Like Netflix, Roku Underestimates Per-Byte Broadband Threat

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.

That could account for their confidence. They and ISPs know who they have bought in Congress and expect some favorable laws.

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.

quote:

---

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.

quote:

---

It's possible Hastings was just putting on a show of bubbly optimism for investors...

---

Ya think?!! Oh yea.

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.

I'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.

Yea, when you hit the mega-billions lottery, let us know how it works out for ya.

You 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.

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...

You'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-)

WPA2 + MAC FILTERING is pretty damn effective on keeping people like YOU out.

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.

Since 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.

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.

thats what caps are all about.

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.

Compare the margins on a product like residential HSI to video services and you'll see that you have it backwards.

They 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

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.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.

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.

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.

Option #2: Drive to a video store and rent.

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.

I love the company but... when should we sell netflix stock short.

Somehow I doubt your claim of 50 APs. There are only 3 non-overlapping channels. If you can see 50, there should be enough noise that you wouldn't be able to talk to any of them.

(Note: using someone's network without their knowledge or permission is illegal in a lot of places.)

Why would you want to illegally access another persons router just to drive them over the cap? I do not see what that is accomplishing. As has been mentioned many times in the past, some of the usage levels of today's "bandwidth hogs", are the usage levels of the average customer of the future. People will respond to any per byte billing the same way they deal with any per unit costs in the marketplace. If fuel costs increase too much, you either reduce your fuel consumption rate, reduce other expenditures to pay for the same consumption rate, or seek increased income to pay for the fuel cost increase. You do not go out and siphon the fuel out of your neighbors vehicles. That is stealing.

Let us say that all ISPs went to per byte billing. It would be no different than the old days of paying for a monthly telephone account. You would pay an installation fee for getting service to the premises and you would have to buy the needed network equipment(modem) up front. You would then pay a monthly fee to keep the account active. On to that would be added your per byte fees each month, similar to the old per minute telephone charges. In the old days you watched a clock/wristwatch or used a stopwatch/timer to keep your phone conversation time to an amount you could afford. When the laws changed to bring competition to telephone services, you saw per minute charges not increase as much as in the past and in some cases they stayed flat or decreased. The key thing is to get competition into the marketplace. Your idea to steal your neighbors capacity does not do this.

It would be better for yourself to communicate with your neighbors about the need for changing the laws to facilitate competition. For example extending the line sharing requirements of dialup to DSL, or changing state laws to allow municipalities and counties to easily create fiber to the home public utility networks that can offer open access similar to the line sharing capabilities for dialup. That way you can have multiple ISPs using the same physical infrastructure. That creates a competitive market. Yes, you will face opposition from the existing large ISPs. But cities have worked to
create public utility fiber networks and succeeded in doing so in the face of opposition. Chattanooga TN is one of them. Check out EPB fiber at »epbfi.com. Or look at Wilson NC at »www.greenlightnc.com.

Here 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?

I 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!

There is a huge distinction between the two... People are aware of time; we are not aware of bits. We can look at the clock on the wall, or watch on our wrist to know how much time we've used. Our computers keep a log of modem time. Many ISPs had near real-time accounting of hours. You *know* when you're using it.

Conversely, there's nothing (simple) to look at to tell how many bits you've used. People are completely clueless about how many bits anything uses. Web browsing, email, voip, games, windows updates, you name it. Many people don't realize just how many connected devices they have adding to the problem... game consoles, TVs, DVRs, computers (even when you aren't using them -- if they're on and connected, odds are they're generating some traffic (or a lot))There were no laws that changed anything in the age of dialup. There was no "line sharing" -- that came about with DSL. Anyone with a phone line could call anyone else with a phone line. I could connect to one ISP just as easily as any other -- technically, anywhere in the country if I'm willing to pay for the long-distance call. That is what fueled competition. Anyone could buy phone lines; anyone could be an ISP. (and a lot of people did.)

At the dawn of DSL, that model evaporated. The only people in the right place to sell DSL are the phone companies. They own the COs. They own the copper. They don't pay co-lo fees for their DSLAMs. They don't have to pay for "escorted access" within the CO. And they use your existing phone line instead of an expensive UNE (unbundled network element, aka, dry pair.) In fact, they would refuse to sell you DSL if you didn't already have a phone line.

Only 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.