Like Netflix, Roku Underestimates Per-Byte Broadband Threat Roku CEO has mysterious faith in broadband competition Wednesday Jan 05 2011 19:11 EDT Last month we noted how Netflix CEO Reed Hastings was unconcerned by the looming threat of low broadband usage caps and high per gigabyte overages. We also noted that he probably should be, given that in places like Canada -- Netflix HD streaming eats bandwidth caps like popcorn shrimp. It's possible Hastings was just putting on a show of bubbly optimism for investors, but given some of the new, hugely expensive cap and overage plans we're seeing cooked up, anybody in the Internet video business should pay closer attention. Like Hastings, Roku CEO Anthony Wood also seems to be taking the cap and meter threat rather lightly: quote:
"What we see from a practical point of view in the marketplace is that there's enough competition from cable, telcos and wireless so that in every market there's an unlimited option -- and the price is competitive," he said in an interview last week with Multichannel News. Added Wood, "We don't see a future where consumers will not be able to stream video over the Internet."
It's not really clear what broadband market Wood is looking at, given that most consumers only have the choice of one or two broadband providers. Wireless carriers already employ the kind of caps that make Netflix streaming over 3G or 4G impractical (AT&T's 2GB cap, for example). Meanwhile, terrestrial companies like Frontier Communications that operate in rural uncompetitive markets are experimenting with charging hundreds of dollars in overages for DSL service. In Canada, Bell Canada is imposing caps as low as 25 GB and per gig overages up to $2.50.Both Hastings and Wood have an opportunity here to highlight how the low-cap and high overage pricing model poses a serious threat to consumer freedom and content innovation, but instead they're downplaying the threat to keep investors from getting nervous. Nearly every ISP in the States would love to start charging huge per gig overages if they thought consumers would tolerate it, and if that reality ever comes to pass (always possible in uncompetitive markets) content executives may quickly find themselves wishing they'd spoken up sooner. |
  FFH5
Premium Member
join:2002-03-03
Tavistock NJ |
FFH5
Premium Member
2011-Jan-5 7:13 pm
Maybe they think Congress will modify net neutrality rulesMaybe, just maybe, they think Congress will modify net neutrality rules where PAYING for video deals will be allowed with ISPs. That is, Netflix, Roku, etc may gain the right to pay the ISPs(like Comcast, TWC, etc) to exempt video providers from counting against caps based on putting video servers on the ISPs networks.
That could account for their confidence. They and ISPs know who they have bought in Congress and expect some favorable laws. | |
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Re: Maybe they think Congress will modify net neutrality rulesI would never invest in these companies... its certainly guaranteed that these companies will eventually be SQUASHED by the ISP's implementation of caps. The MSO's will have no choice when too much of their TV revenue erodes away.
Its only a matter of time. | |
| | |  dvd536as Mr. Pink as they come
Premium Member
join:2001-04-27
Phoenix, AZ |
dvd536
Premium Member
2011-Jan-5 9:58 pm
Re: Maybe they think Congress will modify net neutrality rulessaid by ITALIAN926:I would never invest in these companies... its certainly guaranteed that these companies will eventually be SQUASHED by the ISP's implementation of caps. The MSO's will have no choice when too much of their TV revenue erodes away.
Its only a matter of time.
thats what caps are all about. | |
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| PDXPLT
join:2003-12-04
Banks, OR |
to FFH5
quote:
It's possible Hastings was just putting on a show of bubbly optimism for investors...
Ya think?!! Oh yea. | |
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JasonOD to FFH5
Anon
2011-Jan-5 7:46 pm
to FFH5
said by FFH5:Maybe, just maybe, they think Congress will modify net neutrality rules where PAYING for video deals will be allowed with ISPs......
Too soon for that just yet. Let the relationships between content owners and distribution services mature and crown some winners, while the ISP's transition their business plans to accommodate the video demands. At that point, let netflix, MSoft, google, et al, do the begging in Congress for rule changes while buddying up to the ISP's with cash. | |
| | | FFH5
Premium Member
join:2002-03-03
Tavistock NJ |
FFH5
Premium Member
2011-Jan-6 9:00 am
Re: Maybe they think Congress will modify net neutrality rulessaid by JasonOD :said by FFH5:Maybe, just maybe, they think Congress will modify net neutrality rules where PAYING for video deals will be allowed with ISPs......
Too soon for that just yet. Let the relationships between content owners and distribution services mature and crown some winners, while the ISP's transition their business plans to accommodate the video demands. At that point, let netflix, MSoft, google, et al, do the begging in Congress for rule changes while buddying up to the ISP's with cash. The wait for a law to be introduced not very long: » 'Internet Freedom Act' Tries To Stop FCC Neutrality Rules [56] comments | |
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Ncrdrg to FFH5
Anon
2011-Jan-5 9:07 pm
to FFH5
He should be concerned. I'm watching TV show from my computer as well as Anime and manga.
And good lord, it's eating up all my cap and I sometimes break it. I live in Canada so I really hate this. I've only got 125GB but it goes up to 150GB in February (Vidéotron).
Gonna be hard on me. Very hard because I'm invalid for work since the last 5 months. Telling me NOT to download stuff is like asking me to twiddle around doing nothing in my apartment. If it exports in the U.S., the lack of competition will really hurt. | |
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to FFH5
what rules are they going to modify? there are none. the ones that the FCC "created" are un-enforcable. The FCC has over stepped his power and will be smacked by the courts for this. Congress will have to actually create the rules and or give the power to the FCC to create such rules for the Internet.
and NF is free to pay co-lo fees to any ISP to by pass the caps and the actual Internet issues. They just don't. | |
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to FFH5
said by FFH5:Maybe, just maybe, they think Congress will modify net neutrality rules where PAYING for video deals will be allowed with ISPs. That is, Netflix, Roku, etc may gain the right to pay the ISPs(like Comcast, TWC, etc) to exempt video providers from counting against caps based on putting video servers on the ISPs networks. Or even better, Netflix should be trying to stiff-arm the content providers to allow off-peak caching of movies. Of course there are those who don't want to wait, but if metered billing does come, it would be in everyone's best interest to move as much traffic to off peak and reward the customers for doing so. | |
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to FFH5
all these asshole greedy cable companies should be forced to split up into two companies.
one for cable tv
one for the ISP stuff. | |
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to FFH5
Oh, you mean so they can create those series of tubes so the big well established companies wont have to worry about small upstarts or innovative companies from coming in and "stealing" from them?
Your proposal is the exact reason the entire NN debate started. It was stupid then, it is stupid now, and no matter how many times morons repeat it, it will still be stupid in the future. | |
| | | FFH5
Premium Member
join:2002-03-03
Tavistock NJ |
FFH5
Premium Member
2011-Jan-6 10:55 am
Re: Maybe they think Congress will modify net neutrality rulessaid by Skippy25:Oh, you mean so they can create those series of tubes so the big well established companies wont have to worry about small upstarts or innovative companies from coming in and "stealing" from them?
Your proposal is the exact reason the entire NN debate started. It was stupid then, it is stupid now, and no matter how many times morons repeat it, it will still be stupid in the future.
My proposal? It wasn't MY PROPOSAL. But I see you fall into the category of those who make personal attacks and throw epithets around when lacking a cogent argument. | |
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Re: Maybe they think Congress will modify net neutrality rulesI wasn't attacking anyone, I attacked the idea posted. And "your proposal" simply was what you typed/repeated/posted. Now whether or not you were offended because you subconsciously fall under the "moron", is on you.
As far as lacking a cogent argument, did you not read what I wrote and you quoted? I am pretty sure my very first sentence was a complete cogent argument. | |
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to FFH5
You make a very good point and are most likely true. | |
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 knightmbEverybody Lies
join:2003-12-01
Franklin, TN |
Unlimited is the easiest modelquote:
Nearly every ISP in the States would love to start charging huge per gig overages if they thought consumers would tolerate it
I hope they do come up with those insane billing models. It just means more customers for me. I'm in the only ISP now that has the 100,000,000,000 GB / Month cap (we actually just leave it unlimited for customers, but it's good to know what you limits are). It's too bad we don't have mega $$$ to put the heat on more ISP around the country.  | |
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JasonOD
Anon
2011-Jan-5 7:59 pm
Re: Unlimited is the easiest modelYou do realize that all ISP's network administrators jobs would be so much easier if netflix (for example) would go away. ISP's need to have viable business models to continue to expand or even continue, and video demand is threatening that. Especially since it directly threatens channelized video (CATV) services that often help subsidize IP services. The unlimited model really no longer work with the unprecedented onslaught of IP video demand.
I think SD video growth under mostly unlimited models probably would have been manageable, but with everyone (netflix, xbox market, apple, even youtube) now serving up HD vids at quadruple the bandwidth, the camels back has been broken several times over. | |
| | | jjeffeoryjjeffeory
join:2002-12-04
Bloomington, IN |
Re: Unlimited is the easiest modelYou'll see the camel's back being broken when US ISPs start going to this model. There will be some really pissed off former customers! The the network admins will not need to worry any more. 8-) | |
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to JasonOD
You do realize your argument is a complete misrepresentation of reality, right? HD video streaming is not crippling networks or overloading backbones. Overall internet bandwidth growth has been steady or in slight decline at around 30% per year, with Moore's Law keeping up with growth consistently for the last 10 years. The vast majority of growth has been in developing countries where millions of new users are coming online.
Bandwidth is incredibly cheap for these companies, like 3-4 cents/GB. For giants like Comcast, Verizon, and AT&T, peering agreements and ownership of the middle mile make bandwidth virtually free for them. | |
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2 recommendations |
Re: Unlimited is the easiest modelsaid by sonicmerlin:You do realize your argument is a complete misrepresentation of reality, right? HD video streaming is not crippling networks or overloading backbones. Overall internet bandwidth growth has been steady or in slight decline at around 30% per year, with Moore's Law keeping up with growth consistently for the last 10 years. The vast majority of growth has been in developing countries where millions of new users are coming online. What do you mean when you say bandwidth growth? If you are talking about bandwidth consumption, I'd like to know your sources because they should don't match up with what I'm seeing (and most of the other ISP I have corresponded with on these forums are seeing the same thing as me). In the past year, my bandwidth consumption has skyrocked. And I know that Netflix is the main culprit because one of our more commonly asked questions in the past few months has been "I have a Wii/PS3/Xbox and I want to know how to hook it up so I can watch netflix". SD video IS putting many last mile and ISP backbones at capacity (no, the major internet backbones are still fine and that's not what I'm referring to). HD video is beginning rapidly eat away at whatever capacity is left, and once enough stupid netflix people fire up their HD streams during the peak times at night, many ISP's will turn into the parking lots you see during rush hour in the city. said by sonicmerlin:Bandwidth is incredibly cheap for these companies, like 3-4 cents/GB. For giants like Comcast, Verizon, and AT&T, peering agreements and ownership of the middle mile make bandwidth virtually free for them. I'm getting increasingly annoyed at people who make ignorant comments about how it only costs ISP's a few pennies per gig.... Yes, maybe the raw bandwidth, but raw bandwidth in a datacenter is one of the smallest costs for an ISP, it is many times that once you factor in the rest of the costs such as getting that bandwidth throughout their network, to the customer's home, labor, upgrading equipment, offices, insurance, etc. Is $1/gig a fair price for a large ISP in the city to charge? No, probably not considering that they can probably still make enough money at 25 cents/gig to be plenty profitable. But for those who live in an extremely rural area, $2.50/gig or more might be reasonable considering how much more it costs to deliver services and upgrade networks in those area. | |
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Re: Unlimited is the easiest modelYou do realize that bandwidth on a network will always work itself out right?
IF, your network can't handle the amount of traffic going across it, then you have 3 options and these options were true 20 years ago and they will be true 20 years from now.
1.) Invest in your network and increase capacity.
2.) Reduce the load on your network by raising your rates to a point that supply and demand work themselves out (marketing 101).
3.) Do nothing and over time people will become dissatisfied with your network and leave thus freeing up bandwidth for those that stay. | |
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Re: Unlimited is the easiest modelsaid by Skippy25:You do realize that bandwidth on a network will always work itself out right?
IF, your network can't handle the amount of traffic going across it, then you have 3 options and these options were true 20 years ago and they will be true 20 years from now.
1.) Invest in your network and increase capacity.
2.) Reduce the load on your network by raising your rates to a point that supply and demand work themselves out (marketing 101).
3.) Do nothing and over time people will become dissatisfied with your network and leave thus freeing up bandwidth for those that stay.
Yes, those are all options to solve the problem. #3 is not the ideal solution for anyone in the long run. #1 is the best, but to sustain the growth, that investment is very costly. That's where #2 comes in, but rather than raising flat rates, why not make those who use more pay more. That causes the bandwidth hogs to reduce their consumption (freeing up bandwidth for others) or pay more (providing the money to invest in to upgrading the network). | |
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Re: Unlimited is the easiest modelTrue. However, there is one major problem with your proposal which has been discussed here multiple times.
By going to a per byte billing system to make those that use more pay more you are removing any incentive to invest and innovate once market saturation has been complete. Being that a vast majority of all markets are either monopoly or duopoly there is no incentive to invest in a network when you can continue to nickel and dime consumers with the current infrastructure. Why pay to upgrade bandwidth when you can control bandwidth and services by simply increasing the cost to your consumers for using such? Speaking of services, why should ISP's be in a position to make or break services that they don't provide themselves (skype, steam, youtube, IPTV)?
ISP's are very profitable with an unlimited model now. These same ISP's under this model have been able to expand and invest in their networks with the profits they make under the current unlimited model and consumer use has sky rocketed under this model over the last 2 decades. How is it that now all of a sudden they can't sustain this infrastructure under the current model?
Lastly, no matter how you try to dress up a pig, it is still a pig. If they want per byte billing then it should be done across the board. It should be treated like a utility. Have a connection fee and then usage on top of that. So then those that truly don't use much truly wont pay much and those that do will. That last sentence is really the rub, as that is not really what they want because that will decrease their profits overall because they openly admit that "abusers" are a very small % of their users. Setting it up so the vast majority still pays the same would have a ridiculous per byte price, connection fee or a combination of the both. | |
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Re: Unlimited is the easiest modelsaid by Skippy25:Why pay to upgrade bandwidth when you can control bandwidth and services by simply increasing the cost to your consumers for using such? Supply and demand... For virtually ever other product, as the demand goes up, so does the price. If people will pay it, who's to say they can't charge it? Does it really matter how much it costs the ISP? That's business. Do I like it when the prices increase for a product because the demand for it went up? No, but that doesn't mean that it isn't their right to charge what people will pay for it. If people decide it is too much, they will either start to cancel (at which point the demand goes down and so do prices) or a competitor will step in and offer a lower priced service. said by Skippy25:Speaking of services, why should ISP's be in a position to make or break services that they don't provide themselves (skype, steam, youtube, IPTV)? It's not really the ISP's responsibility to make sure that streaming video businesses succeed. They are in business to make money. If they can make more money by not supporting the services that cost the most to provide, then I don't see how it is anyone's right to tell them it is breaking any laws. Again, if not supporting certain services cause people to cancel or switch services, it will force the ISP's to do something to lure them back in. said by Skippy25:ISP's are very profitable with an unlimited model now. These same ISP's under this model have been able to expand and invest in their networks with the profits they make under the current unlimited model and consumer use has sky rocketed under this model over the last 2 decades. How is it that now all of a sudden they can't sustain this infrastructure under the current model? Yes, customer count has soared. But until recently when video streaming has started becoming mainstream, there weren't really any applications that has caused the consumption to soar like it is starting to do. Yes, the "unlimited" model has been successful so far, but it has NEVER truly been unlimited. It is just that enough people were staying under the artificial limit. A few year ago, and ISP could offer a 1 meg connection or a 10 meg connection, and they consumption between the two was marginal. Now that there are services that utilize that 10 meg connection, ISPs are realizing they made a mistake by playing the speed game, and are starting to do something about it. The tables haven't turned quite yet.... But they are rapidly approaching, which is why we are starting to see things like caps or usage based billing cropping up. said by Skippy25:If they want per byte billing then it should be done across the board. It should be treated like a utility. Have a connection fee and then usage on top of that. So then those that truly don't use much truly wont pay much and those that do will. I agree, a flat rate plus usage (whether it is by the gig or increments of blocks of gigs) is really the best way to treat this. said by Skippy25:That last sentence is really the rub, as that is not really what they want because that will decrease their profits overall because they openly admit that "abusers" are a very small % of their users. Setting it up so the vast majority still pays the same would have a ridiculous per byte price, connection fee or a combination of the both. In the past, the "abusers" have been a very small %, but now more and more average consumers are begging to creep into similar consumption as the abusers have been in, and that is putting more and more accounts over the artificial limit that many ISP's want to see. If usage based billing is implemented the right way, the vast majority of people's bill's won't change. The lowest users might see a slight drop, but the heavy users will see increases. And no, a low usage user isn't going to drop from $50/mo to $10/mo... but I don't doubt that we'll see the lowest usage customers dropping a few bucks, or it may even stay the same. Obviously it will vary from ISP to ISP depending on how it is implemented. Different ISP's using different technologies in different geographic locations have different costs associated with providing service, so we'll see a handful of prices just as we do with flat rate pricing now. | |
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Re: Unlimited is the easiest modelI think you missed a few points in my post. Your supply/demand and service response don't really relate to what I said.
My point was that they have no incentive to invest in their network, actually they have a disincentive to invest, with per byte billing as they restrict their subscribers use and only additional subscribers would require more investment. However, being that most markets are saturated already (low % of new subs) the numbers added are minimal amongst the monopoly/duopoly ISPs.
I never said ISPs were responsible for any business and there is practically no competition in a vast majority of the markets so your suggestion that they will police themselves through competition is pure BS. What I did say, is that they should not be in a position to determine ones success or failure because of the unnecessary restrictions they put on their users. Should the top 5 ISPs that cover a vast majority of all internet users in the US be able to block Skype/Steam/Netflix/Google because they won't enter an agreement with them and pay them to reach the ISP's users that want the services? Should those same ISPs be able to artificially block them by pricing the per byte cost at a point that it makes no economic sense to obtain those services for a vast majority of the population? This doesnt even factor in when an ISP sets up a competing service to anything else on the web and then does not have that count against your caps or billed per byte. That is until the competition is no more, then it will. Innovative services like Steam and Netflix probably would have never even came about if per byte billing was in place.
Your entire argument on speed and unlimited is silly. Especially the last sentence. We are seeing things like caps and usage based billing because these companies are constantly trying to increase profits. We are not seeing this because of the boogeyman bandwidth hogs as you claim. Your claim of unlimited and whether or not it was ever actually unlimited is pure speculation on your part as is the "artificial limit" you speak of.
Your closing statement sums up the entire problem: Today's average user was last years "abuser". So under per byte billing the average user today would be paying the same premium price the abuser paid last year to "abuse" the network. However, now the average user still gets to only enjoy the average internet. | |
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Re: Unlimited is the easiest modelsaid by Skippy25:Your entire argument on speed and unlimited is silly. Especially the last sentence. We are seeing things like caps and usage based billing because these companies are constantly trying to increase profits. We are not seeing this because of the boogeyman bandwidth hogs as you claim. I can't force you to believe anything... All I can tell you is the truth as reported by the consumption of customers on the network that I operate. My numbers match those of virtually ever other ISP I have corresponded with. Those numbers tell me that the average bandwidth per customer is increasing far faster than the cost to provide services is declining. And it appears we are just at the tip of the iceberg. As my network reaches it's current capacity, I am faced with decisions. 1) I can just add more capacity, but that is expensive and really hard to do when the profit margins are going down and I am left with less capital to invest and I will eventually have to cut jobs, run myself out of business, or both. 2) I can just do nothing and let the network go to hell. Eventually customers will leave and I might be back under capacity, but the damaged reputation for my company may have already sealed my fate and I will end up out of business anyway. 3) I can raise rates across the board, giving myself the needed capital, but at the expense of my low-usage customers. 4) I can charge more for the high usage customers, giving myself the needed capital (if they choose to use more) or giving them incentives to conserve bandwidth. | |
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Re: Unlimited is the easiest modelAgreed as I believe I posted those options earlier.
However, you will also need to agree that if you have a 10gbps network and it goes completely unused then cost to you is not much less then if you have 1 or 1000 people using it at 99% capacity all the time. That incremental cost would be in electricity and cooling. But has nothing to do with the bytes you would want to charge individually for.
Networks will always work themselves out unless you are extremely under capacity for your user base. If that is the case, then that is your fault and you either need to invest or get out of the business because you are not able or willing to do what it takes to run that network sufficiently. No user or group of users will take over a well managed and well ran network as it will always pass the packets as fast as they receive them and the capacity of switches and routers far exceed the capacity of any network you have. | |
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Re: Unlimited is the easiest modelsaid by Skippy25:No user or group of users will take over a well managed and well ran network as it will always pass the packets as fast as they receive them and the capacity of switches and routers far exceed the capacity of any network you have.
I agree for the most part. The one problem I have with your statement about it costing less when the network it near capacity is that every ISP oversells their network. The cost to deploy a system capable of delivering every customer 10 megabits (for example) far exceeds the price that people are willing to pay for that dedicated connection, much like most other utilities. The cost to build a phone network capable of every customer making a simultaneous call would be another example. It is quite common for ISP's to have a contention ratio of between 10:1 and 25:1, sometimes more, sometimes less, but for the most part it is somewhere between those two. Therefore ISP's bank of the fact that only so many people are going to be using their connection at any given time. Unfortunately they typically have to build the capacity for that based on peak hours, which means that 75% of the time there is a lot of wasted capacity. But historically speaking, even at peak times (which on my network typically fall between 6pm and midnight) there are still maybe only 25 percent of the customers using their connection because that is the same time most people are turning on the TV for their prime time shows. Even with 25%, most people had been browsing, so a little burst of traffic and then nothing while they read the page. Now with streaming video sites, many people are replacing their "TV time" with streaming, which not only raises the number of simultaneous users, it also raises it with the most bandwidth intensive mainstream application they could possibly use. If over the next year we go up to 50% of the people using their connection during peak hours, and they are using more bandwidth than before, we now have to more than double our capacity, although we aren't getting paid any more than before to do it. This simply means that people ISP's will charge more to cover those costs, will customers will have to reduce their consumption. It is silly to expect that paying $50 for 10 megs means you have an unlimited connection, but most people don't understand the economics of the internet business, and a lot just simply have an entitlement attitude and feel it is their right to it. It really just comes down to financial numbers than it does about having a well managed network. Obviously technology advances and the cost per meg for capacity goes down over time, but the costs to install the hardware and maintain it are still significant. Regardless of what the future brings, ISP's will continue to do what they need to so that they maintain their profit margins. | |
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ClueBy4 to JasonOD
Anon
2011-Jan-5 11:29 pm
to JasonOD
said by JasonOD :Especially since it directly threatens channelized video (CATV) services that often help subsidize IP services. Compare the margins on a product like residential HSI to video services and you'll see that you have it backwards. | |
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Re: Unlimited is the easiest modelsaid by ClueBy4 :said by JasonOD :Especially since it directly threatens channelized video (CATV) services that often help subsidize IP services. Compare the margins on a product like residential HSI to video services and you'll see that you have it backwards. No, not really, because the TV or phone service are what typically paid for the majority of the last mile network to be built... CATV is what paid for the coax to be installed, phone is what paid for the copper to be installed, etc.. Once you realize that these services paid for one of the largest costs of starting an ISP, and continue to cover much of the cost of upgrading the infrastructure, yes, these services do subsidize HSI. | |
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| | cramer
Premium Member
join:2007-04-10
Raleigh, NC Westell 6100
Cisco PIX 501
1 recommendation |
to JasonOD
Netflix is today's satan. You sound like so many of the chicken littles who have proclaimed every new thing is going to "kill the internet"... that song has been sung about youtube, the itunes store, steam, WoW and all other online gaming, etc, etc, etc. (even email and the web itself, too, if you want to go back that far.)
IP services are actually immensely profitable -- without all this cap and overage fee bullshit. Operational costs have been going down for many years. Bandwidth costs have been going down as well. As it stands, there are only two reasons to move away from flat rate services: a) To gouge the customers thus making a profitable enterprise even more ridiculously profitable, and b) as a means to prop up one's failing video business. | |
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Re: Unlimited is the easiest modelSo, do salaries get cheaper?? Does a truck run and gasoline get cheaper?? There are other costs that just the bandwidth last time I checked. | |
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to cramer
said by cramer:Netflix is today's satan. You sound like so many of the chicken littles who have proclaimed every new thing is going to "kill the internet"... that song has been sung about youtube, the itunes store, steam, WoW and all other online gaming, etc, etc, etc. (even email and the web itself, too, if you want to go back that far.) I don't remember any of those causing the claims that the internet will die. Just because you might have read a post here doesn't mean the ISP's were worried about it. YouTube, yes that caused some but that was the beginning of this bigger picture, it's all about video streaming, which is many magnitudes more bandwidth intensive that downloading an MP3 ever was... said by cramer:IP services are actually immensely profitable -- without all this cap and overage fee bullshit. Operational costs have been going down for many years. Bandwidth costs have been going down as well. As it stands, there are only two reasons to move away from flat rate services: a) To gouge the customers thus making a profitable enterprise even more ridiculously profitable, and b) as a means to prop up one's failing video business. So how does your ISP do it? The ISP you manage, that is. I see people make claims all the time about how ISP's are evil because they actually make some money, but there are plenty of businesses who's margins are may times that of an ISP's and people are crying about it. It is obvious that you don't know how much it costs to support the levels of bandwidth that are required today, and over the next couple years. Many rural ISP's are already having problem with Netflix, and Netflix is just beginning to become popular. I wouldn't doubt that the number of customers streaming videos this year more than doubles. Many networks simply can't sustain that much traffic growth. | |
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|  NOCManMadMacHatter
Premium Member
join:2004-09-30
Colorado Springs, CO |
NOCMan
Premium Member
2011-Jan-5 7:48 pm
If I had the moneyI'd gladly build a broadband network from the ground up and charge for unlimited access, the price differentiator would just be charges on how fast you wanted to go. No tv bs or anything like that. I would ensure direct peering with Apple, Netflix, Google to ensure the fastest access to the most popular services. I would setup hotels for smaller companies to bring their presence onto the network and cut out the middle man on carriage costs etc.
Hell I'd run it as a non profit and drive all revenues into expanding the network nationwide. | |
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Re: If I had the moneyYea, when you hit the mega-billions lottery, let us know how it works out for ya. | |
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It's a shame...If people knew how easy it is to get into most peoples routers they would then know how easy it would be to war drive and kill one persons cap after another. Customer gets sky high bill and drops said company. Company loses clients left and right.
When the people who really know how to do things get sick of this it's gonna get real, real ugly. I have a Nanostation on my roof from previous Wifi service and right now I can access well over 50 routers - all on Charter's network and all under caps. If I wanted I could obliterate all of them until there's no one left on my node but me.
If thats not easy enough one could just flood people's IP's until they went over the limit with nothing but their IP address.
When the hackers get sick of this there's gonna be an ugly battle. It's already brewing... | |
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••••••••••• |  MoracCat god
join:2001-08-30
Riverside, NJ |
Morac
Member
2011-Jan-5 9:11 pm
Especially when movies are 12 GB in sizeSince Vudu was added to the PS3 and they gave me one free movie, I decided to watch Inception (good movie BTW) in HDX format. My router reports that the movie was 12 GB in size. I watched it twice. That's 24 GB in a few hours.
Fortunately (or not) I'm on Comcast so the cap is 250 GB and I don't do this every day, but the cap would definitely affect me if I watched a lot of HD(X) movies. I would hate to have a 30 GB (or a 3 GB) cap since I regularly average about 30 to 40 GB per month.
Netflix's video streams are a much lower bandwidth though than Vudu's HDX stream. I watched 2 Netflix videos as well as downloaded a few PS3 demos and that only added an extra 9 GB.
On a side note, my router is telling me I've used 33 GB of data this month (up & down), while Comcast's own usage meter says I've only used 30 GB. While not the same, that's a lot more accurate than the meter used to be. | |
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hehThey once said it wasn't a concern.. But it should be.. No one in their right mind would pay $10 a gig for overages and watch videos with that.. I'd rather pay .44 cents and mail the damn dvd than to pay that to watch it now... My god | |
|  ARGONAUTHave a nice day.
Premium Member
join:2006-01-24
New Albany, IN |
ARGONAUT
Premium Member
2011-Jan-6 12:24 am
Mongo only pawn... in game of life.Option #2: Drive to a video store and rent. | |
| | 88615298 (banned)
join:2004-07-28
West Tenness |
88615298 (banned)
Member
2011-Jan-6 11:24 am
Re: Mongo only pawn... in game of life.said by ARGONAUT:Option #2: Drive to a video store and rent.
Too bad they shut down the Movie Gallery in my town over 6 months ago. | |
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banner
Premium Member
join:2003-11-07
Long Beach, CA |
banner
Premium Member
2011-Jan-6 12:26 am
I agreeI love the company but... when should we sell netflix stock short. | |
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truthtime
Anon
2011-Jan-6 2:29 am
wellHere is what i did.
Begged borrowed or whatever got about 3 tb of hard drives While i can have capacity and filled them up full of xvids
while they filling up i recode these xvids to x264 avc aac at 512kilobit ( ironic that its the same tech that rips the blurays that will do this for you MUHAHA ), yes you lose a lil quality, but ya want truth
the size drops 40% -60%
with avg right in half.
THAT means my 3TB = 6TB
a season of tv per dvdr.....
now you do it , ill do it and a few million others.
We can end run caps buy all meeting up at cafes. and if hollywood tries to bother us a few will be authorized with the name 'robert polson'
The market for HD equipment goes POOF to zero and we can keep buying old used stuff form ....other countries , yes that is harpers plan we'll be like the food bank of the internet
Say good buy to good sales of anything online in canada.
25GB cap equates to 7.4kilobytes/sec - unlimited
What is cost?
NOW what is unlimited 5K dialup cost?, 10Kdialup?
I remember downloading full cdrs at dialup speed guys, this just means were gonna being doing it non stop at 7.4 KB/sec. MILLIONS of us at same time. GO ELECTRICITY BILLS that now cost 8% more thanks to HST....DOES BELL realize that yet? | |
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Merin
Anon
2011-Jan-6 3:00 am
Shaw/rogers/bell model is anti competitive at bestI love how Canadian ISPs can blatantly lower caps and charge such outrageous prices per gig. IE shaw/rogers » Caps reduced to offer you more value! | |
| elray
join:2000-12-16
Santa Monica, CA |
elray
Member
2011-Jan-6 3:55 am
They Get ItOnly the Chicken Littles of DSLR don't.
You don't see Apple, Google, Amazon, Blockbuster or ESPN quaking in their boots either.
Bandwidth will be available, and it will be relatively cheap - just not free. Netflix will have to give the ISP a cut, and their rates will reflect it. | |
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•••• |  TMMerlinThe Devil made me do it
join:2003-06-19
Oxford, MI |
What broadband threat are they talking about ?AT&T U-verse has no CAPS on DSL ! I stream Netflix everyday and have not had a single price overage. As a matter of fact, usage caps are not even in my service !
Wireless broadband is extremely expensive and we all know cell carriers always charge you mucho bucks to see stuff on that measly 4" screen on your cellphone. What are you watching TV on a 4" screen in the first place ? | |
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Re: What broadband threat are they talking about ?you have a 4 inch screen? I'm jealous mine is only 2.... | |
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chuckcar
Anon
2011-Jan-6 12:05 pm
Maybe they think Congress will modify net neutrality rulesSoSomething like "farewell and adieu" will be the last phrase we hear from Netflix after they pull out of Canada for good in 6 months time. Netflix did no research and at least they'll learn something. | |
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anon3
Anon
2011-Jan-7 3:42 pm
Threat of per byte billingIs only a threat because ISPs want their cake and to eat it too. Complaining about not enough capacity, not upgrading their network even tho they have the means to do so. They can complain about Netflix or other bandwidth heavy apps, but don't do anything about it, it doesn't make any sense. Don't they want people to use the service that they are paying a lot of money for? Don't they want to upgrade constantly to give their users the best internet experience? Why even throttle/degrade/downgrade service at all? It would almost be better to make ISPs a regulated utility so they can't start charging more for the same service we have been paying for all along.  | |
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Re: Threat of per byte billingISPs want meh money too much.
I use 400 gigs per month on Comcast, they never do crap. Which is good, Comcast is aight. They have enough money, they should invest in better stuff. I just want FCC to regulate it all so we actually get good interwebsz. | |
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