Verizon Accused of Intentionally Slowing Netflix Video Streaming 202
colinneagle writes "A recent GigaOm report discusses Verizon's 'peering' practices, which involves the exchange of traffic between two bandwidth providers. When peering with bandwidth provider Cogent starts to reach capacity, Verizon reportedly isn't adding any ports to meet the demand, Cogent CEO Dave Schaffer told GigaOm. 'They are allowing the peer connections to degrade,' Schaffer said. 'Today some of the ports are at 100 percent capacity.' Why would Verizon intentionally disrupt Netflix video streaming for its customers? One possible reason is that Verizon owns a 50% stake in Redbox, the video rental service that contributed to the demise of Blockbuster (and more recently, a direct competitor to Netflix in online streaming). If anything threatens the future of Redbox, whose business model requires customers to visit its vending machines to rent and return DVDs, it's Netflix's instant streaming service, which delivers the same content directly to their screens."
I think it's more likely a Cogent problem. (Score:5, Interesting)
This wouldn't be the first time people have had issues with Cogent having saturated peering links. A common complaint among Cox customers is that latency is high to certain WoW servers, and saturated Cogent links has been found to be the cause - and they don't seem particularly interested in fixing it.
Re:aren't there laws against monopolistic practice (Score:5, Interesting)
...or does that not apply to internet service providers?
In Canada it does, back a few years ago [dslreports.com] Rogers was involved in throttling everything, even though they said they weren't. Took the work of a few very determined people who brought it before the CRTC, and were told to stop or face fines. As a fun note, Rogers and Bell Canada were two of the greatest throttlers in the world back then.
Re:aren't there laws against monopolistic practice (Score:5, Interesting)
...or does that not apply to internet service providers?
Nothing prevents Cogent from purchasing access to Verizon network. What Cogent expects instead, is for Verizon to purchase more network ports so Cogent can offload their traffic for free. "Peering" is usually mutally beneficial, meaning traffic ingress and egress is balanced. If it is not, it does not make sense to provide free access and it is fair to expect on of the parties to pay.
Essentially, Netflix pays Cogent as their "ISP". Cogent probably won that deal with their ridiculously low pricing. And now Cogent expects Verizon to invest in their network so that they can act as an extension of the Cogent network, through a "peering" agreement.
Probably necessary disclaimer: I am not in any way affiliated with Cogent nor Verizon. I do, however, work for a vendor of high quality networking equipment.
Re:aren't there laws against monopolistic practice (Score:5, Interesting)
There are but they were pretty well gutted back in the days of the Reagan Administration. Now, the ones that are left are mainly ignored. The big exceptions, like the Microsoft case, usually come as political punishment or when the infraction is so blatant that it cannot be ignored.
If we had a Justice Department that was more than a bunch of cronies and amateurs, there wouldn't be a single telecom with any interest in content providers, and there certainly would not have been any of the mega-mergers in the airline industry and others.
We haven't had a real Justice Department since before the days of Ed Meese. Meese is really the very model of the modern attorney general, who believes his main job is to make sure no rich people get in any trouble and to find ways to subvert the Constitution.
How to fix "natural monopolies" (Score:4, Interesting)
This is an example of a "natural monopoly", where a limited community resource is owned as property by a corporation. In this case it's the easements and permission needed to run the phone lines, and the RF spectrum for cell-phone service.
If you treat the resource as property, you get the situation we have now: high fees for access and discouraged use. Phone service has high monthly fees (access) as well as data caps, fixed monthly "minutes", and roaming charges (discouraged use). Similarly for internet: high monthly fees (access), data caps, throttling, kicking off high-usage users, and so on (discouraged use).
As an alternative, take the revenues from the carriers and divide by the total minutes of service. I don't know what that figure actually is, but for purposes of discussion let's say it's 5 cents a minute. A similar calculation can be done per gigabyte of internet data.
Suppose the government mandated that carriers could only charge that amount or less, with no other restrictions. Any phone could be used with any carrier, and you choose a carrier at call time by scanning the available carriers like we scan wireless access points. (You wouldn't explicitly scan for each call. Most likely you choose one carrier as default, like we now do with wireless access points.)
Now instead of making money by getting people to sign up and not use the service, carriers make money the more people use the service. They have to encourage more people to use it, and for longer periods. They have an interest in putting unused capacity to work, and promoting innovative new uses. If a channel is overallocated, they have an interest in building out more capacity.
The reasoning can be applied to cable TV, internet, and phone service. If the cable company can only charge 15 cents per hour of viewing/downloading (whatever the fee structure works out as), then they will encourage more usage rather than throttling.
If this change is made, the existing players will make the same profit as now: initially the profits are the same, and no workers need be laid off. Their bottom line doesn't change, only their focus of service.
It's game theory: change the rules so that the outcome is more desirable.
Re:aren't there laws against monopolistic practice (Score:5, Interesting)
Verizon already got paid, by their customers, the ones who are requesting to stream from Netflix.
Not only that... if you are ISP, and you have enough traffic to Netflix; Netflix will provide a 'local cache box' to install on your network. OpenConnect [netflix.com] hardware appliance.
Netflix pays for the hardware and such.
Large ISPs such as Verizon, can potentially put multiple boxes on their network, so they save cost and do not transport large amounts of Netflix traffic long distances.
Verizon chooses not too. Obviously, they cannot think their customers do not value Netflix. Clearly, they don't care much about their customers -- or there's an alterior motive; or just plain ignorance, blindness, and stupidity.
Wait (Score:5, Interesting)
I work for a telco, and not too long ago I got to chat with one of our VPs about why this happens. I'm a total net neutrality guy, but after talking to him I understood his point of view a bit better.
With most large content providers, like google for example, ISPs can go to them and say "hey, we're getting a lot of traffic from you. It's cheaper for us if we can make arrangements that are beneficial to the both of us." and then the ISP and the content provider enter into an agreement where the ISP pays a bulk rate for trunks to a network, and the content provider remains on that network and gives plenty of warning before switching so the ISP can make sure that they have enough capacity in that direction.
Netflix however, doesn't make these kind of agreements. The switch providers and hosting at will. The ISP will pay for large trunks leading to where the majority of netflix traffic is coming from and then Netflix will suddenly drop that host and switch to another. Suddenly 20% of the ISPs traffic is coming from an entirely new network. But they are still locked into a contract with that other network.
Also, Netflix has no interest in the health of the ISPs network. If Netflix had a financial interest in the health of the network they could do some rather simple things to help the isp, like encourage users to queue up movies ahead of time, have them download at off peak times and then play when they wanted to watch them. This is was cable companies do after all... but netflix has no interest in this sort of thing and as far as the ISP is concerned is doing is best to be as damaging to the network as possible.
I'm still all for net neutrality, but its good to understand the ISPs concerns. They aren't just out to thwart Netflix. But Netflix is digging their own grave on this one.
Re:aren't there laws against monopolistic practice (Score:5, Interesting)
Verizon chooses not too. Obviously, they cannot think their customers do not value Netflix. Clearly, they don't care much about their customers -- or there's an alterior motive; or just plain ignorance, blindness, and stupidity.
No Verizon chooses not to because they can't charge $100 a month for cable video in a free market with actual competition. Thus they stop delivering other video service over the internet eliminating the competition.