dslreports logo
 story category
Netflix Pushes Congress On Data Caps, Last Mile Fees
CEO: We Support 'Unlimited-up-to-a-Large-Cap Model'

Earlier this year Level3 proclaimed that Comcast was violating net neutrality by demanding they pay a new connection fee to deliver Internet video services to Comcast customers. Comcast responded by claiming the dispute was just another peering dispute. Level 3 has continued to argue that Comcast is misleading people, this wasn't a normal peering dispute, and Comcast was using their huge subscriber base as leverage to cash in on Level's handling of Netflix traffic.

The FCC has made it clear they don't plan to intervene in this fight, and that their neutrality rules don't cover these types of fights (just like they don't cover wireless, "creative" pricing, and much more). With their 61% video streaming market share at stake, Netflix is pushing Congress for rules that will cover these kinds of feuds. According to The Hill, Netflix wants rules covering what they feel are unfair gatekeeper tolls:
quote:
"Today, some ISPs charge to let bits onto their networks, despite these bits having been requested by their own consumers. As long as we pay for getting the bits to the regional interchanges of the ISPs’ choosing, we don’t think ISPs should be able to use their exclusive control of their residential customers to force us to pay them to let in the data their customers desire," he wrote. He argued that customers already pay a bill for Internet service, so it represents "an inappropriate reflection of their last mile exclusive control of their residential customers" when phone and cable companies place charges on additional parties.
Netflix CEO Reed Hastings is also pushing lawmakers on the issue of broadband usage caps:
quote:
"Moves by wired ISPs to shift consumers to pay-per-gigabyte models instead of the current unlimited-up-to-a-large-cap approach threatens to stifle the Internet. We hope this doesn’t happen, and will do what we can to promote the unlimited-up-to-a-large-cap model," Hastings said.
Netflix became considerably more vocal on the threat of metered billing on content innovation and distribution after they launched their streaming video service in Canada, and ran face first into some of the more punitive caps and overages in North America.
view:
topics flat nest 
FloridaBoy
join:2009-06-22
Bradenton, FL

FloridaBoy

Member

Fios

I am waiting for Verizon to give me the bad news about caps. I hope competition from Cablevision and others will keep them from it but I am doubtful.

For now, I guess I better enjoy what I have.
nanaki333
join:2010-08-11
Chantilly, VA

nanaki333

Member

Re: Fios

verizon already stated they currently have no plans to implement caps or overages for fios. they even mocked the competition by saying that's why they invested and future-proofed their network. they can actually handle the traffic.

Phil
Rojo Sol
Premium Member
join:2001-06-11
Downers Grove, IL
kudos:2

Phil

Premium Member

Re: Fios

said by nanaki333:

verizon already stated they currently have no plans to implement caps or overages for fios. they even mocked the competition by saying that's why they invested and future-proofed their network. they can actually handle the traffic.

For now, but how can Verizon not at some point in the future address an eroding TV/Movie market of which they are presently trying to build? If it wasn't for others in my household I'd drop TV service, which I'm sure many others are doing as well.
Crookshanks
join:2008-02-04
Binghamton, NY

Crookshanks

Member

Re: Fios

said by Phil:

For now, but how can Verizon not at some point in the future address an eroding TV/Movie market of which they are presently trying to build?

It's not an eroding market for them yet and the question is does Verizon see themselves as a telco or a cable company?

alchav
join:2002-05-17
Saint George, UT
kudos:1
·ooma

alchav

Member

Re: Fios

said by Crookshanks:

said by Phil:

For now, but how can Verizon not at some point in the future address an eroding TV/Movie market of which they are presently trying to build?

It's not an eroding market for them yet and the question is does Verizon see themselves as a telco or a cable company?

Netflex has shaken up the ISP's and the weaker ones will fail. Verizon with their FTTH has the Biggest Pipe, and will only prosper with the Streaming capability. Verizon doesn't have to chose between being a Cable Company or a Telco, they will just be able to deliver anything Digital. Like I said before, Verizon wins with their 100% Fiber!
Cobra11M
join:2010-12-23
Mineral Wells, TX

Cobra11M

Member

Re: Fios

very true, sadly i wish the isp would do the same with fiber, but no they are milkin the cable wires like they been doing for what 20-30 years??, and now they dont wanna upgrade to fiber or anything

batterup
I Can Not Tell A Lie.
Premium Member
join:2003-02-06
Netcong, NJ

batterup to Crookshanks

Premium Member

to Crookshanks
said by Crookshanks:

It's not an eroding market for them yet and the question is does Verizon see themselves as a telco or a cable company?

There is no doubt Verizon would be quite happy being THE telephone company. Universal service at a government controlled price but that is NEVER going to happen.

So some how Verizon is going to have to earn back the billions spent and hopefully going to be spent on FTTP. Can they do this getting $50 a month from 30% of the homes that FiOS passes? I don't think so.

Remember Ivan Seidenberg is retiring this year so who knows what direction Verizon will take.

45612019
join:2004-02-05
New York, NY

45612019 to Phil

Member

to Phil
said by Phil:

said by nanaki333:

verizon already stated they currently have no plans to implement caps or overages for fios. they even mocked the competition by saying that's why they invested and future-proofed their network. they can actually handle the traffic.

For now, but how can Verizon not at some point in the future address an eroding TV/Movie market of which they are presently trying to build? If it wasn't for others in my household I'd drop TV service, which I'm sure many others are doing as well.

Verizon's TV product offerings are very impressive. Probably the cheapest priced in the industry (32/25 Mbps + Phone + Hundreds of HDTV channels for $99 a month? Epic.), and the best picture quality in the biz.

They're not at risk of losing TV subscribers because with FiOS they are actually offering a good product at a good price. It's understandable that with all the rip-off companies out there (*cough cough* AT&T and the cable companies) offering shit picture quality, slow speeds, and triple play packages twice as expensive as Verizon's... those companies are losing subscribers tired of having their wallets raped for $150+ every month.

batterup
I Can Not Tell A Lie.
Premium Member
join:2003-02-06
Netcong, NJ

batterup

Premium Member

Re: Fios

said by 45612019:

Verizon's TV product offerings are very impressive. Probably the cheapest priced in the industry (32/25 Mbps + Phone + Hundreds of HDTV channels for $99 a month? Epic.), and the best picture quality in the biz.

With all of that only 30% who can get FiOS sign up. There is a reason FiOS deployment has stopped. If the people don't want to have it installed nobody can stop them.

45612019
join:2004-02-05
New York, NY

45612019

Member

Re: Fios

What's your point? I bet the percentage of customers is the same for the number of households Comcap is installed to.

People are stupid, we already knew that.

baineschile
2600 ways to live
Premium Member
join:2008-05-10
Sterling Heights, MI

baineschile

Premium Member

I mean

If Netflix did help pay transmission costs, they may have more of a case for the unlimited cap. They essentially want to use everyone else's network for their profitability.

I cant be sure about the numbers, but if they really make up 20% of internet traffic like reports say, no reason why they shouldnt help with the maitenance costs. They should either cut the backbone providers in on the profits, or pay a certain costs to help with the delivery of the content.

mob
On the next level..
Premium Member
join:2000-10-07
San Jose, CA
·SureWest Internet

mob

Premium Member

Re: I mean

It's more like the cable and telephone companies are very upset that Netflix can and is disrupting their gravy train for pay TV. Why have pay TV if you can get the same shows streamed over the internet at decent quality, when you want it, legally??
--
Ich habe kein Mitleid - Me
You're a daisy if you do. - Doc Holliday
macdude22
join:2005-09-08
Grinnell, IA

macdude22

Member

Re: I mean

Exactly. I cut the cord years ago, even before Netflix released Watch Now. At the time I had bumped up to 5 disks of Netflix which was still a steal for the amount of content you could watch. As a primarily Mac user I didn't jump on the Watch Now bandwagon until the original Roku release which I immediately jumped on. (I have a 4xxx order number for an original Roku box. We've cut back to the standard 3 disk plan and barely burn through 3-5 disks a month and that's mostly kids movies for our son but it's worth it. There's so much on watch now these days that I don't need to worry about the latest and greatest, load me up with last years 30 rock, trailer park boys, movies, what have you. It's new to me!

That said I don't begrudge anyone willing to pay the cable premium for the latest and greatest.

I would be willing to pay netflix more for some premium new SciFi content though.

battleop
join:2005-09-28
00000

battleop to mob

Member

to mob
"It's more like the cable and telephone companies are very upset that Netflix can and is disrupting their gravy train"

It's more like Netflix is very upset that the cable and telephone companies can and are disrupting their gravy train.
worfnmu
join:2002-11-14
Chicago, IL

worfnmu

Member

Re: I mean

It's both.

I have a quote that is very appropriate:

"I drink your milkshake!"

newview
Ex .. Ex .. Exactly
Premium Member
join:2001-10-01
Parsonsburg, MD
kudos:1

newview to mob

Premium Member

to mob
said by mob:

It's more like the cable and telephone companies are very upset that Netflix can and is disrupting their gravy train for pay TV.

Exactly ... and then they are misleading everyone by blaming the caps etc on "costs of bandwidth" when those costs are actually going down.
Network Guy
Premium Member
join:2000-08-25
New York
kudos:3
·T-Mobile US
·Google Voice
·Verizon FiOS

Network Guy to mob

Premium Member

to mob
said by mob:

It's more like the cable and telephone companies are very upset that Netflix can and is disrupting their gravy train for pay TV. Why have pay TV if you can get the same shows streamed over the internet at decent quality, when you want it, legally??

This

anonanon
@verizon.net

anonanon to mob

Anon

to mob
That's exactly the point about TV being the gravy train. Both the cable companies and telephone companies have cross subsidized the cost of their bundled services. In other words broadband prices can stay low because its going over the same wire that was already being used for TV services or phone services. Thus the TV and phone pay for the maintenance of the cable. Now if you cut out the services that are paying for the maintenance of the cable you'll have to increase broadband prices to compensate. Some people just don't get it.

As an example Verizon spent $23 billion to provide FTTH to approx 15.6 million homes. That's an average of $1474 per home not counting operating expenses, this is for capital expenses only. Let's say the only service offered was Internet because everyone "cuts the cord" and so there is no phone or TV subscribers, just broadband only. Assuming as many as 50% of customers subscribed to the service, it would cost $81 per month just to break even in 3 years, without counting operating expenses. Add in operating expenses (average technician earns close to $30/hr + benefits, vehicles need maintenance, repair, and gas at $3.50 per gallon, purchase of routers, ONTS, STBs, etc) and you can see broadband prices would be much higher if it were the only service the ISP offered. So yes, it makes a lot of sense that cable cos and telcos are upset that their "gravy train" is being threatened, because you can't maintain a fixed line network for $50/month with no other services to help subsidize it. If that were the case then hundreds of companies would be running FTTH and offering uncapped 1Gbps symmetrical if it could be installed and maintained for just $50/month.

And before you compare to other countries, this is not another country, this is this country, and so you have to deal with the realities of how things work in this country.
egilbe
join:2011-03-07

egilbe

Member

Re: I mean

I have a cell phone bill, plus DSL. You don't think I'm already paying for part of ATT's upgrades?
kluken
join:2002-12-31
Marietta, GA

kluken to anonanon

Member

to anonanon
I'm fine with tiered pricing and maybe some caps, but honeslty, capping me at 250GB when I already pay a premium for my 24/3 UVerse and apply the same cap to the guy next door paying 1/3 or 1/2 what I pay for his 6MB UVerse is stupid. Then tier the caps to encourage people to upgrade. Offer unlimited on the highest speed or cap me at a proportional number to the service, if I pay for twice the pipe I shoudl get twice the cap!
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25 to anonanon

Member

to anonanon
So now you want to make pure profit on capitalized expenses in 3 years? Why wait that long, lets do it from day one and just charge $1500 a month? This expense, as you put it, will be capitalized probably over 15 or 30 years and will greatly reduce the actual expense to maintain their network anyway (copper is more expensive to maintain).

I pointed this out in another thread a week or two ago but if you look at companies that are being bought/sold they generally list the # of customers they will be acquiring with that. In the last one, not sure who it was, but the "cost per customer" was over $5000. Yet that company will be bought for around that and it will be considered a "good investment". Explain to me the different between spending only $1500 to retain a customer or add more value to that customer by investing in the network and outright buying them for $5000. (ignoring acquired assets as some will be needed and others can go, but the cost would still more than likely be greater).
luckylar
join:2002-01-29
Clarkdale, AZ

luckylar to anonanon

Member

to anonanon
Your figures may be right, but it seems you're applying $1474 to each of those 15.6 million homes PASSED... NOT hooked up. It would seem that the cost of $1474 would be to run AND to hookup a home... NOT just pass it. So with that said, your figure of $81 per month with 50% hookup would be halved.... at least.
jj_frap
join:2003-12-15

jj_frap to anonanon

Member

to anonanon
Your math would make more sense if you ignore pricing in Western Europe, Korea, and Japan.
jcremin
join:2009-12-22
Siren, WI
kudos:3

jcremin

Member

Re: I mean

said by jj_frap:

Your math would make more sense if you ignore pricing in Western Europe, Korea, and Japan.

The pricing in other countries is totally irrelevant to pricing in the USA.

theWabbit
@hp.com

theWabbit to anonanon

Anon

to anonanon
I agree with you in relation that the initial costs would be high; but disagree with you on your other points. Some of the benefits of the technology being deployed would be higher capacity in terms of user density and lower operational costs over time. When a monthly charge get’s put into place it assumes a minimal number of customers are required to break even with a marginal incremental cost to accommodate growth. Once you reach your breakeven point everything the gravy train kicks in; monthly rate does not change once your reach the break-even point over time. As you invest further to bring on new services and even add additional capacity over time your costs will average out to a point that your operational costs begin to decrease. New services generate additional revenue streams and the optimization of your operational costs increase the bottom line (margin) year over year. Over time what will happen a plateau is reached where there is no more growth and things remain flat. Changes in user usage patterns and embracement of new technologies will either impact capacity and operational costs, which will result in higher usage fees to the end user.

Having the right infrastructure in place ensures the lifecycle of your product maintains profitable for years to come.

fifty nine
join:2002-09-25
Sussex, NJ
kudos:2

fifty nine to mob

Member

to mob
said by mob:

It's more like the cable and telephone companies are very upset that Netflix can and is disrupting their gravy train for pay TV. Why have pay TV if you can get the same shows streamed over the internet at decent quality, when you want it, legally??

It's more like Netflix is undercutting them by not having the costs of building out a last mile network.

ArrayList
DevOps
Premium Member
join:2005-03-19
Boston, MA

ArrayList

Premium Member

Re: I mean

why should netflix provide a network?
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

Re: I mean

They do provide a network through the purchase of their internet access through L3.

But I do agree with what you are saying.... why should Netflix have to build their own network to get to their customers? Why should they even have to lease network access from every ISP between them and their customers? If they have to do it, shouldnt every service and every website have to do the same thing?

ArrayList
DevOps
Premium Member
join:2005-03-19
Boston, MA

ArrayList

Premium Member

Re: I mean

thats exactly right. kind of defeats the purpose of a packet switched network.

baineschile
2600 ways to live
Premium Member
join:2008-05-10
Sterling Heights, MI

baineschile to Skippy25

Premium Member

to Skippy25
Not every website does that much traffic to warrant that much. if netflix is truly taking ove rhte pay TV industry, they might as well cut in the old cable co's to use their networks.....
Chubbysumo
join:2009-12-01
Superior, WI
·Charter

Chubbysumo to Skippy25

Member

to Skippy25
said by Skippy25:

They do provide a network through the purchase of their internet access through L3.

But I do agree with what you are saying.... why should Netflix have to build their own network to get to their customers? Why should they even have to lease network access from every ISP between them and their customers? If they have to do it, shouldnt every service and every website have to do the same thing?

netflix's bits have been paid for in two ways already by the time they reach your home. The first is by your direct subscription. This goes to maintain Netflix's end of the network. The second(if on concast) is now comcast charges level3 to access their customers. This is a simple double dip. Comcast has already had your traffic paid for by you, on their monthly bill, and they want netflix to pay for it again.
jcremin
join:2009-12-22
Siren, WI
kudos:3

jcremin to mob

Member

to mob
said by mob:

Netflix can and is disrupting their gravy train for pay TV. Why have pay TV if you can get the same shows streamed over the internet at decent quality, when you want it, legally??

Many people forget that the Phone service and TV programming is where much of the money came to initially support the expansion of internet services for many providers... Obviously internet-only services have become plenty profitable for many Cable ISP's like Comcast or for DSL providers who's current infrastructure has long been paid for in most cases.

But as a small rural ISP, I'd really like to start deploying fiber into my existing footprint.. Only problem is that the entry cost for deploying fiber is still quite high and it's almost impossible for the investment to pay off by only providing internet access at $20/mo. I would prefer to remain strictly an ISP and not venture into video and phone services, but I don't see any way to avoid it... But then again, if everyone wants to just stream over the internet, is it even worth it? How do I pay for my multi-million dollar investment? Jack up the price of internet? Everyone will run screaming that they are getting ripped off... Deploy TV services and try to protect myself when another service threatens that money? People will run screaming again.

The short story is that everyone wants more, and everyone wants to pay less, but that the money has to come from somewhere to build more infrastructure. And don't confuse my comment for defending the the few huge ISP's that already have billions of dollars in profit.. I'm talking about the rest of the ISP's that are trying to compete with those who already have a stranglehold on the market.

••••••••••••••••••

nukscull
@rr.com

nukscull to mob

Anon

to mob
But the point is, you CAN'T get the same shows that are on pay TV right now. You can get what is in repeats. But you can only get what is available on DVD.

Without pay TV, Netflix wouldn't have much of a business for TV shows, since none of the shows would exist on DVD.

Netflix is not yet at the point where they can take over as a distribution model. The makers of those shows have to get their shows on TV first at this point to make money and to release on DVD.

Until Netflix is signing up popular TV shows for exclusive distribution, the pay TV companies don't have much to worry about. And even then, ALL of those companies are ISP's. So they have NOTHING to worry about except what kind of caps they are going to set and how many dollars per gig they are going to charge.

baineschile
2600 ways to live
Premium Member
join:2008-05-10
Sterling Heights, MI

baineschile to mob

Premium Member

to mob
said by mob:

It's more like the cable and telephone companies are very upset that Netflix can and is disrupting their gravy train for pay TV. Why have pay TV if you can get the same shows streamed over the internet at decent quality, when you want it, legally??

You couldnt be more right. All the more reason for the TV/ISP companies to protet their interests.
egilbe
join:2011-03-07

egilbe

Member

Re: I mean

Or they could change their business model to be more like Netflix's
jcremin
join:2009-12-22
Siren, WI
kudos:3

jcremin

Member

Re: I mean

said by egilbe:

Or they could change their business model to be more like Netflix's

I think that is already starting to happen... On-Demand content is increasing quite a bit, but most providers are still playing catch up....
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25 to baineschile

Member

to baineschile
You are confused in your thoughts.

Netflix does help pay for the cost to help maintain and deliver their content on the internet. Do you think they are connected to the internet for free and don't have a bandwidth bill?

The single biggest network they use on the internet is Level 3's. And if L3 feels they are being compensated enough by Netflix for the amount of traffic they use then there is not an issue.

All other connections are related to ISP's and their interconnects. If ISP's are not happy with the amount of money they are getting from their consumers to help them pay for maintenance on their network, then they should probably raise their rates or lower their bandwidth availability. Remember, not a single bit leaves Netflix that was not explicitly requested for by the end user.

fifty nine
join:2002-09-25
Sussex, NJ
kudos:2

fifty nine

Member

Re: I mean

said by Skippy25:

You are confused in your thoughts.

Netflix does help pay for the cost to help maintain and deliver their content on the internet. Do you think they are connected to the internet for free and don't have a bandwidth bill?

Based on how their CDN vendors want to bully ISPs into taking their traffic for free, I'd say that their vendors have an unrealistic expectation of what it costs to deliver content end to end. It may or may not reflect Netflix's thinking.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

Re: I mean

They bully them into taking their traffic for free? Are you sure about that statement?

I don't see L3 telling Comcast they have to accept their traffic. As a matter of fact I don't see a single tier 1 backbone provider telling Comcast or any other ISP they HAVE to accept their traffic. If one of said ISP's subscribers wants traffic but the ISP doesnt want to pass on that request to a tier 1 provider or allow a tier 1 to pass the request back to them, that is between the ISP and their subscibers.

What I do see though are ISP's that should be "grateful" they have a tier 1 backbone provider to link to so that the customers they sell INTERNET service to can actually participate on the internet to obtain the services of their choice and not in some AOL walled garden limited by the services that said ISP provide on their own. I am pretty sure that is 100% the reason every single subscriber pays that ISP every month. If you know of a different reason, please share.
macdude22
join:2005-09-08
Grinnell, IA

macdude22 to baineschile

Member

to baineschile
Netflix pays for bandwidth. I pay for bandwidth. I'm not sure why the ISPs feel the need to double dip other than they think they can.

Corehhi
join:2002-01-28
Bluffton, SC
·Hargray Cable

Corehhi

Member

Re: I mean

said by macdude22:

Netflix pays for bandwidth. I pay for bandwidth. I'm not sure why the ISPs feel the need to double dip other than they think they can.

Years ago the movie industry fought VCR's tooth and nail because they thought they would lose out on money. What happened was the invention of rental store and the movie industry never made that kind of money before. People didn't have cable back then for the most part and HBO, Show time etc were just more revenue. Cable TV penetration also gave the movie industry more revenue by having more movies played on more channels. All involved never made some much money.

Everyone in entertainment will fight for every dollar they can get their hands on and try to kill off any competitor they can. Period. That's the way that business works. They flat out hate change of any kind.

Why would an ISP not go after Netflix??? Netflix built a business that most thought would fail or it would be just a simple mail order operation. ISP's put no money into anything like NetFlix now it has succeeded and the cash creature needs to be tamed by the ISP's.

Their all big boyz let them fight it out. Realize L3 is not a child and for that matter the ISP's have to be careful not to do something that wakes up Google, Microsoft etc. Those guys all can darken the sky's with lawyers if they feel it's worth their time.
bcoleman71
join:2007-09-18
Dallas, TX

bcoleman71 to baineschile

Member

to baineschile
said by baineschile:

If Netflix did help pay transmission costs, they may have more of a case for the unlimited cap. They essentially want to use everyone else's network for their profitability.

I cant be sure about the numbers, but if they really make up 20% of internet traffic like reports say, no reason why they shouldnt help with the maitenance costs. They should either cut the backbone providers in on the profits, or pay a certain costs to help with the delivery of the content.

This has got to be by far the dumbest argument I've read on BBR this whole week...possibly this whole entire year! Are you saying that Netflix should pay for the maintenance of their own connection to the network as well as maintenance of their customers as well? That's completely ridiculous!! It's that kind of thinking that has allowed this country to fall in it's rankings technologically!

As a paying customer to my ISP, my connection should be maintained by the money I send them every single month for access to use their network. And all of this crap about them charging extra for usage beyond a certain amount is total BS. They didn't produce that content so they shouldn't be allowed to charge you to access it. You're paying for the connection to the network and you're paying, in the case of Netflix, to receive their content. You've already paid the ISP for the permission to receive that content over their network.

The ISP should not be allowed to limit how much content you choose to receive! They are an Internet Service Provider and *NOT* the content producer and not the content provider. They should not be allowed to charge you for someone else's content. You've already paid them to access the internet and you've already paid the content provider to receive that content.

For everyone who is against this issue, this is sort of a call to arms because we need to fight this idea vigorously every single time it comes up because people who don't understand this issue are going to roll over and allow it to happen!

•••
BlueC
join:2009-11-26
Minneapolis, MN
kudos:1
·Xfinity
·Integra Telecom

BlueC to baineschile

Member

to baineschile
Netflix already pays their share. They pay to transmit their data via carriers. Comcast already gets paid by vendors to connect to their network.

The only concern would be the last mile, but that's Comcast/Verizon/AT&T/etc's deal. They own the infrastructure. If their customers are requesting more and more traffic and it's becoming a burden, that's the ISP's problem.

The reality is all of these ISP's are making healthy margins on their internet services. Netflix doesn't cause any harm, they just so happen to be a common source of traffic. This does NOT make them liable for maintenance costs on other networks. The idea of making them pay into last mile maintenance for someone else's customer is just ridiculous.

•••••••••••••••••••••

j653
@windstream.net

j653 to baineschile

Anon

to baineschile
Netflix doesn't pay transmission costs, but it's users certainly do!
Verizon will run a voice phone line to my house for $6.87 w/ unlimited local calling. A 7mbps Verizon DSL line costs me $40 a month. Do you think the data side of my connection costs Verizon over $30 a month? Doubtful.

batterup
I Can Not Tell A Lie.
Premium Member
join:2003-02-06
Netcong, NJ

batterup

Premium Member

Re: I mean

said by j653 :

Netflix doesn't pay transmission costs, but it's users certainly do!
Verizon will run a voice phone line to my house for $6.87 w/ unlimited local calling. A 7mbps Verizon DSL line costs me $40 a month. Do you think the data side of my connection costs Verizon over $30 a month? Doubtful.

POTS is regulated; not only is the price but Verizon MUST supply POTS to anyone any ware in their area. No local franchise no ToS, they can't cut off your POTS like they can your DSL for any reason they may chose to. Funny how that works.

theWabbit
@hp.com

theWabbit to baineschile

Anon

to baineschile
All these discussions become very confusing; if I'm paying as a user to access the internet am I not paying the transit costs associated with the websites I connect to? I am under the assumption Netflix or any other website pays for their costs for delivery and the end user pays for their costs to access it which is the transfer to their own system. The only way this data would be transmitted to me is if I request it. I feel this is a lame argument for additional costs that are not applicable. Everyone pays their fair share in my books.

Juan584
@att.net

Juan584 to baineschile

Anon

to baineschile
Presumably Netflix is already paying for "transmission costs" since they are paying Level 3.... So, I guess you mean that Netflix should pay every other ISP too. It seems odd to me but I guess they should have to pay every ISP to use their "dumb pipe" since they clearly must incur some new cost, which I have missed. Yet, I find myself wondering why in the world it makes sense for me to pay for Netflix, internet, and then find out that my ISP is incapable of delivering the product that I am paying for. Please note this simple logic never works in the states anymore since we seem to have taken the approach that if it is new and innovative we need to stifle it as well as pay more for it because the market is always right.....

••••••••••

vzw emp
@144.191.148.x

vzw emp to baineschile

Anon

to baineschile
Wait. So Netflix transmits countless amounts of video traffic over the internet and doesn't pay a fee to do so? Who is their ISP and how can I sign up?

Someone has to explain this one to me. I'm assuming someone is charging Netflix for the amount of bradband they are using, right? If that's the case then why impose an additional fee for "transmission" costs? Isn't that what they pay for in the first place? Shouldn't these "maintenance" costs be part of what they are already charged? Or are these additional charges just being tacked on by carriers looking to leech even more money from an already paying customer (in this case, Netflix)?

Corehhi
join:2002-01-28
Bluffton, SC
·Hargray Cable

Corehhi to baineschile

Member

to baineschile
said by baineschile:

If Netflix did help pay transmission costs, they may have more of a case for the unlimited cap. They essentially want to use everyone else's network for their profitability.

I cant be sure about the numbers, but if they really make up 20% of internet traffic like reports say, no reason why they shouldnt help with the maitenance costs. They should either cut the backbone providers in on the profits, or pay a certain costs to help with the delivery of the content.

Don't even speak such nosense.

NOCTech75
Premium Member
join:2009-06-29
Marietta, GA

NOCTech75 to baineschile

Premium Member

to baineschile
said by baineschile:

If Netflix did help pay transmission costs, they may have more of a case for the unlimited cap. They essentially want to use everyone else's network for their profitability.

I cant be sure about the numbers, but if they really make up 20% of internet traffic like reports say, no reason why they shouldnt help with the maitenance costs. They should either cut the backbone providers in on the profits, or pay a certain costs to help with the delivery of the content.

They already do, at their server farms they have circuits which are paid for. Who ever they are buying circuits from has to tie in to others networks, which means they buy circuits from them. More traffic, means more circuits purchased and more peering agreements with all providers.

Snakeoil
Ignore Button. The coward's feature.
Premium Member
join:2000-08-05
Mentor, OH
kudos:2

Snakeoil to baineschile

Premium Member

to baineschile
You mean if Netflix's customers paid for the transmisson costs.
Which is what would happen. Netflix would raise rates to cover the charges. Then you'll see Netflix going the way of blockbuster as people return to newgroups/bit torrent yet again.
Or maybe not Block buster, but maybe Hulu like. Where you pay to get fed ads with the streaming media.
Main reason I won't subscripe to Hulu the ads. Now maybe if they offered an ad free service.
--
To All Real Dads. For All Real Moms Every Real
Service.
Chubbysumo
join:2009-12-01
Superior, WI
·Charter

Chubbysumo to baineschile

Member

to baineschile
said by baineschile:

If Netflix did help pay transmission costs, they may have more of a case for the unlimited cap. They essentially want to use everyone else's network for their profitability.

I cant be sure about the numbers, but if they really make up 20% of internet traffic like reports say, no reason why they shouldnt help with the maitenance costs. They should either cut the backbone providers in on the profits, or pay a certain costs to help with the delivery of the content.

The end user has already paid for the transmission of the content from the server to their home, and in fact this is paid for for every "peer" in the monthly bill. Comcast is essentially "double dipping" by charging the backbone provider "level3" AGAIN for the bits that comcast customers have requested and paid for already.

you reek of ignorance. Learn to understand the reason level3 is fighting this so hard.

88615298
Premium Member
join:2004-07-28
West Tenness

88615298 to baineschile

Premium Member

to baineschile
said by baineschile:

If Netflix did help pay transmission costs, they may have more of a case for the unlimited cap. They essentially want to use everyone else's network for their profitability.

I cant be sure about the numbers, but if they really make up 20% of internet traffic like reports say, no reason why they shouldnt help with the maitenance costs. They should either cut the backbone providers in on the profits, or pay a certain costs to help with the delivery of the content.

God I hate these uninformed or just completely ignorant comments.

A) Netflix pays for it's bandwidth.

B) The customers also pay for bandwidth when they pay their ISP bill.

C) Ever think the reason why I am willing to pay $55 a month for 18 mbps internet is because of streaming video? If I can't stream video I might as well go back to a 1 Mbps $20 tier. I wonder how much profit my ISP would make if everyone did that? But at least their "pipes" won't be clogged right?

sivran
Vive Vivaldi
Premium Member
join:2003-09-15
Irving, TX
kudos:2

sivran to baineschile

Premium Member

to baineschile
So Netflix should pay for their bandwidth twice? Three times? Four times? X-number of ISPs times?


--
Think Outside the Fox.
mworks
join:2006-06-13
Rose Hill, NC

mworks to baineschile

Member

to baineschile
Netflix is paying for the connection to the internet to their providers on their end and it is that provider that should be charging netflix more not comcast or any other ISP. The way it works is if I want to send massive amounts of traffic I pay my connection point only. It is up to that provider then to negotiate contracts and work out the details to get it to the other end.

The complaints are not netflix problem. If I pay a provider that tells me they can do the job for xxx amount and then they find out later that some ISP have problems with it, that isn't something I should have to concern myself with. If providers cannot handle the heat from ISP of transporting netflix content then don't agree to the contracts to deliver it.

Level3 is angry because they lost the deal with netflix to another provider that offered a better price. If comcast gave the other company a better deal, tough, that is business.
genewitch
join:2007-09-12
Klamath Falls, OR

genewitch to baineschile

Member

to baineschile
er, netflix does pay for maintenance and bandwidth costs. This move by comcast is anti-competitive - plain and simple. Netflix pays for the bandwidth they use to send bits out to the end user, comcast is saying that netflix should pay again to enter specifically comcast's network. this is a pure net neutrality issue. I want to see comcast do this with google.

Streaming costs money. It shouldn't cost twice just because comcast has a service they are trying to push. Remember when microsoft forced users to use IE? same thing. If netflix has to pay extra to deliver to comcast customers, who do you think gets the rate hike? If netflix were smart, they'd only charge comcast customers extra if netflix is forced to pay this toll. We'll see how many comcast customers enjoy feeling it alone from their ISP.
egilbe
join:2011-03-07

egilbe to baineschile

Member

to baineschile
The reason why Netflix is so popular is because of freedom of choice of what to watch, when you want to watch at a very reasonable price. There is no reason that the content providers can't do the same damn thing Netflix is doing. Instead of an OTA broadcast, use the internet to distribute your product when the customer wants it, at a reasonable price.

TWC's ONdemand service is a joke. It's overpriced and it's a very limited selection

I heard Showtime was pulling it's product away from Netflix because Showtime felt it was competing with Netflix with it's own product. I have news for you Showtime. I wouldn't pay your fees because it's too much money. I don't have the freedom of when to watch TV shows. They are in a particular time slot, that's not convenient for me. I'm the customer. Give me the choice to watch it, when I want to, not when I'm forced to.

If things keep going the way it is, I wouldn't be surprised if the federal government didn't step in and say "enough of the internet being a toll road! From now in it's a publicly funded "highway system" Municipalities want more internet (read roads) they have to raise bond money to have that built out. All the backkbones would be like the interstate highway system, built for the public good.

batterup
I Can Not Tell A Lie.
Premium Member
join:2003-02-06
Netcong, NJ

batterup

Premium Member

Re: I mean

said by egilbe:

If things keep going the way it is, I wouldn't be surprised if the federal government didn't step in and say "enough of the internet being a toll road! From now in it's a publicly funded "highway system" Municipalities want more internet (read roads) they have to raise bond money to have that built out. All the backkbones would be like the interstate highway system, built for the public good.

That is funny. You want me to pay for you to watch old "B" movies. I don't think so. Nothing tangible comes over the interweb; the interweb is not a truck. Once you watch your dancing cat video it is gone forever and did not do me one whit of good.
egilbe
join:2011-03-07

egilbe

Member

Re: I mean

Why not? fuel taxes go to road upgrades and maintenance. populations shift, and highways are built with tax or bond money to meet increased demand. I'm pretty sure I've paid a few dollars to make your traveling easier and vice versa. If the taxpayers don't want to spend the money, they don't have to, but they can suffer with the congestion. It's a valid analogy. People don't have to travel toll roads if they don't want to. There are alternate routes, but they are usually slower and longer so some will pay more for the faster, shorter travel. But the interstates, now. Those are the backbone of the nation and they are free, public roads built for the entire nation to use.

FLATLINE
join:2007-02-27
Buffalo, NY

FLATLINE to baineschile

Member

to baineschile
Your still missing the point. I requested that data and Im paying that bill. Netflix shouldnt have to pay twice. Especially since im already paying for my end. So by your logic if Netflix has to pay it then I shouldnt have to. But I do have to so.....
NeoandGeo
join:2003-05-10
Harrison, TN

NeoandGeo

Member

.

I'm glad I'm on an ISP that is trying desperately to stay afloat and won't enforce hard caps since it will be another lost customer. I will continue to use 750GB+ a month and not give it another thought.

••••
brianiscool
join:2000-08-16
Tampa, FL
kudos:1

brianiscool

Member

YES!`

Fight the caps!
neftv
join:2000-10-01
Broomall, PA

neftv

Member

Spoil it

Anything to spoil the consumer entertainment. Pretty soon we won't have TV and we won't have internet because of it. We will entertain ourselves with out thumbs up our butts so we wont have to worry about who pays for what and for what reason. And no worries on Caps that way too.
I guess they don't want us to have TV or internet. This certainly not going to encourage me to get pay channels or even regular channels if they Cap this cap that charge for this charge for that. I will just suffice with over the air local TV. This mentality of corporate America wanting to make a million $ over night every night has to stop in this country or we not going to progress at all. Maybe I don't know what I am talking about so I will stop here.

•••••
Mr Matt
join:2008-01-29
Eustis, FL
kudos:2
·Xfinity
·CenturyLink
·Millenicom

Mr Matt

Member

The Interstate Commerce Commission fixed the Railroads!

Netflix pays whoever transports their physical media. There are many delivery companies including the USPS to negotiate with in order to get the best deal. In the case of Netflix they have only one or two ISP's to negotiate with.

The ICC was established to stop the railroads from gouging and discriminating against the shippers. We need the same action from the government regarding broadband service. Unfortunately responsible action is unlikely because lawmakers have been bought by the broadband industry. By the way there was no free lunch in the 1850's, under the ICC because the shipper had to pay to carrier to transport the merchandise.

28619103
Premium Member
join:2009-03-01
21435

28619103

Premium Member

Re: The Interstate Commerce Commission fixed the Railroads!

said by Mr Matt:


The ICC was established to stop the railroads from gouging and discriminating against the shippers. We need the same action from the government regarding broadband service.

Transit prices for content has dropped considerably and steadily every year. Paid-peering and transit prices are kept in check via heavy competition in the transit world. The market works.

Anyone claiming differently is just asking for "free" access FOR THEM which means that ALL the end to end network costs shift to ONLY the end users.

jig
join:2001-01-05
Hacienda Heights, CA

jig

Member

what?

since when do we have unlimited up to a large cap model? what does that even mean?

he just gave away the whole battle - the majority model now is unlimited up to your speed restrictions. period.
--
Catapultam habeo. Nisi pecuniam omnem mihi dabis, ad caput tuum saxum immane mittam.

Corehhi
join:2002-01-28
Bluffton, SC

Corehhi

Member

If it was up to some of you buttholes

An update from MS would cost you money because years ago in the 56K world you would have said, "sure caps are fine we have to pay are fair share." Caps would have been something like 50 megs. You would still have that exact cap, trust me.
Cobra11M
join:2010-12-23
Mineral Wells, TX

Cobra11M

Member

Re: If it was up to some of you buttholes

thats very true, these guys with the caps is noncence, AT&T and others will not rise the caps, they will keep them at that place, and thats where this all fails, if they want to do payper usage ok fine, 500gb is about what 32 dollars??, hey that sounds better to me, and thats on the fastest speed.., i mean really, 1 gb is about .1 or so, even if its .10, they still make money, you pay 60 bucks or so for internet when you only use 2 or 10 dollars of it...hmm they makin money anyways, i would understand the argument if the cable companys put fiber, but they are not, they keep messing with copper cables wich should be put out of its missery

28619103
Premium Member
join:2009-03-01
21435

28619103

Premium Member

Netflix wants the ISP (customers) to pay for their traffic

Or more specifically, they want EVERYONE to share THEIR transportation costs.

The Internet was built on a transportation bartering model (aka peering) This means that I will let your customers use my roads and you will let my customer use your roads. As long as we are each building roads, have similar traffic and investment, we won’t charge each other. More recently there are networks that have found it is more profitable to sell other peoples roads vs building their own. i.e. It is cheaper for me to sell the on-ramp to your road. This upsets the bartering balance as one company has all the road costs while the other can sell for below cost (they only need a toll booth on your on-ramp) and collect all the revenue.

The Internet is made up from the payments of two parties. Senders (content) and Receivers (or eyeballs) each pay a portion (say ½) of the end to end. Networks typically have a balance of both senders and receivers which makes the bartering model work. If a network becomes predomenently a “sender of traffic” or CDN based, they normally are required to pay settlement to receiving networks to balance their share of the end to end costs. Receiving networks carry the traffic the longest (say 90%) and have all the network costs.

Since the network is funded by both senders and receivers, if one party decides it should be “free” for them and their customers (e.g. Level 3/Netflix), that means the other party must pay for their portion of the network and pass those costs on to their customers (e.g. you). More profits for the senders and more costs for the receivers.

This strategy is called cost-shifting... don't be fooled.

••••••


How about ..