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AT&T Also Says They're In Talks With Netflix
by Karl Bode 06:09PM Monday Feb 24 2014
On the heels of Comcast striking a direct interconnection relationship with Netflix, Verizon today stated that they too had been in negotiations over such a deal for much of the last year. Not to be outdone, AT&T also says a deal is underway in a statement e-mailed to DSLReports (and everyone else). AT&T didn't state how long these negotiations had been underway, or when they expected to come to an agreement.

"We’re in discussions with Netflix to establish a more direct connection between our networks, similar to agreements we have with others, so that AT&T broadband customers who use Netflix can enjoy an even better video experience."

Comcast's deal likely came first because they're eager to look good for regulators reviewing their Time Warner Cable acquisition -- and as such might have agreed to terms both AT&T and Verizon have not. How good these new deals will be over time is something that's clearly worth discussing. The biggest issue continues to be that they're entirely non-transparent to the end user at a time where end users are being increasingly impacted by negotiations (carriers are fortunate they've been allowed both).

That's something the FCC has hinted they may be interested in taking a look at -- for whatever that winds up being worth.

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lemonade

join:2003-12-13
Los Angeles, CA

How about Charter

Funny there's no news about Charter, I'm also experiencing slow down on Charter's network, I had to VPN back to my alma mater to get HD...
DigitalManny

join:2014-01-08
Glendale, CA

Re: How about Charter

said by lemonade:

Funny there's no news about Charter, I'm also experiencing slow down on Charter's network, I had to VPN back to my alma mater to get HD...

Same here since December 2013 and this happens around 5:50pm until 12 AM, seriously annoying that no is taking the blame do bother talking to Netflix they will say it is your ISP and when you talk to your ISP they blame Netflix and you will go around in circles.
DarkenMoon97

join:2013-11-14
New Baden, IL
I'm not getting any slow-downs on Netflix. I still get HD within seconds of starting a stream.

SlowFITL

join:2012-02-01
Mobile, AL

1 recommendation

So what.....

It won't matter for me and much of their customer base. When you leave your customers with a slow DSL connection it doesn't really matter how good the connection agreement with Netflix is.

byeCogent

@comcast.net

It is dump Cogent Day

1st Comcast, then Verizon, & now AT&T. Cogent has just lost a huge portion of the traffic they carried for Netflix. I wonder what was in the contract between Netflix & Cogent in this eventuality. I haven't seen any statements yet from Cogent. I look forward to see what they have to say.

byeCogent

@comcast.net

Re: It is dump Cogent Day

said by byeCogent :

1st Comcast, then Verizon, & now AT&T. Cogent has just lost a huge portion of the traffic they carried for Netflix. I wonder what was in the contract between Netflix & Cogent in this eventuality. I haven't seen any statements yet from Cogent. I look forward to see what they have to say.

Cogent's banks and Wall St aren't worried about Cogent carrying less Netflix traffic:
»www.thestreet.com/story/12442215···day.html

Netflix is an important customer for Cogent, though Wells Fargo released a note Monday saying the streaming service accounts for less than 2% of Cogent's revenue.

A separate note from Citigroup says Netflix accounts for 1.7% of Cogent's revenue, and notes that Comcast's rate is likely above the rate Cogent charges Netflix.

The gross profit margin for COGENT COMMUNICATIONS GRP is rather high; currently it is at 57.27%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 58.53% significantly outperformed against the industry average.


byeCogent

@comcast.net

Re: It is dump Cogent Day

Cogent speaks. Stock price down 7%, but CEO says don't worry, be happy.
»www.reuters.com/article/2014/02/···20140224

Shares of Cogent Communications, one of the companies that took care of the Internet traffic exchange between the Comcast and Netflix networks, fell 7 percent on Monday as investors worried that these deals would take away Cogent's business.

Cogent's chief executive Dave Schaeffer played down the effect of the Comcast-Netflix agreement on its business and reaffirmed the company's annual revenue forecast.

"It doesn't mean that revenue goes away from Cogent. It just means that some of the growth in revenue may not occur through us," he said.

Sounds like he is whistling in the dark to me.

battleop

join:2005-09-28
00000

1 recommendation

When you are the dollar general store of transit providers this is what happens.
MrBungle87

join:2013-01-18
Durham, NC

Re: It is dump Cogent Day

Explain.

battleop

join:2005-09-28
00000

1 recommendation

Re: It is dump Cogent Day

They are a cheap carrier that always in a dispute with someone over peering agreements.

dslrsux_

@pppoe.ca
This would have happened with any other transit provider in Cogent's position.
Skippy25

join:2000-09-13
Hazelwood, MO
With a 58+% profit margin you would think they would invest in some bandwidth.

Again, greed trumps all.

battleop

join:2005-09-28
00000

Re: It is dump Cogent Day

"Again, greed trumps all."

Cheap/Fast/Reliable you can only have two.... In their case you can get Cheap and Fast but Reliable isn't an option. You never know when they are going to end up in a peering dispute and someone drops their peer to them.
--
I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast
said by byeCogent :

Cogent

There will always be demand for cheap transport. cogent may even retain quite a bit of Netflix to non signatory or on network caches IF they are now willing to keep the interconnects balanced/adequately equipped.

byeCogent

@comcast.net

Re: It is dump Cogent Day

said by tshirt:

said by byeCogent :

Cogent

There will always be demand for cheap transport. cogent may even retain quite a bit of Netflix to non signatory or on network caches IF they are now willing to keep the interconnects balanced/adequately equipped.

I agree with your assessment, but will they be willing to spend some of that HUGE profit margin(57%) to either charge less or invest heavily in expanding interconnect capacity? I think it will be difficult for them to accept the reality of a new paradigm where the big content companies bypass them in deals with the big ISPs.

Jim Kirk
Premium
join:2005-12-09

Re: It is dump Cogent Day

Pick a name and stick with it, TK.

spewak
R.I.P Dadkins
Premium
join:2001-08-07
Elk Grove, CA
kudos:1
Reviews:
·SureWest Internet

Re: It is dump Cogent Day

said by Jim Kirk:

Pick a name and stick with it, TK.

Dammit Jim, what you are asking for is impossible!
InvalidError

join:2008-02-03
kudos:5

Not any more or less transparent than any peering arrangements.

Do ISPs, transit providers, content delivery networks, etc. disclose the nature, magnitude, rates and other terms of their peering arrangements with all the other networks they interconnect with? For the most part, no.

The direct peering arrangements between Netflix and a handful of major ISPs are no different. They simply cut out a middleman or two. Instead of Netflix paying Cogent and then Cogent paying Comcast to pick up Netflix's traffic in excess of their peering agreement, Netflix now peers with and pays Comcast directly.

No major change, business as usual as far as network-to-network peering negotiations are concerned.

maybe maybe

@mycingular.net

1 recommendation

Re: Not any more or less transparent than any peering arrangements.

People complain when the existing arrangement screws with their experience and then complain when something is done to fix the problem. YAWN. Once all of the Netflix traffic is dumped directly to the large ISPs, maybe peering congestion will be relieved enough to allow better performance for those us who don't use Netflix.

PlusOne

@comcast.net

Re: Not any more or less transparent than any peering arrangements.

said by maybe maybe :

People complain when the existing arrangement screws with their experience and then complain when something is done to fix the problem. YAWN. Once all of the Netflix traffic is dumped directly to the large ISPs, maybe peering congestion will be relieved enough to allow better performance for those us who don't use Netflix.

+1
The only thing that is constant is change.

atcotr

@wideopenwest.com
Most peering agreements are as you describe (gentlemen's with no written contract!) But this is different. Most peering arrangements are without payment and of companies on level network ground. Here we have a large eye ball network butting heads with a over the top distributor who is cheaping out on transit costs. Comcast are being jerks by demanding a troll toll but they are right that Netflix problems due to them buying cheap routing aren't their problem. They definitely think that they should not have to foot the bill for CDN mirror nodes and endless subsidizing of Cogent ports. This is just standard business - each side of a negotiation trying to shift costs into the other party.
Skippy25

join:2000-09-13
Hazelwood, MO

1 recommendation

Re: Not any more or less transparent than any peering arrangements.

Well then maybe Comcast should have a smaller subscriber base so they dont have so much traffic being requested from their network to Netflix.

So maybe it is the greed of Comcast wanting all the customers they can get without maintaining adequate peering points that is the problem.
Mele20
Premium
join:2001-06-05
Hilo, HI
kudos:5
said by InvalidError:

No major change, business as usual as far as network-to-network peering negotiations are concerned

But it is a MAJOR change and a WIN for the consumer. Anything that cuts out Cogent which is the worst of the backbone providers is a big change and a win for consumers.

After Justin moved to liquidweb Cogent became the main carrier for my connection instead of Level 3. I could not reach this site much of the time and when I could it was worse than even slow dialup years ago. Justin had to intervene with Liquidweb and the problem was Cogent. It became much better after that and Cogent disappeared from my PingPlotters to dslreports.com and everything was great...until recently when Cogent became the main carrier again between me and dslr. But the last few days have been fine again and guess what? Cogent is gone again and almost the entire path now is Comcast (have they already purchased TWC)?
--
When governments fear people, there is liberty. When the people fear the government, there is tyranny. Thomas Jefferson
Skippy25

join:2000-09-13
Hazelwood, MO

1 recommendation

Cogent should not have been paying Comcast anything for Comcast customers to get the data they request. If anything, Comcast should have been paying Congent.
InvalidError

join:2008-02-03
kudos:5

Re: Not any more or less transparent than any peering arrangements.

The way peering agreements usually work, peers pay for excess traffic sent.

The reason for this is simple: you have absolutely no control over what traffic you receive (ex.: DDoS and bandwidth multiplication attacks) but you do have control over the traffic that goes out. With a "sender pays" arrangement, each network operator has incentive to contain attacks and any other sort of junk traffic as quickly as possible.

Netflix is paying Cogent to deliver their traffic and Cogent has to do whatever it can within reason to get it done. If their existing agreements with Comcast have already been stretched to the limit, Cogent does end up in a spot where they may have to eat costs or bend over backwards at Comcast's end if they want to resolve a stalemate situation since Comcast has no reason to re-negotiate their peering terms for something more favorable to Cogent for free.

Rinse and repeat for every major ISP.

Keep in mind that Comcast, Verizon and AT&T are also fairly significant transit providers within the USA. They can afford to tell Cogent to go screw themselves if they do not like Cogent's new peering terms.

tmh

@comcastbusiness.net

And so it begins

All the ISPs are lining up for their turn. Netflix, you just gave pillow biter a whole new meaning.
Expand your moderator at work
elray

join:2000-12-16
Santa Monica, CA

Told ya!

This is the natural and responsible solution to the problem that is rather exclusive to Netflix, and is the best interest of the clients. I'm glad Hastings is finally doing away with the childish games and working to improve his product delivery.
jorcmg

join:2002-10-24
USA

Re: Told ya!

Yea Netflix knew it was oversaturating their many ISPs peering agreements. They pretend to not know what is going on but they know full well.

In business sometimes you outgrow your suppliers. If you get big enough you get to play with the big boys. That's when you find out if your CEO is worth his money.

spewak
R.I.P Dadkins
Premium
join:2001-08-07
Elk Grove, CA
kudos:1

Re: Told ya!

So does this mean that Hastings is going to do away with the silly, stupid and meaningless ISP speed reports he annoys the internet with?

mackey
Premium
join:2007-08-20
kudos:12

Re: Told ya!

They are not stupid and meaningless, they are a true view of how someone who's connected through Cogent sees the internet.

/M
Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1
I have doubts this Comcast deal is even that expensive to Netflix. After all even if its a penny per Terabyte, Comcast is still profiting. And they potentially save a shitload of money in calls to the phone support because the first place people will flood if the Netflix is not working is the ISP support line.

And depending on how costly the deal is with Comcast it puts Netflix in better grounds with other ISPs. They can simply state(unless hidden by NDA) "Comcast charges us X dollars for interconnect and have more ISP customers than you by a large margin" After all with how big CC is they overlay many ATT and VZN regions putting Netflix in a position to say "We are willing to spend this, Or you can keep degrading us and let your customers run to Comcast."
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports
Skippy25

join:2000-09-13
Hazelwood, MO
You do realize what just happened was Comcast joined their Open Connect Network, which I believe you spoke out against.

•••••••••

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

1 recommendation

Knowing T

They'll find a creative way to double dip this
take payment from netflix and come up with something like 'premium routing' fee.
--
Despises any post with strings.
raydsltech

join:2004-07-04
Concord, NC

1 recommendation

Hey look at me

I have been in talks with them too, anyone else
wispalord

join:2007-09-20
Farmington, MO

Routing

VPN changes the routing path to net flix just because there is low streams on Netflix with a isp the route in the backhaul could be a\saturated on that particular connection and the vpn will change that path its basic ip routing all isps have stuff like this. Comcast has most likely convinced Comcast to install a caching server on there end to keep the load off the backhauls I ran a wispa and has issues with youtube like this I had 2 t1's with equal bgb traffic so much of my usage from clients was you tube it slowed everyone else down so it was forced on just one t1 leaving the other for everything else anf the t1 with youtube traffic still handeled other traffic as well but doing that boosted qos for my clients who didn't use you tube this is what isp are facing with traffic hogs like Netflix and are just trying to fix it