Comcast: Destroying What Makes a Competitive Internet Possible 227
An anonymous reader writes "Vox has another in-depth report on the perilous state of net neutrality regulation, and how Comcast is attempting to undermine it. Quoting: 'In the bill-and-keep internet, companies at each "end" of a connection bill their own customers — whether that customer is a big web company like Google, or a an average household. Neither end pays the other for interconnection. ... ISP's typically do this by hiring a third party to provide "transit," the service of carrying data from one network to another. Transit providers often swap traffic with one another without money changing hands. ... The terminating monopoly problem occurs when a company at the end of a network not only charges its own customers for their connection, but charges companies in the middle of the network an extra premium to be able to reach its customers. In a bill-and-keep regime, the money always flows in the other direction — from customers to ISPs to transit companies. ... But when an ISP's market share gets large enough, the calculus changes. Comcast has 80 times as many subscribers as Vermont has households. So when Comcast demands payment to deliver content to its own customers, Netflix and its transit suppliers can't afford to laugh it off. The potential costs to Netflix's bottom line are too large.'"
comcast is charging less than Cogent and L3 (Score:4, Interesting)
Netflix even said Comcast is charging them very little for the connections and its not material to earnings.
i've seen estimates of $.30 to $.50 per megabit per second which is A LOT less than standard transit prices and an estimate that the netflix will pay $18 million per year for this. out of almost $5 billion in revenues this year and a current tech budget which includes transit of over $100 million
this is another blogger crisis. they scream for better internet speeds and when a deal to enable this finally happens they scream fraud and extortion
Re:Netflix is a terrible test case (Score:5, Interesting)
Comcast must be thrilled Netflix has emerged as the proxy case for Net Neutrality.
It doesn't matter though... as a user, YOU are "requesting" date from Netflix... and you have already paid Comcast for that bandwidth.
Another article today noted that carriers like Comcast deliberately let their nodes get congested so they can scream "bandwidth hogs!"
Shoot 'em down. Title II Common Carrier status for the lot of 'em. They've abused for far too long, and gotten rich in the process. Time to cut them down a notch, before they manage to throw their weight around so much they break everything in the room.
Re:Netflix is a terrible test case (Score:5, Interesting)
baby bells were common carriers and you had to pay them to terminate your phone calls on their networks
Yes, but...
Our Common Carrier telephone system, at least until the breakup, was the envy of the world. Rates were reasonable and closely regulated, they couldn't snoop, they couldn't pull bullshit tricks on their networks to get you to pay more, and local calls were a flat rate even if you talked all day.
In countries where competing companies were allowed to operate (instead of the U.S. "natural monopoly" setup), you had telephone systems that were fundamentally incompatible, mazes of wires, and sometimes you couldn't even call your own neighbor, because he was on a different system that was electrically incompatible with the one you used.
Now that many other countries have adopted more of a regulated "natural monopoly" system (even if not completely so), and the U.S. has gone almost all private, the tables are turned... we have among the worst service of Western nations while at the same time some of the highest rates.
Re:movies should not go over internet backbone (Score:2, Interesting)
Untrue. The CDNs are provided by Netflix for free [netflix.com].
The ISPs are refusing because many of them also operate cable companies/online services *cough*Hulu*cough* that compete with Netflix.