Comcast CEO Brian Roberts Opens Mouth, Inserts Foot 343
lpress (707742) writes "At a recent conference, Comcast CEO Brian Roberts rationalized charging Netflix to deliver content by comparing Comcast to the Post Office, saying that Netflix pays to mail DVDs to its customers but now expects to be able to deliver the same content over the internet for free. He forgot to mention that the Post Office does not charge recipients for those DVDs. The underlying issue in this debate is who will invest in the Internet infrastructure that we badly need? Comcast has a disincentive to invest because, if things bog down, people will blame content providers like Netflix and the ISP will be able to charge the content provider for adequate service. If ISPs have insufficient incentive to invest in infrastructure, who will? Google? Telephone companies? Government (at all levels)? Premises owners?"
He also forgot to mention... (Score:5, Insightful)
That everyone has to pay for access to the Internet, including Netflix. They've already paid, but Comcast arbitrarily expects them to pay even more just because their own customers want to use Netflix, which makes zero fucking sense.
Classify net access as a utility? (Score:5, Insightful)
This may be an absurd suggestion, but given that internet access is somewhat required to participate in society today, perhaps it's time to class internet access as a utility like water and electricity/gas.
Re: Govermental oversight (Score:5, Insightful)
It doesn't need regulation, it needs competition. Can't wait for an alternative to ditch fucking Comcast.
Re:treat Netflix like a television network (Score:5, Insightful)
Yeah, that's fucking brilliant. Let's package Netflix along with 105 other online services we'll never use, all for only $125 a month.
Moron.
Re:He also forgot to mention... (Score:5, Insightful)
What's more, his analogy actually supports Comcast NOT charging Netflix, rather than the other way around.
Being a Canadian resident, if I want to send a letter to someone in Canada, I pay Canada Post to deliver it.
If, on the other hand, I want to send a letter to someone in a different country, say, the USA, or England, I pay Canada Post to deliver it. I do not have to pay the United States Postal Service or Royal Mail to deliver my letter sent from Canada.
In this analogy, countries and regional postal services are equivalent to ISPs. If I want to send a network packet (letter) to someone on a different ISP (in a different country), I pay my local ISP (postal service) to deliver it. Any ISP (country) beyond that is not my responsibility.
Re:Classify net access as a utility? (Score:5, Insightful)
My water pipes and electric lines have been working perfectly 24/7 for several years now. I have never been unhappy with the speed and quality of the water coming from my taps.
Countries like Japan, S.Korea and Sweden seem to have no problem providing an internet service as high-quality as tap water.
Meanwhile, US citizens pay $80/month for access to the village well.
Invest with all the money I pay you scumbags (Score:5, Insightful)
My Comcast bill is $57.99 for 10Mbps internet only. I just got a couple of "threat" letters saying that my "promotional" pricing is about to expire and I will pay even more for their lovely service. Never mind that my promotional pricing actually ended six months ago.
They are already making money hand over fist off their customers. They should use that money to invest in their own infrastructure improvements.
Re:He also forgot to mention... (Score:5, Insightful)
What's more, his analogy actually supports Comcast NOT charging Netflix, rather than the other way around.
Which in my case, i do. I pay Comcast a monthly 'delivery fee'. what is delivered is of no business to them, just like the post office.
Re:Post office recipient *do* pay... (Score:2, Insightful)
That loss is completely due to the pension funding liability congress placed on them in 2006, which will expire in 2016, bringing them back into the black with pensions fully funded for the next 75 years.
Re:He also forgot to mention... (Score:5, Insightful)
If that were true, then Comcast wouldn't have a complaint about network congestion - it wouldn't happen.
Any congestion would only occur at the Netflix connection point. Thus, once again, Comcast doesn't have a problem.
If the congestion occurs at the COMCAST connection to the backbone, then COMCAST has a problem. Not Netflix. If Comcast wants to service their customers, they need to upgrade THEIR connection to the backbone - not force Netflix to pay a bribe to Comcast to NOT IMPOSE CONGESTION. This is commonly known as "extortion".
Re: He also forgot to mention... (Score:5, Insightful)
You're missing the fact that Netflix is in all of those data centers. The problem is that Comcast is intentionally degrading their peering in those data centers meet-me rooms in an attempt to get more direct customers.
Furthermore, if you're large enough Netflix will actually supply servers that you can plug into your network to provide the top x percentile of content -- for free.
This is purely a Comcast wants more money and hates video competition issue.
Re: Google is Nashville's only hope (Score:5, Insightful)
The ability to run a server is an overlooked part of net neutrality. The debate now is motivated by content providers who only care about downstream parity with other providers â" but real neutrality would also allow consumers to run their own servers including mail and web servers. That would open up markets for plug servers and turn the privacy debate on its ear. In the long run, it might even prove more important than content provider equality.
Just so. However, I'd go even farther than that. The last mile protocols (DOCSIS, ADSL, etc.) that have been developed mimic the Consumer (download)/Provider (upload) model.
This is a direct assault on free speech and free collaboration across the Internet.
Restricting servers is just another part of the process which limits the promise and potential of the Internet.
When everyone can have reasonable upload speeds, then everyone can host content, everyone can publish their creative output, each of us can share our thoughts and ideas with the world, the big content providers (including MPAA/RIAA, major newsotainment outlets, the eBays and AmazonMarketplaces of the world) will become less relevant, and we will become freer.
I know it's a pipe dream. But a fella can dream, can't he?
Re:He also forgot to mention... (Score:2, Insightful)
No, Netflix negotiates with the Post office for a fixed fee, and the customer pays that fee both ways. Do you live in a country were private firms magically get money to pay for services they provide, or do most people live in the real world where the customer pays for services provided?
N>klcertain fee, and cannot negotiate outside of that construct. The courts have said so.
However the Comcast is a private firm, so is free to negotiate minimum service levels with customers. While this is obviously problematic, is does solve a basic problem with streaming video. That unlike broadcast which has minimal marginal costs as users increase, the marginal costs for the internet provider is pretty much linear.
One reasonable solution is to separate the data lines from those who are selling data plans over those lines. This is the way electricity is done. The challenges are that complete deregulation means that the resource can be scarce, as when some good old boys in Texas total crippled the California economy. Another problem is that in a significant event, like hurricane or earthquake, repair to the infrastructure is often paid for by additional fees to the end user. Also, there is no incentive for the firm that controls the physical infrastructure to move very quickly with repairs as they are not losing a great deal of money every hour. However, if we want free market solution that maximizes net neutrality this is probably the way to go.
Re: He also forgot to mention... (Score:5, Insightful)
Well it makes a bit of sense for the average ISP - their fees are based on presumed overcommit rates and it's possible to break those assumptions if everybody pumps enough traffic. Everybody is stuck on fixed-rate billing so the grandma doing webmail pays as much as the 10-meg-up-24x7 torrenter when the costs are way different. I even heard an ISP owner say that customers couldn't understand usage-based billing (these are people who pay electric bills). Insistence on fixed-rate billing will inevitably lead to bureaucrats central planning the Internet. If you put emotion before economics, you'll get exactly what you deserve. A libre Internet will eventually require per-packet billed routing (fractional shatoshi?) but if everybody insists on a gratis Internet they won't get the libre one.
Comcast's anti-competitive bullshit is a red herring in the neutrality debate if you understand that what's really happening is that the overcommit gamble is starting to no longer pay off and they're mostly looking to soften that blow to their failing business model.
I call BS (Score:5, Insightful)
The fact they like to make it sound like they need to invest so badly in bandwidth is BS, only the last mile to the home is so expensive, and with them dropping all analog channel to the home that frees up lots of DOCIS bandwidth going forward so that should help allot. They do need to spend allot of money to drop SDV and go completely digital but they still put that off because they love to rebuild the whole network every couple years on the edge anyway.
But all the backhaul and backbone fiber connections have been getting increasingly cheaper, most routers had a max interface speed of 10Gbit's, but with 100 Gbit interfaces becoming more common, and the fact that all DWDM optical gear are seeing jumps from 10 Gbit per lambda to 100Gbits per lambda by just swapping out some hardware that is not free but still utilize the same physical fiber but basically make it 10X more for a small upgrade cost.
I am convinced they only cry about bandwidth costs because that is what they really sell now, and are afraid that its just going to keep getting cheaper and cheaper, which it is.
Re: He also forgot to mention... (Score:5, Insightful)
The point is that, in both cases, the sender/content provider has already paid. If there's an additional cost to transmitting the content across a boundary (different country or different peering service), then in both cases that has already been factored into the cost of sending it, and paid to the local provider (post office or ISP).
By Comcast's reasoning, the parcel sender should also expect a bill from any countries the parcel travels through, despite paying the full postage when sending. If Comcast wants more money for transmitting content, they need to take it up with their neighbour peering providers, not with the content producers or consumers.
Re: He also forgot to mention... (Score:5, Insightful)
NBC/Universal should be separated from Comcast/Xfinity as a condition of any more mergers/acquisitions.
USPS is not a publisher. (Score:5, Insightful)
The Postal Service also doesn't publish a lot of material it mails for itself.
Comcast/Xfinity should be forced to separate from their content creation side. (NBC/Universal)
Re: He also forgot to mention... (Score:5, Insightful)
NBC/Universal should be separated from Comcast/Xfinity as a condition of any more mergers/acquisitions.
NBC/Universal is not the problem here. The problem is that Comcast's Cable TV offerings make a lot of money (probably more than the Internet business) and as people move away from cable TV to Netflix and other streaming services their ability to ream their customers will be diminished.
Re:Classify net access as a utility? (Score:5, Insightful)
This may be an absurd suggestion, but given that internet access is somewhat required to participate in society today, perhaps it's time to class internet access as a utility like water and electricity/gas.
I doubt you would find anything that would lead to the destruction of Net Neutrality faster.
Please. Enlighten us. How exactly would reclassifying ISPs as common carriers [wikipedia.org] destroy net neutrality?
In fact:
What was that you were saying? Oh, that's right. Nothing.
Re:He also forgot to mention... (Score:5, Insightful)
Maybe, but the mail doesn't cost more 'cause it goes to my aunt Emma instead of the billing department of the power company next to her.
Re: He also forgot to mention... (Score:3, Insightful)
Yes.
It's called a PEERING arrangement, as in two PEERS talking to each other. If Comcast feel that they are not benefiting from the arrangement, they are free to terminate the peering and accept the traffic via. some other means, all of which will cost them more money.
Comcast would have to upgrade their networks, you say? Well boo hoo: it isn't the fault of Netflix that Comcast customers want their data. Comcast customers have paid Comcast to deliver them data. If Comcast are failing to do that, it isn't the fault of Netflix.
Re:He also forgot to mention... (Score:5, Insightful)
The problem is, where's the upside for Comcast?
In a sane world, the up side would be that they got to keep their customers, who would leave and go to someone else if Netflix didn't work properly. In our world, they often have a monopoly on high-speed internet access within a market, and so their customers will simply have to suckit.
Comcast isn't treating Netflix any better or any worse than anyone else. Comcast has always been consistent in it's policy - if you want access to their network, you pay them.
And they and all other internet service providers should be prohibited from engaging in that kind of behavior. Content should be separate from transport. It is long past time to force ISPs to behave as common carriers. We forced the telcos, we can force the ISPs.
Re: He also forgot to mention... (Score:4, Insightful)
Lets try to make a better analogy.
Lets say the USPS instead of charging per parcel, instead charges each tax payer a base $30/month, but the customer is allowed 5 parcels per month. But you only get that deal if you bundle with their overpriced car insurance, otherwise you pay $60/month for 5 parcels. If you want to get more parcels, then you can get the 20 parcel per month for $100, for the first 6 months, then $150 after.
Since you need to get mail, you put up with this, then suddenly, after a decade of this highway robbery, Amazon starts offering this wonderful service that allows you to make use of your underutilized mail system that you pay so much for. Now you can order your regular things online and have them shipped without the hassle of going to a store or forgetting.
So lots of people start using this Amazon service. Amazon pays FedEx $2 per parcel to deliver to your city, where FedEx hands off to USPS, then USPS delivers it to you. After a while, USPS gets cranky that they're now having to deliver a lot more packages. Lots of people have upgraded to their $150/month package to get 20 parcels per month, but USPS can't handle it because they've never had this demand before.
USPS then refuses to accept more parcel from FedEX, which causes parcels to back-up and get delivered late. Amazon asks FedEx if there is anything can be done, but FedEx says they can't because USPS refuses all negotiations.
Eventually Amazon caves in and enters into an agreement where Amazon pays USPS $2 per parcel, but Amazon has to deliver the parcel to the city, then USPS will deliver it the rest of the way. Because Amazon was paying FedEx to deliver the package for them, Amazon now has to provide that service for themselves.
USPS customers are now paying increased Amazon prices, while paying exorbitant USPS prices. USPS's rational is that if the customers want to make full use of the service they've purchased from USPS, then the customer should have to pay even more, but USPS didn't want to raise their bill because customers wouldn't like that, so instead they indirectly increase their bill by charging the suppliers of what the customers want
All the while in another city, UPS(Google Fiber) is charging $50 per month for unlimited packages and even lets Amazon use their local warehouse for free, which helps reduce Amazon's and UPS's costs.
Lets put this all into perspective. Transit is priced about $0.45 retail, and costs even less. But lets give Comcast a bit of wiggle room and assume that on average, bandwidth costs $0.50/mbit. This is bandwidth that can reach anywhere in the world. Comcast oversubscribes about 20:1, which means that bandwidth is really about $0.025/mbit per customer. Comcast then turns around and charges $100/month for 100mbit, which only costs them about $2.5 in bandwidth. Then Comcast complains that Netflix is using too much of this bandwidth, because Comcast's network can't handle providing a measly 5mbit/s to many of their customers at the same time.
Comcast then gets this awesome idea, instead of paying for bandwidth, they should get paid for it! So not Comcast is making even more money, but making money isn't a bad thing in itself. So, what's wrong about Comcast wanting to make more money? Because Comcast is having their customers foot the bill for the infrastructure, then Comcast outright refuses to allow the customers to use the infrastructure to its fullest, then Comcast turns around and resells that same infrastructure for more profit to another company, while making no additional investments into the infrastructure.
The customer's didn't gain anything, they were only allowed to make more use of what they already paid for.
Imagine if you leased a 6 person van for the explicit reason to hold more of your kids and their friends, but then your car dealership tells Chucky Cheese that if they want you to be able to put 6 people into the van that you leased, Chucky Cheese will have to pay. Because... get this... 6 seat vans are expensive. No shit. Isn't that why you're paying a premium for a 6 person van over a 4 seat car?