Re: S.Korea broadband firm sues Netflix after traffic surge
Doug Barton wrote:
One incentive I haven't seen anyone mention is that ISPs don't want to charge customers what it really costs to provide them access. For the sake of argument, let's assume this is true.
For this to work, I am really trying hard to ignore inconvenient facts like: "South Korea’s SK Telecom (SKT) has reported operating revenues of KRW4.818 trillion (USD4.2 billion) for the quarter ended 30 June 2021, up 4.7% year-on-year, with it saying that the increase was ‘due to continued solid growth trends in all business areas’. SKT’s operating income in Q2 2021 totalled KRW397 billion, up 10.8% on an annualised basis..." https://www.commsupdate.com/articles/2021/08/12/sk-telecom-reports-revenue-i... Nevertheless, let's go with the hypothesis that service is provided below cost. Providing access is mostly fixed costs, as there are very few consumables in running a network. IP transit costs aren't an issue, since Netflix will do settlement free peering. This leaves the internal network of SK Telecom as the problem and cost center. There would have been no marginal cost if SK Telecom's own network was capable of handling the traffic of its customers. So basically SK Telecom is mad at Netflix for forcing equipment upgrades faster than budgeted. Should Netflix have to pay for SK Telecom sucking at traffic planning and budgeting? - Jared
Hello,
Providing access is mostly fixed costs, as there are very few consumables in running a network.
IP transit costs aren't an issue, since Netflix will do settlement free peering.
This leaves the internal network of SK Telecom as the problem and cost center.
Even with that. Netflix can also host at their point of presence their proxies. Remember the proxies can push up to 400Gbps of stuff with about 500W of power. So even if they have issues in their network this is their job to make the things done correctly. Paying just the electricity bill for a bunch of server is less expensive than buying several 100G long haul links. That's a point and this is their problems if those guys didn't wanted a cache in their network. Regards, Xavier
On Oct 12, 2021, at 09:04 , Jared Brown <nanog-isp@mail.com> wrote:
Doug Barton wrote:
One incentive I haven't seen anyone mention is that ISPs don't want to charge customers what it really costs to provide them access. For the sake of argument, let's assume this is true.
For this to work, I am really trying hard to ignore inconvenient facts like:
"South Korea’s SK Telecom (SKT) has reported operating revenues of KRW4.818 trillion (USD4.2 billion) for the quarter ended 30 June 2021, up 4.7% year-on-year, with it saying that the increase was ‘due to continued solid growth trends in all business areas’.
SKT’s operating income in Q2 2021 totalled KRW397 billion, up 10.8% on an annualised basis..."
https://www.commsupdate.com/articles/2021/08/12/sk-telecom-reports-revenue-i...
Nevertheless, let's go with the hypothesis that service is provided below cost.
Providing access is mostly fixed costs, as there are very few consumables in running a network.
IP transit costs aren't an issue, since Netflix will do settlement free peering.
This leaves the internal network of SK Telecom as the problem and cost center.
There would have been no marginal cost if SK Telecom's own network was capable of handling the traffic of its customers.
So basically SK Telecom is mad at Netflix for forcing equipment upgrades faster than budgeted.
Should Netflix have to pay for SK Telecom sucking at traffic planning and budgeting?
Apparently SK Telecom thinks so. Not surprising since they certainly aren’t the first eyeball ISP to put forth this notion. Owen
participants (3)
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Jared Brown -
Owen DeLong -
Xavier Beaudouin