Incumbents Unsurprisingly Not Rushing Toward Netflix 3D Streams → Re: Why would they?

I believe the biggest point you are missing is that Netflix is going to be eating into their revenues regardless so it would be to their benefit to work with them to save them both money.

Do you think subscribers are going to cancel Netflix just because they can't get this upgraded service? No, they are going to continue to stream movies OR if they have the option and it is important enough to them they may very well change services to get the upgraded Netflix. So now the ISP has to deal with Netflix traffic passing their peering points and possibly losing customers which again will effect their revenue. Again, it would be to THEIR benefit to work with Netflix to save them both money.

Smaller ISP's could still benefit if they had to pay for the caching servers and connection as well. Ultimately it would be for them to decide if it is cost benefit enough as their customers are going to request the Netflix data. Would it make more since for it to all have to pass 1 time to get to many people on their network or do it for every customer that request it?

BTW I really don't disagree with you or the other side, something is missing

1. I agree it's really a win for all

but

2. Verizon and Redbox have Instant

3. This "OpenConnect" CDN, I don't care what's it's called - is something that Netflix would normally have to PAY Verizon to connect to. - just as Netflix PAYS Level 3. So offering this new CDN for "free" is not an incentive for Verizon.

4. Verizon Owns and Operates this place:
Miami, FL: NAP Of The Americas
»www.terremark.com/data-c ··· cas.aspx

Verizon can freely peer with almost anyone if they wanted to. But they don't. That's how the Internet works. The Tier 1's are all friends. The others have to pay the Tier 1's if they want to connect.

Can you throw out how you define "smaller ISP's"? I operate an EXTREMELY small ISP, and don't consider my network anywhere close to even being large enough to be considered "small" but even so, it takes a heck of a large network to be able to get any benefit from the servers.

Even if Netflix were to give me the caching server, I need to supply it with a 5 gbps connection in order for it to update the content nightly. In a metro area where you have access to datacenters containing many of the Tier-1 providers, sure, that's no problem. You can do the peering then too.

But for any ISP in rural areas, this is a non-starter. It costs $5,000 a month in my region just to get a 100 mbps fiber connection to backhaul bandwidth from a metro area. The prices per meg go down as you go to gigabit and above, but still that's a hell of a price tag just to feed the caching server, and I consider any ISP big enough to have that much traffic to not be considered "small" anymore. Sure, they may not be giants like VZ, etc, but I consider that to be at least a medium to large provider.