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Re:Netflix responds to Verizon by cipherzero on Tuesday June 10, 2014 @10:08AM (#7872534)
What's the Open Connect program they mention? how does it work?
Re:Netflix responds to Verizon by hackerguy0217 on Tuesday June 10, 2014 @10:15AM (#7872580)
ISPs can directly connect their networks to Open Connect for free. ISPs can do this either by free peering with us at common Internet exchanges, or can save even more transit costs by putting our free storage appliances in or near their network.

Major ISPs around the world have already connected to Open Connect, including Frontier, British Telecom, TDC, Clearwire, GVT, Telus, Bell Canada, Virgin, Cablevision, Google Fiber, Telmex, and more

https://www.netflix.com/openconnect

Re:Netflix responds to Verizon by Terretta on Tuesday June 10, 2014 @12:46PM (#7873659)
Cablevision's Netflix offering is in fantastic "Super HD" because Cablevision did the right thing and let Netflix store and manage content inside Cablevision's network so it doesn't flow over peering edges. The quality is shocking.

But then, Cablevision in general is shocking -- when you compare to most other cable ISPs. I can sustain 130+ megabits day or night on a 100 megabit service tier, with the reliability of dial tone.

Other ISPs need to follow the Netflix/Cablevision partnership model. People who have that, worry about moving and losing it.

Re:Netflix responds to Verizon by barrkel on Tuesday June 10, 2014 @12:58PM (#7873749)
As far as I'm aware, not all ISPs get that deal - the ISPs need to pay Netflix for it.

There are four invariants as I see it:

1) Netflix is using a significant amount of a limited resource (bandwidth) 2) If Netflix doesn't work, consumers blame their ISP, not Netflix 3) The consumer is going to pay for this bandwidth, whether via ISP or Netflix 4) Consumers don't like caps or understand special packages that differentiate between packets routed one way or another

If Netflix doesn't pay for this bandwidth, then ISPs need to pay for it - and consumers will pay more to their ISPs to cover these costs. That means that consumers that don't use Netflix will be subsidizing consumers who do use Netflix.

IMO ISPs should charge Netflix so that Netflix can charge higher prices to users who are using more bandwidth via Netflix. That better reflects the link between who's using a limited resource and who's paying for it. Unfortunately, because of point (2) above, Netflix has quite a strong bargaining position.

Re:Netflix responds to Verizon by criley2 on Tuesday June 10, 2014 @11:29AM (#7873083)
Free is a misnomer and the misnomer that is driving this whole debate.

There is a cost involved with peering, even if the peering relationship is "free". That cost is the crux of much of these issues today, as Verizon (and Comcast and others) feel that Netflix should pay for their own in-house upgrades, because Netflix is creating the need for those upgrades.

Netflix argues, and I agree, that the customer is creating the demand for the data, and the customer is paying for access to the data, and the customer is paying for the infrastructure to get the data they're requesting.

OpenConnect means "You're welcome to spend a bunch of money upgrading your interconnection to our free network"

Re:Netflix responds to Verizon by commandar on Tuesday June 10, 2014 @11:36AM (#7873130)
This would be true if not for the second half of the program:

>or can save even more transit costs by putting our free storage appliances in or near their network.

They don't have to interconnect to anyone. Netflix is even offering them storage devices to keep the traffic internal to their own networks.

Re:Netflix responds to Verizon by devicenull on Tuesday June 10, 2014 @11:40AM (#7873164)
> OpenConnect means "You're welcome to spend a bunch of money upgrading your interconnection to our free network"

Or colo their equipment https://www.netflix.com/openconnect/hardware . If upgrading interconnects is such an expensive issue, surely these ISPs could find 4u somewhere to stick one of these boxes in?

Re:Netflix responds to Verizon by lotsofmangos on Tuesday June 10, 2014 @02:50PM (#7874553)
Constantly upgrading telecoms infrastructure to cope with increasing demand is the only way to stay in business if you are a telecoms company, unless you have a monopoly. If they think realtime video is bad, they are really screwed in the long run.
Re:Netflix responds to Verizon by hga on Tuesday June 10, 2014 @04:13PM (#7875025)
Quasi-realtime video has the special distinction of competing with their own video offerings, e.g. see https://news.ycombinator.com/item?id=7873331 for some Verizon numbers.
Re:Netflix responds to Verizon by Touche on Tuesday June 10, 2014 @11:15AM (#7872971)
Can you explain why ISPs should pay to run your servers in their network and not do the same for my personal homepage?
Re:Netflix responds to Verizon by alex_sf on Tuesday June 10, 2014 @11:32AM (#7873109)
That's a mischaracterization of the situation.

ISPs complained about the amount of traffic originating from Netflix.

This traffic was requested by the ISP's customers, and the bandwidth to carry it was promised by the ISP.

But, still, the ISPs were unhappy. So Netflix approached them and said they are willing to offer local caches of Netflix content, for free, to any ISP that requested it to reduce network congestion.

This was a gesture of good will by Netflix, not an attempt to outsource their hosting costs. It is, fiscally, a loss to Netflix because they need to purchase and maintain the storage appliances for open connect partners.

Re:Netflix responds to Verizon by Titanous on Tuesday June 10, 2014 @12:31PM (#7873544)
Actually I don't think the fiscal loss is so clear-cut. Each deployment of cache nodes removes load/bandwidth from the rest of the CDN, and also reduces support time spent with customers.

In fact, 100% of Netflix traffic outside the US and 90% inside the US is served from Open Connect[0]. It is actually a shift of the location of the serving hardware that allows both parties (the ISP and Netflix) to save on bandwidth. This is a net win for everyone.

[0] http://arstechnica.com/information-technology/2014/05/netfli...

Re:Netflix responds to Verizon by nathos on Tuesday June 10, 2014 @11:19AM (#7873002)
Because your homepage doesn't attract many TB of traffic?
Re:Netflix responds to Verizon by Touche on Tuesday June 10, 2014 @11:20AM (#7873010)
So, bandwidth. What is the threshold with which ISPs should start giving out free hosting?
Re:Netflix responds to Verizon by criley2 on Tuesday June 10, 2014 @11:32AM (#7873108)
It's not free hosting. It's not even hosting a webpage because it's not internet facing at all. Comcast customers can't visit the "free webpage" hosted on Verizon because it's not the internet we're discussing here. It's delivering a service to the local ISP network subscribers.

The ISP is allowing Netflix to bring caches and servers to their interconnect so that the ISP can meet the demands of its users who are requesting that data.

When should an ISP give out "free" things? When the quality of service for their customers requests depends on it.

It's that simple: Customers request data, and ISPs have an obligation to deliver that data once it arrives at their local network.

What you call "Free hosting" and "free upgrades", I call "upgrades for requested service paid for by my monthly bill".

Because when I request data, and that data requires infrastructure to reach me adequately, then I am paying for that infrastructure by virtue of my monthly bill, and my decision to use part of my capped bandwidth on that service.

Remember: residential internet is capped because "users must pay for their use, and infrastructure can't handle too much demand so we need to charge users to upgrade according to their usage pattern". So therefore, I'm paying for that Netflix interconnect, it's not free, I pay for it, because I pay for 300GB of data a month and all of the necessary infrastructure to deliver it!

Re:Netflix responds to Verizon by msandford on Tuesday June 10, 2014 @11:39AM (#7873157)
Econ 101: all things being equal cheaper is better than more expensive.

If I have a network and my customers use Netflix and aren't going to not use Netflix because I don't want them to, then part of my job is to ensure that my customers get the bandwidth I've promised them. (This isn't how it ACTUALLY works but how it's SUPPOSED to work)

As an ISP I have really rather large amounts of bandwidth in the last-mile at least in aggregate. Let's say that I can reasonably offer 20Mbps to each of my 1mm customers from my POPs to their houses. That's 20Tbps in aggregate. I probably don't have 20Tbps worth of back-haul from all my POPs to all the peering stations where I actually get the customers connected to the internet at large.

If network traffic is all long-tailed and the biggest use of bandwidth is 1% of capacity and it goes down from there "free hosting" doesn't make sense. But what if traffic to one company makes up 30% (or 80%) of total back-haul utilization at peak hours? I'm spending a lot of capacity for a single destination.

Now what if that place offered to create a magical wormhole from their servers to my customers at my POPs such that a large fraction -- say 80% -- of my customer's traffic from/to them never hits my back-haul it just appears out of thin air at the POP. Would I consider this a good deal? Depends on how much I pay for the back-haul versus how much electricity they're going to use at the POP. All-in I would suspect that it is a good deal thinking in these terms.

That's precisely what the Netflix appliance is. It's a way to give the customers Netflix without costing any bandwidth on the back-haul network that ISPs operate.

The reason that ISPs aren't all jumping right on this (despite the likely cost-savings) is that they view Netflix as the competition and they're prefer an adversarial relationship that hopefully puts Netflix out of business rather than cooperating and in their minds speeding their own demise.

So the rule of thumb you're looking for is that ISPs should start giving out free hosting when it's cheaper to give free hosting than to pay for the back-haul.

Re:Netflix responds to Verizon by devrelm on Tuesday June 10, 2014 @12:08PM (#7873373)
> rather than cooperating and in their minds speeding their own demise

It makes sense, then, that one of the few large cable companies that uses Open Connect is Cablevision, who's CEO is on the record saying "Ultimately over the long term I think that the whole video product is eventually going to go to the Internet."[1]

He's one of a few that has accepted the eventual fate of cable TV, and so his business decisions aren't biased by a need to delay the inevitable.

[1]: http://online.wsj.com/news/articles/SB1000142412788732342060...

Re:Netflix responds to Verizon by hga on Tuesday June 10, 2014 @12:28PM (#7873515)
That's a nice theory, but the impression I get from the (extra biased against last mile ISPs) DSLReports is that Comcast is continually spreading usage caps and plans to make them nationwide in 5 years, e.g. http://www.dslreports.com/shownews/128987

Lots more with this search: http://www.dslreports.com/nsearch?cat=news&q=comcast%20caps

Re:Netflix responds to Verizon by Xylakant on Tuesday June 10, 2014 @01:44PM (#7874084)
There is no inherent problem with usage capped plans, as long as the price is fair. If you'd like an uncapped plan, pay more.

The problem is that the last-mile providers try to extract money from netflix for a service that the consumer already paid for (deliver those video bytes)

Re:Netflix responds to Verizon by hga on Tuesday June 10, 2014 @02:10PM (#7874297)
You don't see a problem with e.g. Comcast implicitly charging the consumer extra for using Netflix (by exceeding the cap and paying by the drink afterwords) and not charging anything "extra" for using Comcast's video services?

There is an argument there, in that it costs more real money to deliver video bits the a la carte Netflix way than the cableco broadcast way, but I believe the conflict of interest remains an issue, and the prices I see for exceeding these rather small caps don't strike me as fair.

(Albeit AT&T's, the only choice I have aside from a not so reliable WISP, are particularly ridiculous: 150 GiB/month including I'm not sure what overhead for a continually rising price 2nd from the bottom "up to" 1.5 Mbs down/300+ Kbs up line that currently costs $36/month, each additional 50 GiB costs $10. We'd get a faster line so my father could watch video, at $5/month extra each increment, if the cap wasn't so low and the overages so high.).

Re:Netflix responds to Verizon by Xylakant on Wednesday June 11, 2014 @06:17AM (#7877189)
That's not a capped plan. A capped plan charges you more if you exceed a specific bandwidth threshold - no matter what you spend the bits on. As long as Netflix, Comcast PPV, Youtube and my private cat videos get charged the same price - I'm fine with that.

The issue you're pointing out is the lack of net neutrality - but that is orthogonal to the pricing.

Re:Netflix responds to Verizon by devrelm on Wednesday June 11, 2014 @10:02AM (#7878016)
Comcast, yes. Cablevision, no. I was speaking of the latter.
Re:Netflix responds to Verizon by hga on Wednesday June 11, 2014 @11:09AM (#7878378)
Oops!

So you were, sorry about that.

Re:Netflix responds to Verizon by Xylakant on Tuesday June 10, 2014 @11:34AM (#7873115)
When it's cheaper for them to host the caches a service offers than increasing their peering bandwidth. That's a fairly simple exercise for controlling.
Re:Netflix responds to Verizon by nitrogen on Tuesday June 10, 2014 @11:30AM (#7873092)
When the space and electricity for the hosting is cheaper than the transit costs they would otherwise incur.
Re:Netflix responds to Verizon by danudey on Tuesday June 10, 2014 @11:42AM (#7873176)
It's not that they're providing free hosting. Netflix is providing hardware that ISPs can install in their own network locations (which they typically have plenty of). In exchange, their customers get better quality and ISPs don't spend their uplinks on Netflix content. It's pretty win-win for everyone.
Re:Netflix responds to Verizon by mmusson on Tuesday June 10, 2014 @12:13PM (#7873410)
Your question is backwards. ISPs can choose this option to save themselves money.

I suspect that the real reason that ISPs like Verizon are resisting, is that with open connect in place there would be nowhere left to hide and blame the internal ISP bandwidth problems.

Re:Netflix responds to Verizon by pkulak on Tuesday June 10, 2014 @11:31AM (#7873100)
It's not hosting. These devices are not available to the open internet, only customers of the ISP who's network they are on.

And I'd say the threshold is the point at which you are no longer to deliver the content by other means.

Re:Netflix responds to Verizon by unreal37 on Tuesday June 10, 2014 @11:42AM (#7873175)
First, you'd have to buy and build a server for each ISP containing that content and support it when things go wrong. Next, it would have to be cheaper for the ISP to host your server on their network than for them to upgrade their connections to the backbone to handle traffic to your site.

If those two conditions are true, I am sure ISPs will accept your offer.

Re:Netflix responds to Verizon by logfromblammo on Tuesday June 10, 2014 @11:37AM (#7873143)
Possibly because your homepage does not drive a third of Internet traffic, both from within the ISPs network and from without.

The Internet is a collection of public and private networks. When it costs more to upgrade the linkages between your network and everyone else's than to host a server inside it, that is when the ISP should pay to support a local resource.

You're comparing apples and oranges, really. If your website ever reaches the point where traffic starts to saturate an ISP's connections, I'm sure they would be willing to discuss a local CDN resource with you, too. Whether they offer to pay for that or charge you for it depends largely upon how stupid and/or greedy their management is.

Re:Netflix responds to Verizon by goatforce5 on Tuesday June 10, 2014 @11:27AM (#7873070)
As I understand it, this is similar to one of the ways Akamai builds out it's network:

http://www.akamai.com/html/partners/network_partner.html

Re:Netflix responds to Verizon by mcintyre1994 on Tuesday June 10, 2014 @12:24PM (#7873497)
From your phrasing you work at Netflix right? Is it possible to get a full list of your Open Connect partners in a marketplace? In the competitive UK marketplace this could pretty easily be the difference in a purchasing decision for me.
Re:Netflix responds to Verizon by kordless on Tuesday June 10, 2014 @12:14PM (#7873420)
Do you guys use IPv6 at all with your server/client connections?
Re:Netflix responds to Verizon by TheCapn on Tuesday June 10, 2014 @10:14AM (#7872573)
www.netflix.com/openconnect
Re:Netflix responds to Verizon by damieng on Tuesday June 10, 2014 @10:48AM (#7872800)
They also offer free hardware that caches and serves up the most popular content automagically.

[)amien