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Netflix Confirms Deal For Access To Verizon's Network 135

Posted by timothy
from the you-scratcha-my-back dept.
An anonymous reader writes "Netflix [on Monday] confirmed that it has reached a deal to gain itself access to Verizon's network. This deal is similar to the one that Netflix already made with Comcast and should improve streaming video quality for Verizon customers. Readers should note that Netflix is paying Verizon and Comcast only to gain access to its networks by by-passing third-party transit providers like Cogent and Level 3. If the FCC's new proposal passes, ISPs like Verizon and Comcast could also charge Netflix for faster direct connections to its customers over the last mile."
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Netflix Confirms Deal For Access To Verizon's Network

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  • Now is the time if you care to have everyone you know stand-up for *decreased* regulation in the last mile and locally, not more. The cost of building high speed access to your location is not in the long-haul but the local access network. Long-haul costs are at their lowest point ever, but getting to the major locations is always the expensive part. Labor costs, including engineering and permits make the cost of installing fiber or other technology insignificant.

  • Triple dipping? (Score:5, Insightful)

    by Dancindan84 (1056246) on Tuesday April 29, 2014 @09:00AM (#46867025)
    If the FCC's new proposal passes, ISPs like Verizon and Comcast could also charge Netflix for faster direct connections to its customers over the last mile."

    So the ISPs would be able to charge their customers for access (which is often tiered), companies like Netflix for access and then companies like Netflix AGAIN for faster access. The go to excuse that they use is that they're infrastructure can't support giving everyone everything, but they took billions from the government to build out infrastructure and then never did it. Oh, I guess that makes it quadruple dipping?
    • Gah!
      s/they're/their
      • What's really sad about that mistake is that you only made it the once. The first time you used "their", you did it correctly.

    • by Anonymous Coward

      If the FCC's new proposal passes, ISPs like Verizon and Comcast could also charge Netflix for faster direct connections to its customers over the last mile."

      So the ISPs would be able to charge their customers for access (which is often tiered), companies like Netflix for access and then companies like Netflix AGAIN for faster access. The go to excuse that they use is that they're infrastructure can't support giving everyone everything, but they took billions from the government to build out infrastructure and then never did it. Oh, I guess that makes it quadruple dipping?

      Well, yeah.

      Governments gave those cable companies the monopolies in the first place. Now those governments work with the cable companies to the benefit of both.

      It's called fascism.

      Nice, ain't it?

      I have a great idea! Let's give that government MORE tax revenue to use against us! And while we're at it, let's turn over an entire1/6 of the country's economy to that government by putting it in charge of health care.

      The more we put government in charge of , the more we ask the government to "solve our problems

      • by vux984 (928602)

        Governments gave those cable companies the monopolies in the first place. Now those governments work with the cable companies to the benefit of both.

        It's called fascism.

        In what universe is that "fascism"?
        It's just plain old corruption and greed.

      • by geekoid (135745)

        "It's called fascism."
        You sound like an idiot.
        http://en.wikipedia.org/wiki/F... [wikipedia.org]

    • You have no idea what you're talking about. I get tired of having to correct people on this subject.

      The cost to support your internet connection is directly related to the population density in the area you live in. Live in NYC? It's a lot cheaper to provide you service. Live in Rural Montana? The federal government just subsidized many telcos to provide internet to customers like this and it averaged $350,000 PER PERSON to get them internet. No, I'm not kidding either.

      We live in a rich country where people

      • Older article, but talks about how ISPs are making huge margins while actually reducing their capital investments:
        http://arstechnica.com/tech-po... [arstechnica.com]

        Two more recent articles looking at the margins ISPs make:
        http://techcrunch.com/2011/07/... [techcrunch.com]
        http://gigaom.com/2011/05/12/n... [gigaom.com]

        True revenue and profit reports aren't easy to get ahold of for the big ISPs. Yes, I'm sure the profits are higher in higher density areas. No, I never made any comparisons to prices paid in North America vs. Europe and Asia. The
        • by JWW (79176)

          The margins that the big ISPs operate at are obscene.

          The "EVIL" oil companies make billions on tiny margins, around 8%.

          The are article quotes nearly 40% margins for the big ISPs. This is a sign of a monopoly market, of collusion, of protective government regulation, basically is a sign that the big ISPs are really really fucking evil.

          It a true market a 40% margin would not stand.

          The FCC needs to either work for the citizens of this country and make the internet common carrier, or they might as well disband

          • But if they disbanded they wouldn't be able to keep serving their true constituency so ably.

          • by geekoid (135745)

            Who re you to determine what obscene profits are? Lets see, it costs me 5k a year to work, I make 100K a year so my profit on that must piss you off. I mean, obscene, right?

            OR, maybe there are other things going on.

        • Again, you have NO IDEA what you are talking about. Every single ISP on that list is a cable company. Who are almost completely unregulated. They briefly mention AT&T and Verizon but have no data. I can't speak for the cable industry, I'm sure there are very good reasons for what their rates are set to or they'd be destroying telcos even faster than they already are.

          I've worked for 3 major Telcos in my life including AT&T, they all lose money on DSL. Where they make their money is in services... IP

          • Oh wait, that's right, you keep going on and on about their monopoly.

            Seriously? I never once mentioned monopoly. None of the 3 articles I linked mentioned monopoly once. So... never constitutes going on and on. Idiot.
      • by Arker (91948)
        "You have no idea what you're talking about. I get tired of having to correct people on this subject."

        You should quit 'correcting' people because you are wrong.

        The vast majority of your post is simply distraction - some of what you say is true but it's not relevant.

        "Netflix was completely irresponsible in the way they designed and maintained their service. They were approached by every major ISP in the country with plans to help alleviate the problems they were causing in the ISPs last mile."

        And there is th
      • by Meeni (1815694)

        It's Europe, not Africa.

      • Okay, point granted on rural access, but I think you miss the important part. WE pay for access. WE have a contract for speed delivered. ISPs make deals or charge for access and interconections: the value of their bussiness is the bandwidth.

        I dont give a flying fuck if Mary McBrotherFuck up in the Kentucky mountains cant see House of Cards because she doesnt have the bandwidth: if she wants more bandwidth so much, then she should pay for it or move to civilization. I pay for bandwidth, netflix pays for band

    • Their infrastructure probably can't support what they're selling. In recent months my FiOS connection has become a mess. The Speakeasy speed test suggests I'm still getting the peak download speed I paid for, but I have suspicion these data are being cached and that's why it looks fast. General browsing has become very laggy. e.g. Google maps is very frustrating to use. Traceroute sees a lot of time outs to maps.google.com I haven't bothered contacting them because I'm moving in a month. When I cancel my se
      • by geekoid (135745)

        Yeah, just cancel, don't ask them about it and have them come out and do tests. Maybe you ahve a wiring issue? maybe you need to run spyhunter? IF you ahve wi-fi maybe someone is on it.
        Shit, could be squirels

        • Based on past experiences with companies like this, they're crap at finding the source of a problem. I've wasted hours on the phone in the past and nothing was ever fixed. I'm leaving the country in 6 weeks and I'm busy. I don't need this fixed and I don't have time to spend hours on hold at Verizon to have them tell me to re-boot my router.
  • by Mr D from 63 (3395377) on Tuesday April 29, 2014 @09:01AM (#46867029)
    As a customer, where is my rate cut?

    Monopolies aside, a great problem with the proposed changes is that ISPs can charge whatever they want for connection fees and don't have to disclose. That allows them to shut out anyone they desire. Way too much power.

    Sadly, a customer class action suit might be the only chance for Net Neutrality.
    • by Anonymous Coward

      As a customer of Verizon FiOS, I'm happy that something is happening. Netflix delivery has been horrible for the last few months. My choices are either Comcast or Verizon and Verizon doesn't give me any gruff over my usage pattern like Comcast did.

      While I hate this and wish Verizon would just be declared a common carrier, if the choices are either Netflix pays to get to my house or Netflix service sucks...I'd choose the former.

      • by Dancindan84 (1056246) on Tuesday April 29, 2014 @09:12AM (#46867133)
        And unfortunately that's going to be the downfall of net neutrality. Too many people who would prefer to have equal access to everything... until they can't watch their show without it buffering. The big ISPs know that the will to fight is low enough they can do what they want and get away with it.
        • by Jason Levine (196982) on Tuesday April 29, 2014 @09:24AM (#46867247)

          It's even worse than that. The big monopolies know that the "bad connection issues" aren't likely to blow up in their faces - or, if they do, customers will be powerless to do something about it. If you're Joe User and Netflix won't stream, chances are you'll blame one of two entities: Netflix or your ISP.

          If you blame Netflix, you can put pressure on Netflix by threatening to leave. After all, there are competing services such as Amazon Prime. (You can argue that said services might not be as good as Netflix, but they are still alternatives.) So Netflix would feel pressure to do whatever it takes to get the connection "working" again, even if it meant paying the ISP's fast lane bribery fee.

          If you blame your ISP, you can try to threaten to leave, but your ISP will just laugh at you. Most Americans have only one or two ISPs in their area. If you leave the one and the other does the same thing, what option do you have? And if you only have access to one ISP, what option do you have? You can ditch all Internet access, but the ISPs know you won't do that. So you're forced to grumble and complain online, but still pay whatever the ISP demands you pay for the level of service they deign to provide you.

          The ISPs are essentially playing a game of chicken with Netflix except the ISPs are in an armored SUV and Netflix is riding a bicycle.

          • In the case of netflix and amazon, they're sorta the same entity. [networkworld.com] Hulu is probably the one they fear, since they are backed by the networks and "content producers" who are interested in regaining the distribution side of things. And, bonus, Hulu is part owned by comcast. I'm obviously not in any board room discussions, but who wants to bet that if netflix and amazon don't pay up, their customers will suddenly find that netflix and amazon are nothing but buffering while Hulu offers everyone a free month o
            • I don't think anyone seriously fears Hulu. They may be owned by the content providers, but that's hurting them, not helping them. Companies like Comcast want to protect their current video services so they don't want Hulu being too innovative. So the offering is doomed to be an also-ran unless they decide to push it no matter what the consequences to "traditional TV."

              • by Bengie (1121981)
                Yeah, my wife tried Hulu, hated it. She only purchased it for a certain show, but promptly canceled her account saying it was not worth the hassle.
        • Too many people who would prefer to have equal access to everything... until they can't watch their show without it buffering.

          What you are really saying is that the way most people use their broadband Internet service is changing ---- and triple AAA streaming media content from Netflix and others has priority.

      • As a customer of Verizon FiOS, I'm happy that something is happening.

        I don't disagree, and am not opposed to schemes where the biggest content providers pay some of the cost of infrastructure. But a large part of your poor NETFLIX performance was intently "allowed to happen" by Verizon in the first place, even though you were paying them for quality service. Regulations for connection fees should require a set pricing structure.

        Last mile content differentiation should never be allowed as long as the customer is paying for a certain quality of access.

        • But a large part of your poor NETFLIX performance was intently "allowed to happen" by Verizon in the first place, even though you were paying them for quality service.

          That's the part that pisses me off about this entire situation - I, the customer, am paying X amount of dollars for Y amount of bandwidth; I am not paying them to spy on me, or throttle my connection, or limit what parts of the internet I can reasonably access, nor did I ever ask for or authorize such activity. Classic bait-and-switch, except nobody gets their ass handed to them for it.

          • That's the part that pisses me off about this entire situation - I, the customer, am paying X amount of dollars for Y amount of road use; I am not paying them to spy on me, or get caught in traffic, or limit how many vehicles I want to put on the road for that one flat fee, nor did I ever ask for or authorize such activity. Classic bait-and-switch, except nobody gets their ass handed to them for it.

            The problem is that you're not expected to be able to use your whole bandwidth all the time, and you were never supposed to. Yes, they needed to tell you that and they didn't, but ultimately that is the way the network is designed. If you want a constant 20Mb downstream, go lease a bonded line. You're looking at $15,000 PCM.

            • Methinks, through really, really bad analogy, thou hast missed my point.

              You didn't seriously compare public roads to private services, did you?

            • by Bengie (1121981)
              I'm paying $100 for a dedicated 50/50 connection that gets 50/50 24/7. What's your excuse now? You should see my data usage... bwaa-hahaha. My ISP actually told me I should get my rated speed all the time and if I don't, to call them. They stand behind the "dedicated". Once I had it when my ping to game servers went from 8ms to 15ms. I called them at 1am in the morning when I was playing, and they had someone out at my house 8:30a the next morning, 7.5 hours later. It did take them a few days to look into t
          • by geekoid (135745)

            You also don't pay the store to spy on you, they have cameras. To you go on and on about that as well?

            • You also don't pay the store to spy on you, they have cameras. To you go on and on about that as well?

              Nope, I typically don't waste my time with strawmen, except to torch them, and I just so happen to be all out of lighter fluid at the moment.

          • But a large part of your poor NETFLIX performance was intently "allowed to happen" by Verizon in the first place, even though you were paying them for quality service.

            That's the part that pisses me off about this entire situation - I, the customer, am paying X amount of dollars for Y amount of bandwidth; I am not paying them to spy on me, or throttle my connection, or limit what parts of the internet I can reasonably access, nor did I ever ask for or authorize such activity. Classic bait-and-switch, except nobody gets their ass handed to them for it.

            HAHAHA...really? time to read the ToS. That phrase(not verbatim but states something like) 'monitoring their network...for suspicious activity' etc. Is just a buzz phrase for 'we can watch what you do on our network'

    • by Roxoff (539071)

      As a customer, the download rate you'll be getting has nothing to do with infrastructure quality or how much you pay, it's determined by some cosy little deal between your ISP and a movie provider. You have no freedom to enter a contract knowing what you're buying from your ISP - so it sounds like a class action suit could do very well.

      But then again, the network infrastructure is owned by the ISP - they can charge what they like for it and to whoever they like. What you really need is competition, at lea

    • Sorry, this is making the server better. Rate goes up when that happens.

  • by raymorris (2726007) on Tuesday April 29, 2014 @09:19AM (#46867179)

    The fact that Slashdot is treating this as news seems to be confusing some people. Netflix just bought bandwidth from Verizon service, just like a million other people do. You pay for your connection, Netflix pays for theirs.

    As the summary mentions, but apparently not clearly enough, this has nothing whatsoever to do with net neutrality. Netflix was getting a connection from Cogent (like I do). Now they are getting a connection from Verizon.

    Since they use a lot of bandwidth to alot of places, they buy connections from several ISPs, again just like I do, and everyone else who runs popular web sites. That's how it's done and how it's always been done. The only thing new is that Netflix is whining about paying their bills.

    • by kaiser423 (828989) on Tuesday April 29, 2014 @09:37AM (#46867373)
      Pretty succinct summary, but it ignores some of the subtleties. Netflix was paying Cogent, and then Verizon and Comcast basically clogged that interconnect either by neglecting it, not upgrading it, or what have you, making the Cogent connection useless and used it as a bargaining chip in negotiations. Being able to degrade your competitors is typically a regulatory issue, hence the call for net neutrality. It obviously wasn't a technical issue given that the ISPs were able to triple their speeds overnight. I don't think that there's a problem if Netflix wants to buy bandwidth directly from the ISP if it's cheaper/better. But, given that the ISP can essentially force Netflix's hand by making all other competitors service substantially worse, it seems more like rent seeking than a competitive marketplace.
      • Re: (Score:3, Interesting)

        by alen (225700)

        yeah, cogent agreed to deliver a lot of data from netflix knowing they didn't have the bandwidth on the ISP sides of their networks to actually deliver it
        and if you read the news last year, they refused to upgrade those connections and cried network neutrality

    • by dloyer (547728)

      Wrong.

      This is about monopoly pricing and you will pay the price.

      Verizon already charges consumers the most they can. They have maximized the revenue flow from consumers.

      Now they want to charge content providers for access to their users. A whole new source of incremental revenue.

      This has nothing to do with the cost of providing service. This is all about maximizing revenue. There is NO benefit to the consumer other than Verizon will provide the service they already paid for. Consumer bills will not be

      • by alen (225700)

        if you sell so much content like netflix does it only makes sense to connect directly to ISP's instead of having your content fight for space with all the other content on the tier 1 networks
        and netflix had no business pushing out super hd if cogent or any other partner couldn't deliver it

      • When Netflix pays their hosting bill, like every other web site does, the benefit to consumers is that they can watch Netflix. Netflix was trying to be the only web site in the world who doesn't pay their bandwidth bill, without having their service cut off for nonpayment.

        Initially, Netflix tried what a lot of new webmasters try - buying bandwidth from the cheapest, crappiest provider there us, Cogent. Cogent IS cheap. They are cheap because they don't consistently deliver the bandwidth they promise, an

        • by Bengie (1121981)
          Netflix couldn't purchase from anyone other than Cogent, Verizon refused to accept Netflix traffic from anyone else. Even Level 3 tried to help out and Level 3 said Verizon wanted to charge more for peering than transit. Verizon was purposefully trying to price gouge Netflix.
    • by JerryLove (1158461) on Tuesday April 29, 2014 @10:47AM (#46868019)

      I'm not sure you've entirely grocked the idea of an "Internet" and are confusing it with an "Intranet".

      Verizon has advertized that I can buy X amount of internet connection, and then (deliberately) failed to create the upstream connections to deliver on that promise. Netflix, one of those up-stream providers who pays Cogent for access to the internet, is now having to pay Verizon for access to its intranet which, according to my earlier statement, is supposed to be internet.

      Now we all realize that bandwidth upstream isn't infinite. If everybody and their brother decided to attach to my server at home, they cannot expect that only their paid-for internet connection would determine their connection speed (as mine would come into play), and even at a peering level, congestion is an inevitability at some point.

      But the goal of Verizon, in servicing its customers, is *supposed* to be doing the best it can to provide promised internet badnwith to locations that its customers are tyring to reach. We know they will not succeed perfectly.

      The issue is when Verison begins to, for the sake of profit, selectively limit peering. They are no longer attempting to fulfill their promise to give me internet access at a given bandwidth. It is this willfulness that moves us from "the way the thing works" to our gripe with the way the major ISPs are operating.

      Let me put this in a different context. If TWC suddenly solved all its problems with NetFlix in my area, and if the public at large was aware of this, there would be a migration from Verizon to TWC. At that point, Verizon would suddenly improve its peeing with Netflix.

      The only reason they did not, is because they are duopoly and so did not have to. That's pretty-much the bright-line test for whether there is abuse.

      ISPs should be common carrier.

      • by antdude (79039)

        "... At that point, Verizon would suddenly improve its peeing with Netflix..." -- Eww, peeing? :)

    • by Monoman (8745)

      I have no problem if Netflix wants to pay for direct connections to ISPs. I do have a problem if they are forced to do it because the ISPs are tweaking their networks in such a way that Netflix is forced into the agreement.

      I"m not saying that is what happened.

    • by Bengie (1121981)
      Except people pay their ISPs for transit to access the Internet, Netflix is paying not to access the Internet, but only Verizon, and even then, Netflix still shoulders the burden of making sure they do so locally. Verizon won't even handle distance over their own network. No one pays for the kind of crap unless they have an SLA to uphold that they're selling to someone else.
  • BAD: This is a violation of Net Neutrality because it's giving Netflix right-of-way on other people's ISP links.
    GOOD: Netfilx is now placing servers even closer to users, so they have to travel less distance in network terms to get to the users.

    • by Bengie (1121981)

      Netfilx is now placing servers even closer to users, so they have to travel less distance in network terms to get to the users.

      They're not actually. Verizon and Comcast have only agreed to open up for peering, which was already being done by the CDNs. The data did not get any closer, they just cut out the middle man and jacked up the rates. Usually the opposite happens.

  • when i watch netflix, i want my streams crossing every tier 1 network there is. i even do automated traceroutes while i watch a show.

    a 2 or 3 hop traceroute? that's like a porn trailer without a money shot

  • by bickerdyke (670000) on Tuesday April 29, 2014 @09:31AM (#46867311)

    This seems to be nothing more than a peering agreement between Netflix Network and Verizon Network. And as usual, if the flow of data is not roughly symmetric, money is flowing the opposite way.

    Although I think that if one of the networks isn't a transport network but a content providers own network, the usual term is "multihoming"

  • This is no threat to neutrality. This isn't even a neutrality issue. The carriers WERE neutral. Everyone else's traffic got the same shitty treatment, or good treatment if that was the case. But all traffic was treated equally and that is the goal of neutrality. However, peering relationships typically allow your traffic to pass if you allow my traffic to pass. But any carrier of Netflix is going to cause an imbalance and Netflix's PR wing decided to conflate the issue into one of neutrality, which i
  • Yes, Netflix. Pay then for backbone access. Then pay them for last mile connections. That's probably enough to satisfy Comcast. Why would they want to find more ways to make you pay? Why would they want to squeeze every last cent out of you? That would put you out of business. Surely they don't mean to do that.
  • by DigiShaman (671371) on Tuesday April 29, 2014 @09:49AM (#46867459) Homepage

    And the cost of doing this will be passed down to the consumer. Netflix confirmed that it will be raising its prices for streaming customers by 1 to 2 dollars for new customers only (depending on country). I can only imagine once this trial balloon proves viable, the rate increase will be for existing customers too. Obviously they don't want to lose existing customers now, hence the hold off. Also, a price increase is due thanks to inflation; so there is always that.

  • by Richy_T (111409) on Tuesday April 29, 2014 @10:34AM (#46867881) Homepage

    Verizon subscribers, you just became the product.

    This sets an unfortunate precedent. I can't really blame Netflix for wanting to keep their business going but this is going to open the floodgates.

  • Yay, now they can spend less on content licensing for stuff I actually want to see in favor of them streaming things I don't want to see EVEN FASTER. Yay! Oh wait, I'm not a Verizon customer so actually they're just plain wasting my money with no benefit. Awesome. Why don't they really piss me off and add ads too to pay for the priority bandwidth. Ads for Verizon even. That'd complete the cycle of stupidity pretty nicely.

    By the way, I'm deeply confused. Netflix does not send data above 3 megabits.
    • by robot256 (1635039)

      To resolve your confusion: Time Warner won't throttle *your* bandwidth, they will throttle *Netflix's* bandwidth getting into their network. So even though you have 15Mbps from Time Warner, and they're only trying to push you 3Mbps, if 2 million Time Warner customers all try to get 3Mbps from Netflix through a single 10Gbps pipe, most of them will be sorely disappointed. Netflix would then have to pay Time Warner for a 100Gbps pipe.

      And to be straight about this, none of it is about hardware cost. ISPs

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