with Netflix and you don't have an appliance, you're getting the traffic via transit. You're free to not do any of the above if you find your transit costs for Netflix traffic are lower than those options (or if you just don't like OpenConnect), but for a lot of people public/private peering or a caching appliance saves $$ and resources.
...(b) pay them equitably for direct connections (smaller and more remote ISPs have higher costs per customer and should get MORE per account than Comcast, rather than receiving nothing);
The Comcast and Verizon deals were made because those guys had leverage, not because it costs them more. "We should get paid because Comcast got paid" doesn't add up. On Sun 2014-Jul-13 17:00:46 -0600, Brett Glass <nanog@brettglass.com> wrote:
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers,
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
We currently provide that: we guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver (to which Netflix does not directly connect) with a certain maximum duty cycle. But we can't guarantee the performance of a specific third party service such as Netflix. If Netflix wants us to do that, it is going to have to pay us, as it pays Comcast. That's only fair, because we would be doing something special just for it -- something which costs money.
If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react. One way we could do this -- and I'm strongly considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee. This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order.
--Brett Glass
-- Hugo
On 2014-07-13 17:00, Brett Glass wrote:
We currently provide that: we guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver (to which Netflix does not directly connect) with a certain maximum duty cycle.
I confess I might be splitting hairs, but what Internet exchange exists at 1850 Pearl Street? The best I can ascertain is that it's a Level3 datacenter, which doesn't seem (to me) to be the same thing. It would appear that neither LARIAT nor Netflix has chosen to connect to the most prevalent (one might argue "only true") IXP in Colorado, so I'm honestly a bit puzzled as to a) your indignation and b) their decision. Jima
----- Original Message -----
From: "Brett Glass" <nanog@brettglass.com>
Note that I misunderstood you to be the Verizon blog poster I started this thread commenting on. My apology for that in a separate post, but here are some replies that amount to "you are standing on the same rock in the river they are". :-)
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
Characterizing it as "ransom" and "expenses Netflix should be covering" is, alas, largely in doubt, from the responses I've seen here; it's assuming facts not in evidence.
We currently provide that: we guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver (to which Netflix does not directly connect) with a certain maximum duty cycle. But we can't guarantee the performance of a specific third party service such as Netflix. If Netflix wants us to do that, it is going to have to pay us, as it pays Comcast. That's only fair, because we would be doing something special just for it -- something which costs money.
It's not Netflix who expects you to deliver that quality. It's your customers. Who pay you for it. If they're not paying you enough, well... who set those prices? Netflix?
If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react. One way we could do this -- and I'm strongly considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee. This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order.
Alas, content providers probably would not. But good luck with that. Cheers, -- jra -- Jay R. Ashworth Baylink jra@baylink.com Designer The Things I Think RFC 2100 Ashworth & Associates http://www.bcp38.info 2000 Land Rover DII St Petersburg FL USA BCP38: Ask For It By Name! +1 727 647 1274
(Yes, yes, I know, feeding the troll, etc.) On Jul 13, 2014, at 4:00 PM, Brett Glass <nanog@brettglass.com> wrote:
We guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver… It’s a well known regional Internet exchange point in a building which I believe is owned by Level3.
So, Brett, this begs the question, “Well known to whom?” Your implication is that it’s known to someone besides yourself. Most people recognize a definition of an exchange as a location at which three or more networks peer, and which has published policies allowing additional networks access on the same terms. Is that a definition that you understand and subscribe to? Or are you using some other definition that is not “well known?” If there’s a currently-operational exchange in Denver other than CoreSite (910 15th Street & 639 E. 18th Street), I and many other people would very much like to know about it. -Bill
----- Original Message -----
From: "Bill Woodcock" <woody@pch.net>
(Yes, yes, I know, feeding the troll, etc.)
I'd like to note for the record, Bill, that I don't think this conversation is in fact troll-feeding; I think that the accumulated weight of various reasoned explanations as to why the situation is the way we see it has value in the long term, in changing what people will try to get away with. And in any event, I started the thread; while I may have been rabble-rousing, I wasn't trolling. :-) Cheers, -- jra -- Jay R. Ashworth Baylink jra@baylink.com Designer The Things I Think RFC 2100 Ashworth & Associates http://www.bcp38.info 2000 Land Rover DII St Petersburg FL USA BCP38: Ask For It By Name! +1 727 647 1274
On Sun, 13 Jul 2014, Brett Glass wrote:
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
The Netflix users either have to pay to you, or they have to pay to Netflix. Now, if you're paying $20 per megabit/s/month then you and your users are victims of lack of competition in your area. In properly developed places in the world with working competition, bandwidth prices are around $0.5-5/megabit/s/month. With those levels, you would have much less problem covering the cost of transit and your customers could use the service as much as they want because on margin, producing more bandwidth doesn't cost too much. At $20, I can understand that you're hurting. However, you paying $20 isn't Netflix problem. I don't see how Netflix could be re-imbursing you for your bandwidth costs, because it's not their fault either. So, the real problem you should spend your energy on is why are you paying so much for bandwidth, not going after Netflix. Since this is probably not something you can fix short term, I see no other option than to externalise your high margin cost to customers by imposing a monthly cap on usage and charging more for the people using the service more. You need to make sure your reveue model matches your expenditure model. -- Mikael Abrahamsson email: swmike@swm.pp.se
In message <alpine.DEB.2.02.1407140734410.7929@uplift.swm.pp.se>, Mikael Abraha msson writes:
On Sun, 13 Jul 2014, Brett Glass wrote:
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
The Netflix users either have to pay to you, or they have to pay to Netflix. Now, if you're paying $20 per megabit/s/month then you and your users are victims of lack of competition in your area.
In properly developed places in the world with working competition, bandwidth prices are around $0.5-5/megabit/s/month. With those levels, you would have much less problem covering the cost of transit and your customers could use the service as much as they want because on margin, producing more bandwidth doesn't cost too much. At $20, I can understand that you're hurting. However, you paying $20 isn't Netflix problem. I don't see how Netflix could be re-imbursing you for your bandwidth costs, because it's not their fault either.
So, the real problem you should spend your energy on is why are you paying so much for bandwidth, not going after Netflix.
Since this is probably not something you can fix short term, I see no other option than to externalise your high margin cost to customers by imposing a monthly cap on usage and charging more for the people using the service more. You need to make sure your reveue model matches your expenditure model.
And in some parts of the world bandwidth caps are the norm even for terrestial lines. My DOCIS home line has a 120G (down + up on this plan) limit then it is rate limited for the rest of the month. I don't hit the 120G limit though I regularly go over 60G. If I need more bandwidth I would go up to the next tier. This gives me a fixed price as well as well defined service expectations.
-- Mikael Abrahamsson email: swmike@swm.pp.se -- Mark Andrews, ISC 1 Seymour St., Dundas Valley, NSW 2117, Australia PHONE: +61 2 9871 4742 INTERNET: marka@isc.org
----- Original Message -----
From: "Mark Andrews" <marka@isc.org>
And in some parts of the world bandwidth caps are the norm even for terrestial lines. My DOCIS home line has a 120G (down + up on this plan) limit then it is rate limited for the rest of the month. I don't hit the 120G limit though I regularly go over 60G. If I need more bandwidth I would go up to the next tier. This gives me a fixed price as well as well defined service expectations.
And as much as I am not a fan of usage-based pricing -- and as often as I disagree with Mark :-) -- I don't have any problem with *that* approach: You get a big first cap, and then you rate limit to something suitable for everything except bulk transfer, and you can buy a bigger cap. As long as that first cap is reasonable -- and 120GB is, even for me -- then it's not a real hassle. The problem is a) putting the limit in the right place (x% of the customers consume y% of the total throughput per month) and b) selling it to existing accounts. It won't affect 100-x% of the customers, and of those, some percentage less than 100% will complain. Is that acceptable? Depends. Cheers, -- jra -- Jay R. Ashworth Baylink jra@baylink.com Designer The Things I Think RFC 2100 Ashworth & Associates http://www.bcp38.info 2000 Land Rover DII St Petersburg FL USA BCP38: Ask For It By Name! +1 727 647 1274
Hi, Here is a different tale from another small ISP. We quite like Netflix (and HBO Nordic and all the other streaming services). We are a FTTH provider and services like Netflix is why people are buying our service instead of going with 4G LTE or ADSL. Without content we have nothing. Yes we have the same problems. Netflix does not peer in our city, in fact they do not peer in our country(!). We are too small for an appliance. Yes I really think Netflix should peer in Copenhagen, as going to Stockholm through 1000 km of fiber is not really an option. But when we are done whining about that, I have to say that paying transit to get Netflix is not prohibitive expensive. We pay 0.5 USD/Mbps. Our margins are not so poor that we can not afford to buy the content our users want. Yes buy content - if we were a TV network we also would have to pay for the content. Without content there is no need for our service. The other ISP seems to be paying 20 USD/Mbps and that is their error. They failed to find proper transit. I notice that Hurricane Electric is present at the IX mentioned, so I am quite sure they could get cheap transit, if they would just care to actually get some quotes. Regards, Baldur
Software is... herrr.... configurable. Maybe Netflix could be convinced so their box had a switch from complete catalog hosting / caching most used data. I get from this discussion thread that small ISP feel having these box download the whole catalog is more than what their customers (<1000) need. Moving this discussion away from "net neutrality" (that seems what netflix is doing in public anouncements) to how these boxes handle and operate would be better for everyone. -- -- ℱin del ℳensaje.
The box doesn't even download 10% of the whole catalog and churns less than 1% a day. Obviously our demand curve is proprietary information, but I can assure you that a lot of people - engineers, mathematicians, etc. have looked at and improved the algorithm - but we are still constantly working to make it better. If you look at boxes like Qwilt, which is a universal flow-through cache, the best they can get is ~30% offload with Netflix traffic (in the real world, not in their lab). With multiple different encodes (driven by differing DRM and device types) the odds of two people watching the exact same thing are relatively low. The law of large numbers rules the game. -Dave On Monday, July 14, 2014, Tei <oscar.vives@gmail.com> wrote:
Software is... herrr.... configurable.
Maybe Netflix could be convinced so their box had a switch from complete catalog hosting / caching most used data. I get from this discussion thread that small ISP feel having these box download the whole catalog is more than what their customers (<1000) need. Moving this discussion away from "net neutrality" (that seems what netflix is doing in public anouncements) to how these boxes handle and operate would be better for everyone.
-- -- ℱin del ℳensaje.
On 14 July 2014 13:44, Dave Temkin <dave@temk.in> wrote:
With multiple different encodes (driven by differing DRM and device types) the odds of two people watching the exact same thing are relatively low. The law of large numbers rules the game.
-Dave
What are the chances of performing transcoding on the device rather than sending multiple copies to it? It seems that would save bandwidth without risking any licensing issues. Dan
On Jul 14, 2014, at 8:58 AM, Daniel Ankers <md1clv@md1clv.com> wrote:
On 14 July 2014 13:44, Dave Temkin <dave@temk.in> wrote:
With multiple different encodes (driven by differing DRM and device types) the odds of two people watching the exact same thing are relatively low. The law of large numbers rules the game.
-Dave
What are the chances of performing transcoding on the device rather than sending multiple copies to it?
It seems that would save bandwidth without risking any licensing issues.
In my experience the bandwidth is typically the lowest part of the cost equation. Why transcode on 1k nodes when you can do it once and distribute it at lower cost, including in electricity to run the host CPU. Centralized transcoding on dedicated hardware makes sense. - Jared
On Jul 14, 2014, at 6:03 AM, Jared Mauch <jared@puck.nether.net> wrote:
In my experience the bandwidth is typically the lowest part of the cost equation.
Why transcode on 1k nodes when you can do it once and distribute it at lower cost, including in electricity to run the host CPU.
Centralized transcoding on dedicated hardware makes sense.
- Jared
Except perhaps for the (current discussion) small rural ISP. The bandwidth scaling equations out in Ruralistan have never been the same as in large metros. You see this in wireless delivered performance as well. Netflix is probably not the straw that broke the camel's back, but it's The Thing Du Jour which one can point at and criticize, so it 's becoming a focal point. George William Herbert Sent from my iPhone
On 07/14/2014 09:42 AM, George Herbert wrote:
On Jul 14, 2014, at 6:03 AM, Jared Mauch <jared@puck.nether.net> wrote:
In my experience the bandwidth is typically the lowest part of the cost equation.
Why transcode on 1k nodes when you can do it once and distribute it at lower cost, including in electricity to run the host CPU.
Centralized transcoding on dedicated hardware makes sense.
- Jared
Except perhaps for the (current discussion) small rural ISP.
The bandwidth scaling equations out in Ruralistan have never been the same as in large metros. You see this in wireless delivered performance as well. Netflix is probably not the straw that broke the camel's back, but it's The Thing Du Jour which one can point at and criticize, so it 's becoming a focal point.
Sure, but that's nothing more than the latest version of "I gambled on oversubscription as a business model, and lost." As you point out, and has been pointed out previously by several other posters, this is how the Internet works. Some new thing is always going to come along which uses more bandwidth than previous things, and if that new thing gets popular ... In Brett's case he made the point explicitly that it's not even a matter of his rural customers not being able to get service if his prices increase to cover his actual costs; it's a situation where if he raises prices he will lose his customers to his competition. (Which in all likelihood have prices for the rural customers which are in some manner "subsidized" by other customers.) So yeah, "Survival of the Fittest" sucks if you're not the fittest, but that's life sometimes. Doug
On Sun, Jul 13, 2014 at 4:00 PM, Brett Glass <nanog@brettglass.com> wrote:
[...]
If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react. One way we could do this -- and I'm strongly considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee. This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order.
--Brett Glass
That would be awesome! If you find a way to obtain premium content that subscribers will pay for that doesn't include incredibly restrictive licensing terms that require you to account for every stream watched (including those streamed from downstream cache devices), I'm right there ready. Unfortunately, I suspect you'll find the rights holders who own the shows aren't willing to let their videos be served through a CDN that doesn't maintain draconian control over every stream (ie, that doesn't allow third party, uncontrolled caching). So, you may be able to build such a CDN; but the only content you may find that you can populate it with are cute cat videos recycled from last week's Youtube footage--which nobody wants to pay for. :( Matt
On Monday, July 14, 2014, Matthew Petach <mpetach@netflight.com> wrote:
On Sun, Jul 13, 2014 at 4:00 PM, Brett Glass <nanog@brettglass.com <javascript:;>> wrote:
[...]
If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react. One way we could do this -- and I'm strongly considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee. This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order.
--Brett Glass
That would be awesome!
If you find a way to obtain premium content that subscribers will pay for that doesn't include incredibly restrictive licensing terms that require you to account for every stream watched (including those streamed from downstream cache devices), I'm right there ready.
Unfortunately, I suspect you'll find the rights holders who own the shows aren't willing to let their videos be served through a CDN that doesn't maintain draconian control over every stream (ie, that doesn't allow third party, uncontrolled caching).
So, you may be able to build such a CDN; but the only content you may find that you can populate it with are cute cat videos recycled from last week's Youtube footage--which nobody wants to pay for. :(
Matt
Nailed it, Matt, 100%
On 7/13/2014 4:00 PM, Brett Glass wrote:
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers, My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
Oh come on. [An aside: I really preferred when Brett kept his ranting over on another list I read, but I do find it amusing that after all these decades of running an ISP, he's finally shown up on the list where people who build ISPs talk]
We currently provide that: we guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver (to which Netflix does not directly connect) with a certain maximum duty cycle.
That is very nice of you. Or perhaps you're actually operating a *business* and that is exactly the service you are selling to your customers. Not unlike what many other ISPs have been doing for decades now. You have arranged to bring bits from "the Internet" to your customers and vice versa. And you know that most customers won't use all of the bits they possibly could all of the time, so the bandwidth you've provisioned from your transit provider and/or peers is substantially less than what you sell to the customers, but you're careful to point out to the customers that there's no guarantee they can get all of their locally-provisioned bandwidth all of the time, and you try as you might to ensure that all of your customers get some of the bandwidth most of the time. And of course you charge them for that service. You can't charge them for what they'd really like, because what they'd really like costs you too much to provide... and (more importantly) you're not the only game in town, and so if you charged too much, you'd have no customers at all. Funny how business works... you need to charge more than it costs you, in order to make a profit, but not so much that nobody buys at all. I seem to remember this from a basic economics class. So now we've got the baseline of what's important to you... charging a low enough price that you continue to have customers, but high enough that you don't starve. Like all small business owners before you. The guy at the local hardware store probably shares your pain.
But we can't guarantee the performance of a specific third party service such as Netflix.
No, of course you can't. That's the great thing about the Internet... services and software comes and goes, and yet all the complications stay the same. A few years ago, the thing that made your life harder was Skype. Your very own customers went and installed software on their computers that actually sent and received data over their Internet connections that you were selling them. The gall they must have had to do such a thing! Suddenly, your infrastructure was being asked to carry real-time audio and video streams, when before the design assumption was that such a thing wouldn't happen. And it was being asked to carry bits to and from your customers that were indexing the location of other Skype users that weren't even your customers! Oh no! But, as has happened before and would happen again, your customers simply expected to be able to install software that uses the Internet. Sure, it made your life harder, just like when YouTube showed up and your customers started to get emails from their friends about cat videos. Videos! Huge amounts of bandwidth wasted on cats, when a simple text posting to Usenet about one's cat would have sufficed. Not that you didn't try... you tried updating your policies, adding things like "we prohibit the use of the Slingbox on residential connections" when another new way to use one's Internet connection showed up in the marketplace... But it wasn't entirely successful... So you complained, and complained, and complained about how your customer's usage of the Internet had changed... not because it was going to stop YouTube, or Skype, or Napster, or anything that had come before or would come in the future... but because it made the world more aware of the plight of a small business owner who wanted to not charge his customers more than the competition was charging, but who also had high costs because of where and how he chose to do business. That's right. Nobody forced you to establish your ISP in Laramie, or has prevented you from raising funding and trenching fiber right to your doorstep. In fact, as you have repeatedly pointed out, large ISPs have economies of scale , including networks that are conveniently close to major peering points, and enough traffic to attract the attention of CDNs that wish to place content closer to them... so I guess the real question is: who forced you to keep your ISP small and local, instead of growing it into a major national or international player? My guess: Nobody but you yourself made that decision. Smaller competitors almost always are forced to compete on dimensions other than those that economies of scale bring... I'm sure there's a small handcrafted furniture shop in Laramie, and I'm sure their furniture costs a lot more to make than what Wal-Mart is buying from their Chinese supplier. That was their choice... to start and run a business that can't take advantage of economies of scale and leverage that their competition has, because they've deliberately chosen to *not* grow that way. Adopt their mindset, take a deep breath, and maybe you'll enjoy being a local small business owner, instead of someone the entire universe is apparently trying to crush.
If Netflix wants us to do that, it is going to have to pay us, as it pays Comcast.
Have you considered that maybe Netflix doesn't want to do that? Maybe they really just don't care if performance to your customers is guaranteed. Maybe that's because they know your customers are already so used to being hobbled by other restrictions on the use of their Internet service that they figure they won't care about Netflix performance. Maybe it is because they have millions of other customers who they can solve performance issues from more efficiently by improving performance to major carriers. Maybe they just haven't gotten around to your ISP yet. Maybe they hate Wyoming. That's their business. You want them to pay you, grow your ISP into something they care about.
That's only fair, because we would be doing something special just for it -- something which costs money.
You're free to make infrastructure improvements that improve your customers' ability to access Internet services whenever you like. Or to fail to do so... and see if they like you enough to not switch to the competition who has. Me, I can't wait until Google Fiber shows up in your town.
If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react.
Oh brother... another "reaction" to yet another novel use of the Internet that you didn't originally design your ISP to handle. Have you considered just doing the engineering instead of complaining?
One way we could do this -- and I'm strongly considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee. This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order.
I wish you luck with this venture. You would undoubtedly learn a lot about the costs Netflix has experienced while gaining the right to stream (and now create) content that users want to see. But since complaining about the latest thing is so much easier, I expect we'll see a lot more of that instead of this service. Matthew Kaufman ps. Please read my background before claiming in your response that I don't know anything about {starting and running a small ISP in the early 1990s, operating a nationwide ISP/CLEC and associated backbone with significant peering, owning and operating a wireless ISP, peer-to-peer content delivery, video CDNs, Skype}
On Jul 13, 2014, at 16:00 , Brett Glass <nanog@brettglass.com> wrote:
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers,
My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties.
Why should Netflix be covering those expenses? Your customers asked for the content from Netflix. They paid you to deliver it and they paid Netflix for the content. You are in the delivery business. Now, if you didn't charge your customers at all and charged all the content providers, instead, a la the way it is done with various shipping companies where $BOX_STORE pays the shipping company to deliver their product and bills the customer separately for shipping (or builds the cost of shipping into the price), then no problem. However, that's not what you want. You want to double dip. You want to charge your customers to deliver the bits they ask for from Netflix (and everyone else), then turn around and ask Netflix (and possibly others) to also pay you for the same delivery. It would be like FedEx or OnTrac taking money from Amazon for a shipment and then showing up at my house and asking me to pay extra or they won't give me my package.
We currently provide that: we guarantee each subscriber a certain minimum capacity to the Internet exchange at 1850 Pearl Street in Denver (to which Netflix does not directly connect) with a certain maximum duty cycle. But we can't guarantee the performance of a specific third party service such as Netflix. If Netflix wants us to do that, it is going to have to pay us, as it pays Comcast. That's only fair, because we would be doing something special just for it -- something which costs money.
OK, so what's the problem? If I were Netflix, I probably wouldn't pay you, either. I'd suggest to any customers we had in common that they seek out a provider that was willing to build a better network.
If Netflix tries to use its market power to harm ISPs, or to smear us via nasty on-screen messages as it has been smearing Verizon, ISPs have no choice but to react. One way we could do this -- and I'm strongly
Sorry, but explaining to the user that the reason their content isn't working as well as it should is because there is insufficient bandwidth from their ISP to Netflix is a simple statement of fact, not a smear campaign. Don't like it, build a network better suited to your customer's demands.
considering it -- is to start up a competing streaming service that IS friendly to ISPs. It would use the minimum possible amount of bandwidth, make proper use of caching, and -- most importantly -- actually PAY Internet service providers, instead of sapping their resources, by allowing them to sell it and keep a portion of the fee.
Go for it! If you can compete with Netflix on price and quality of content and user experience, you might succeed and you might even put them out of business. That's great for everyone. I suspect, instead, that you'll get a pretty quick lesson in economics, but I encourage you to try because it can't possibly harm me if you do so and there's good upside for me if you somehow succeed.
This would provide an automatic, direct, per-customer reimbursement to the ISP for the cost of bandwidth. ISPs would sign on so fast that such a service could BURY Netflix in short order.
ISPs might sign on, but what about their customers? Why would the customer want to pay what that service is likely to cost? Or do you think you can bury Netflix without customers signing up? Owen
Owen DeLong wrote:
On Jul 13, 2014, at 16:00 , Brett Glass <nanog@brettglass.com> wrote:
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers, My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties. Why should Netflix be covering those expenses? Your customers asked for the content from Netflix. They paid you to deliver it and they paid Netflix for the content.
Not for nothing, but in the old days, if I asked Netflix to send me a CD in the mail, they paid the postage - out of the fee I paid them. Miles Fidelman -- In theory, there is no difference between theory and practice. In practice, there is. .... Yogi Berra
On 07/16/2014 05:14 PM, Miles Fidelman wrote:
Not for nothing, but in the old days, if I asked Netflix to send me a CD in the mail, they paid the postage - out of the fee I paid them.
And now they pay to pump bits out from their servers to their customers. What's your point? Doug
On 7/16/2014 8:14 PM, Miles Fidelman wrote:
Owen DeLong wrote:
On Jul 13, 2014, at 16:00 , Brett Glass <nanog@brettglass.com> wrote:
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers, My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties. Why should Netflix be covering those expenses? Your customers asked for the content from Netflix. They paid you to deliver it and they paid Netflix for the content.
Not for nothing, but in the old days, if I asked Netflix to send me a CD in the mail, they paid the postage - out of the fee I paid them.
Miles Fidelman
Yes, Netflix did pay the postage for shipping CDs out of the fee you paid them. However, the mailman drove over roads provided and maintained by taxpayers to place that CD into a mailbox that you bought, owned, and maintained. If the glut of CDs had required bigger postal vehicles, then Netflix would not have bought bigger vehicles for the postal service. If the CD didn't fit in your mailbox, then Netflix would not have paid for a bigger mailbox for you. -DMM
On Jul 16, 2014, at 17:14 , Miles Fidelman <mfidelman@meetinghouse.net> wrote:
Owen DeLong wrote:
On Jul 13, 2014, at 16:00 , Brett Glass <nanog@brettglass.com> wrote:
At 10:25 AM 7/13/2014, Charles Gucker wrote:
ALL ISPs are in the business of providing access to the Internet. If you feel the need to rebel, then I suggest you look at creative ways to increase revenue from your customers, My customers do not want me to "creatively" find ways to extract additional money from them so as to cover expenses that Netflix should be covering. Nor do they want me to subsidize Netflix subscribers from the fees from non-Netflix subscribers. They want to pay a fair price for their Internet that does not include paying ransom to third parties. Why should Netflix be covering those expenses? Your customers asked for the content from Netflix. They paid you to deliver it and they paid Netflix for the content.
Not for nothing, but in the old days, if I asked Netflix to send me a CD in the mail, they paid the postage - out of the fee I paid them.
Because that was the contract you had with Netflix. Did you also pay the post office to bring the DVD to you? (To the best of my knowledge, Netflix never shipped CDs)? Yes, if you pay Netflix to pay the delivery charges, I have no problem with them paying your ISP. However, in this case, you're paying your ISP, so Netflix shouldn't have to. My point is your ISP shouldn't get to double-dip. Owen
FCC Counsel Jonathan Sallet spoke at the USA-IGF today - I've pulled it out as a clip https://new.livestream.com/internetsociety/igf-usa-2014/videos/56799195 -- --------------------------------------------------------------- Joly MacFie 218 565 9365 Skype:punkcast WWWhatsup NYC - http://wwwhatsup.com http://pinstand.com - http://punkcast.com VP (Admin) - ISOC-NY - http://isoc-ny.org -------------------------------------------------------------- -
participants (23)
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Baldur Norddahl -
Bill Woodcock -
Brett Glass -
Daniel Ankers -
Dave Temkin -
David Miller -
Doug Barton -
George Herbert -
Hugo Slabbert -
Jared Mauch -
Jay Ashworth -
Jima -
Joly MacFie -
Mark Andrews -
Matthew Kaufman -
Matthew Petach -
Mikael Abrahamsson -
Mike Hale -
Miles Fidelman -
Owen DeLong -
Rubens Kuhl -
Tei -
Tom Hill