Forgot your password?
typodupeerror
The Internet Communications Movies Television Your Rights Online

Why You'll Pay For Netflix — Even If You Don't Subscribe To Netflix 292

Posted by Soulskill
from the enforced-infrastructure-enhancement dept.
Velcroman1 writes "At the 2013 Consumer Electronics Show, Netflix announced Super HD, an immersive theatrical video format that looks more lifelike than any Web stream, even competing with Blu-Ray discs. But there's a costly catch. To watch the high-definition, 1080p movies when they debut later this year, you'll need a specific Internet Service Provider. Those on Cablevision or Google Fiber are in; those served by Time Warner or a host of smaller providers will be out of luck. But regardless of whether you subscribe to Netflix, you may end up paying for it, said Fred Campbell, a former FCC legal adviser who now heads The Communications Liberty & Innovation Project think tank. 'Instead of raising the price of its own service to cover the additional costs, Netflix wants to offload its additional costs onto all Internet consumers,' Campbell said. 'That's good for Netflix and bad for everyone else in the Internet economy.'"
This discussion has been archived. No new comments can be posted.

Why You'll Pay For Netflix — Even If You Don't Subscribe To Netflix

Comments Filter:
  • by Anonymous Coward on Tuesday January 22, 2013 @05:24PM (#42661355)

    Yes, they want to upgrade for fast low latency connections, and the people with Pentium IV machines will not see the benefit. Just like the people who were paying for dialup didn't see the benefit of pipe-size increases that were in place to accommodate DSL.

    But while net neutrality doesn't allow them to charge for "Netflix" (which is as it should be), there is nothing stopping them from charging extra for the awesome bandwidth that will get to the customers, and to use that extra charge to pay for the infrastructure upgrades. These upgrades during low-Netflix-use times may benefit others.

    Right now I pay $120 a month for 25Mbits, no cap. My friends pay $80 a month for 20 Mbits with a 250GB cap. So they already have everything they need in place already. Watching 10 movies a month and doing nothing else, you would blow through the cap and need the upgrade. Article's author is a troll.

  • Infrastructure (Score:5, Insightful)

    by Hatta (162192) on Tuesday January 22, 2013 @05:28PM (#42661399) Journal

    Netflix is encouraging my ISP to build out infrastructure, and I'm supposed to be upset that I have to pay for it? More bandwidth is good for everyone, and can be used for anything, not just Netflix. This is unequivocally good.

  • Yawn (Score:0, Insightful)

    by Anonymous Coward on Tuesday January 22, 2013 @05:28PM (#42661419)
    I am not even interested in watching HD, why do they think I'll care about this? Most people I know are pretty happy streaming onto their laptop something that looks pretty low res. I see plenty of details on zombies already.
  • by Anonymous Coward on Tuesday January 22, 2013 @05:28PM (#42661421)
    This is more neo-con style stories that want to allow ISPs to charge as they see fit.
    Total BS. It should not even be on this site.
  • Re:Infrastructure (Score:4, Insightful)

    by TheNinjaroach (878876) on Tuesday January 22, 2013 @05:31PM (#42661449)
    Meh, I'm happy with my 10 mbit download connection. It's my crappy upload speed that irritates the heck out of me and Netflix isn't doing squat for that.
  • by Anonymous Coward on Tuesday January 22, 2013 @05:32PM (#42661451)

    All of these cable companies want to charge Netflix for using their bandwidth. Netflix has responded by saying, essentially, that to use their highest bandwidth services on your network, you'll have to let us connect directly to your network. Netflix will still provide all of the servers and other equipment. Comcast, Time Warner, and whoever else only need to give them a location to tie into their network. I, as a customer, am already paying Comcast, Time Warner, and whoever else for that bandwidth. There is no extra cost for anyone else, because no extra infrastructure is required.

  • by 140Mandak262Jamuna (970587) on Tuesday January 22, 2013 @05:32PM (#42661459) Journal
    Basically they are arguing, the new service from Netflix requires lots of investments and upgrades to the network, and they will pass it on to all the customers because FCC prohibits charging more for Netflix customers alone, even if they are the only ones benefiting by these upgrades.

    To me it is a stretch. The ISPs are not fools. If the Netflix customers want special high speed access, they will be forced to cough extra cash for that privilege. And that money will upgrade the network for all customers. They may not be able to tack on a "fee for being a netflix customer". But they surely will tack on a fee for "50 Mbps service with guaranteed network latency of less than 200 millisecond" or whatever is the technical spec.

  • I call bullshit. (Score:3, Insightful)

    by Anonymous Coward on Tuesday January 22, 2013 @05:33PM (#42661465)

    This is the same old story, cable companies want content providers to pay them to reach their customers.

  • Re:Infrastructure (Score:5, Insightful)

    by Anonymous Coward on Tuesday January 22, 2013 @05:35PM (#42661491)
    Yes, you should be upset. Your ISP should be making infrastructure upgrades and paying for it from the billions in profit that they have made by overcharging you for the crap service you already receive. Instead, you somehow think it's ok for them to make you pay for them to upgrade their service when they should have been doing it all along.
  • by thule (9041) on Tuesday January 22, 2013 @05:38PM (#42661551) Homepage
    I remember reading an article years ago about how Yahoo! only payed for half of their transit costs. Since they were/are such a huge content provider, many ISP's wanted to peer with them. It makes complete sense to connect content to eyeballs in the most cost effective way possible. This has been going on for ages. This is now the Internet works, reducing transit costs by peering is nothing new.

    The only difference in this case is that Netflix doesn't want to push their super HD content over their transit links. I would expect that ISP's don't want it either. The solution is a win-win for ISP's, especially ones that have a lot of Netflix customers.

    This has always been my point with net neutrality. Net neutrality is worried about traffic shaping, etc, but I could prefer one VoIP provider over another by making sure the peering connection to their network is low latency compared to the transit link. I'm not shaping the competing traffic or blocking it.
  • Net Neutrality (Score:5, Insightful)

    by KPU (118762) on Tuesday January 22, 2013 @05:40PM (#42661583) Homepage

    So basically this is a Faux News article arguing against net neutrality.

  • by jedidiah (1196) on Tuesday January 22, 2013 @05:40PM (#42661593) Homepage

    Robber Baron shills should be pointed out for what they are. That activity is neither pointless nor mindless.

    Time Warner abuses the customer and acts like they are above the market and then whine when someone else decides to treat their customer better.

    Whatever problems TWC has are all self inflicted.

  • Re:Infrastructure (Score:4, Insightful)

    by BLToday (1777712) on Tuesday January 22, 2013 @05:52PM (#42661757)

    I need the upload speed so I can watch some Slingbox while on my lunch break at my desk.

  • by Todd Knarr (15451) on Tuesday January 22, 2013 @05:52PM (#42661761) Homepage

    What's going on here isn't about Netflix, it's about bandwidth. It boils down to: the Netflix HD service requires a lot of bandwidth to the end user, Netflix is setting it up so the ISPs have access to the high-bandwidth external connection needed to deliver the streams to their networks, now the ISPs are trying to figure out how to allocate costs for the bandwidth on their networks to deliver those streams to the users. And right now I don't see a problem. My ISP has no regulatory problem whatsoever charging different prices based on the bandwidth available to me. So, do that. If the user wants the extra bandwidth needed to deliver the HD video stream and still be able to do anything else without mucking up both, he's going to have to buy the higher-bandwidth Premium service instead of Standard. If he doesn't, he's going to have to live with HD streams that stutter and jump and Web sites that load slowly or fail to load completely while the video's streaming because the ISP's throttling his traffic to the rate he's paying for. End of cost-allocation problem.

    And I'd note that it's not Netflix demanding bandwidth on the ISP's network. It's the ISP's own users asking for the bandwidth. Netflix doesn't send a single packet to an ISP until a user of that ISP connects to Netflix and asks them to start sending data. And the ISP has explicitly sold their service to their users as a way to do that, to access sites and services on the Internet. That's why they're called Internet Service Providers: the service they offer is providing access to the Internet. If their users are requesting more data than the ISP's network can handle, seems to me that's an issue between the ISP and it's customers. I'm sure the ISP would rather side-step the issue, but I don't see where that obliges anybody else to help them. If I'm ordering things delivered to the apartment complex I live in and the complex has a gate that the delivery trucks won't fit through, that's not the delivery company's or the store's problem. That's between me and the complex to deal with.

  • ^ THIS! (Score:5, Insightful)

    by j-turkey (187775) on Tuesday January 22, 2013 @05:58PM (#42661837) Homepage

    Yes. I'm surprised that nobody else has read into this. All Netflix is doing is localizing their content in a small, 4U appliance inside of the ISP's.

    From what I can tell is that this has potential to be a win for everyone. As you say, this is a win for ISP's, as it cuts down on internet traffic at their peering points - where things tend to be the most expensive - it keeps traffic inside of their network. This is also a win for the consumer, as it can deliver higher quality video. This is also a win for Netflix, because they can lower their internet bandwidth costs by moving their content to these localized (or regionalized, as the case may be) appliances once and serve streaming content to all customers on an ISP's network.

    ...or perhaps I'm missing something. Feel free to educate me if I am.

  • by Sir_Eptishous (873977) on Tuesday January 22, 2013 @06:04PM (#42661913) Homepage
    As soon as I saw that the author of the article is "Fred Campbell, a former FCC legal adviser who now heads The Communications Liberty & Innovation Project think tank" I knew it was going to be some kooky tea-bagger/liberty-for-corporations-slavery-for-customers bullshit [driveinnovation.org].

    Anytime you see the words Liberty or Freedom thrown around by a TeleCom "think-tank" you can expect the usual "were here to fuck the consumer at all costs" propaganda.
  • by steppin_razor_LA (236684) on Tuesday January 22, 2013 @06:04PM (#42661921) Homepage Journal

    The article paints the picture that Netflix should be paying extra money and charging its subscribers extra money to deliver high speed internet to them and that antiquated network neutrality restrictions make the whole thing unfair.

    Netflix is now going to be able to offer even higher bandwidth services. In order to take advantage of them, you need a fast pipe (direct to your house and for your ISP to have good connections to the bandwidth sources) this means your ISP may need to cough up some more $s in order to deliver you the content that they are charging you for.

    So let's review:
    Netflix is paying for bandwidth in order to be able to provide the streams.
    Consumers are paying for bandwidth in order to receive the streams.

    If you don't purchase sufficient bandwidth from your ISP, then you can get the shiny new streams and you may need to give more money to your ISP if you want the highest quality service.

    If you did purchase sufficient bandwidth from your ISP, but they have been enjoying being able to charge you for premium bandwidth (8mb/s down woot!) but they haven't been investing in the upstream bandwidth/peering/etc in order to deliver, then it's time for them to spend some more money on the infrastructure that your bandwidth is for.

    The fact that 30% of the traffic is Netflix doesn't make it a Netflix problem. Netflix pays for its bandwidth. I want to stream Netflix so I spend extra $s to buy a bigger pipe. The only problem I see is the carriers raking in huge profits without investing in the infrastructure required.

  • by jeffmeden (135043) on Tuesday January 22, 2013 @06:08PM (#42661959) Homepage Journal

    But while net neutrality doesn't allow them to charge for "Netflix" (which is as it should be), there is nothing stopping them from charging extra for the awesome bandwidth that will get to the customers, and to use that extra charge to pay for the infrastructure upgrades. These upgrades during low-Netflix-use times may benefit others.

    Their point is that, from a market perspective, a service provider "buying in" to a service like this through upgrades exclusive to Netflix (probably in the way of CDN servers/bandwidth) don't pass that cost on to just the consumers using Netflix. And while there might be some benefit to increased bandwith between you and the CDN hub, there is no guarantee that it will do you any good should you be interested in content that isn't on that CDN. The internet isn't a flat ocean of content that you pay for a little pipe full of, placement matters bigtime when it comes to overall throughput and latency.

    Not too long ago Netflix showed a discrepancy between ISPs breaking down somewhere at the 1.8/2.0 megabit realm. Despite service providers almost univerally offering faster "guaranteed" rates than that (3 MBit to 6Mbit, which can be demonstrated with a *regional* bandwidth test) the bandwidth to the Netflix content was markedly lower. Why? Not all 3Mbit/6Mbit/25Mbit pipes are created equal.

  • Re:Infrastructure (Score:2, Insightful)

    by ShanghaiBill (739463) * on Tuesday January 22, 2013 @06:12PM (#42662013)

    Netflix is encouraging my ISP to build out infrastructure

    No they are not.

    More bandwidth is good for everyone, and can be used for anything, not just Netflix.

    Please RTFA. That is NOT what this is about. This is about Netflix insisting that ISPs build a dedicated high speed pipe only between the ISP and Netflix. It benefits only Netflix customers.

  • by king neckbeard (1801738) on Tuesday January 22, 2013 @06:20PM (#42662087)
    It's a bullshit argument that's been debunked a hundred times before being stated by a 'think tank' that is funded by interested parties. The headline might as well be "Major ISPs bitch about Netflix using it's influence to force them to play fair, make up bullshit about paying more."

    On the other hand, there's a good chance you are actually paying for ESPN even if you don't have cable or sattelite, since they add a fee to affiliated ISPs.
  • by aaarrrgggh (9205) on Tuesday January 22, 2013 @06:24PM (#42662135)

    The internet isn't a flat ocean of content that you pay for a little pipe full of, placement matters bigtime when it comes to overall throughput and latency.

    Problem is that is what the ISPs have been selling. It screwed up the peering model already, and next it will impact the ISPs.

    The issue here is that any ISP would rather be able to keep charging the same rate for the same service (or increasing the price each year), rather than get the same fee for providing ever-increasing bandwidth. As the infrastructure is paid off, the providers should either reinvest or drop rates; they prefer to do neither.

  • Re:Infrastructure (Score:4, Insightful)

    by MangoCats (2757129) on Tuesday January 22, 2013 @06:29PM (#42662195)

    But, without customers bitching about substandard service and pointing to carriers that are doing better, there's absolutely no business sense in building out killer bandwidth for everyone when only 1% of customers even notice.

    As everyone else is saying, Netflix is more than a 1% customer visibility... when Netflix users get pissed, it'll get fixed.

  • Re:Infrastructure (Score:5, Insightful)

    by DragonWriter (970822) on Tuesday January 22, 2013 @06:34PM (#42662267)

    Please RTFA. That is NOT what this is about. This is about Netflix insisting that ISPs build a dedicated high speed pipe only between the ISP and Netflix. It benefits only Netflix customers.

    Since Netflix traffic is about 1/3 of peak downstream traffic, and by far the biggest single source of traffic on the internet, moving Netflix traffic on to its own dedicated pipe (and caching much Netflix content locally at the ISP so that there won't be back-haul traffic at all) benefits everyone getting service from the ISP. And Netflix isn't insisting ISPs do it, it is providing incentives for them to do it in the form of making exclusive content available to those ISPs customers -- content that takes a lot more bandwidth, and which -- given the enormous bandwidth load Netflix traffic already consumes -- neither the ISP nor Netflix could afford to have available for those customers without the CDN.

  • Re:Infrastructure (Score:4, Insightful)

    by Guspaz (556486) on Tuesday January 22, 2013 @06:41PM (#42662349) Homepage

    This doesn't only help Netflix. Any bandwidth your ISP is sending through the Netflix caching box on their network or through a peering connection is bandwidth they aren't sending through paid transit links. ISP saves money, reduces load, customers benefit even if they aren't Netflix subscribers.

  • Re:Yawn (Score:3, Insightful)

    by cayenne8 (626475) on Tuesday January 22, 2013 @06:48PM (#42662401) Homepage Journal

    I can't believe someone on slashdot would watch the show that tries and makes fun of our person type, badly I may add. Not trolling, it's just a horrible, unfunny, and poorly written/researched show.

    Actually, I think it is one of the best written and funniest comedies on TV. Aside from Family Guy, it is about the only network television show I bother to watch.

    And geez man, if you can't laugh at yourself....well, download some materials and read up on having a sense of humor. It helps when interacting with other humans, especially if you can laugh at yourself a bit.

  • Re:Net Neutrality (Score:5, Insightful)

    by damienl451 (841528) on Tuesday January 22, 2013 @06:54PM (#42662469)

    The author is a shining example of all that is wrong with lobbying and the regulatory process in the developed world. According to his bio on the website, he was "Wireless Bureau Chief" and "Wireless Legal Advisor" at the FCC. So he was responsible for developing and implementing policies that directly impact wireless telecommunication companies. Then, in 2008, he resigned and immediately became CEO of a trade organisation representing the interests of... wireless telecommunication companies. And I mean "immediately" as in there is no gap whatsoever in his resumé. According to his LinkedIn, he resigned in August 2008 and began working for the other side that very same month (http://www.linkedin.com/pub/fred-campbell/11/524/862).

    Now, I don't know Fred Campbell and I'm not suggesting that he did not always act in a professional manner. But is it not disturbing that an industry would be allowed to recruit high-ranking government officials whose daily decisions could have great impact on their profitability? This gives FCC staffers very bad incentives, as you might not want to alienate the people who can give you your next, much more lucrative, job. Why do we turn a blind eye to the blatant conflicts of interests that it creates. And it is pervasive in all heavily regulated areas (another example from the FCC: Meredith Attwell Baker). The revolving door is an all too common reality and we're doing nothing to stop it.

  • by Anonymous Coward on Tuesday January 22, 2013 @06:57PM (#42662513)

    >Their point is that, from a market perspective, a service provider "buying in" to a service like this through upgrades exclusive to Netflix (probably in the way of CDN servers/bandwidth) don't pass that cost on to just the consumers using Netflix.

    Yes, that is their point, and the grandparent's point is "that's bullshit." They have a mechanism in place to charge subscribers by bandwidth. They are buying "content access" they can serve to dramatically increase the amount of bandwidth their subscribers pay for. If your ISP gets another $40 a month for the bandwidth to enjoy HD moves as often as you enjoy SD movies, then the consumers that are using it are paying for it.

    No it's not precise to the penny, some of Grandma's ISP fees may be going for this, but some of my fees have been subsidizing her unprofitable dialup connection for years. But then, some of your text messaging fees are paying for 911 service that you may have never used. Some of the cost of your voice minutes goes into handset development for handsets you don't want to buy. At Mel's diner my dinner tab includes the cost of ketchup that other diners use, and I HATE KETCHUP!

    The article writer, and the industries for which he shills are greedy crybabies. Nothing more.

  • by RatherBeAnonymous (1812866) on Tuesday January 22, 2013 @07:13PM (#42662657)

    Look, this article is just another BS anti-net neutrality argument showing how the poor internet carriers can't afford to support rich Netflix's content. Powerful Netlix is strong arming the little Internet providers (like, ahem, Time Warner) into carrying all of that expensive streaming video and cutting off ISPs who won't play ball.

    But the whole article is BS, and this is why: There is no buy in. No one is getting cut off.

    According to TFA, Netflix is not forcing any ISP to carry this traffic and they are not charging any ISPs for the privilege. Netflix is providing local caching servers to minimize traffic across the national backbones. This will save Netflix money and save the ISPs money because local traffic is cheaper than backbone traffic. If Netflix really wanted to stick it to the ISPs, they could just turn on Super HD for all subscribers and really rack up the bills. Netflix is being downright polite with this. At best, Super HD will be a minor competitive advantage for a handful of ISPs who have the servers.

  • by Reverand Dave (1959652) on Tuesday January 22, 2013 @07:17PM (#42662691)
    Best post in the thread so far hands down.

    The simple fact is that if the ISP's would re-invest into their infrastructure they would be doing everyone a great service (themselves included), but instead they seem to be pissing away the profits and doing nothing really for their customers other than jacking up the prices for the same basic service. Of course there is absolutely zero incentive for them to do so in most markets since most have a utility style monopoly.
  • Re:Infrastructure (Score:3, Insightful)

    by im_thatoneguy (819432) on Tuesday January 22, 2013 @07:19PM (#42662701)

    Netflix is encouraging my ISP to build out infrastructure, and I'm supposed to be upset that I have to pay for it? More bandwidth is good for everyone, and can be used for anything, not just Netflix. This is unequivocally good.

    No this is BAD. They aren't "building out infrastructure" they're asking for special servers and QOS packet prioritization. Remember when Netflix was saying that the ISPs would give their own video priority over Netflix? Remember how we all got up in arms over how wrong that was? That's what Netflix is trying to get the ISPs to do *for them*.

    So if instead of Netflix you watch Amazon Video you won't get any infrastructure improvement. Now if Netflix was willing to pay to colocate servers at the ISP's switches in order to reduce latency that would be fine. They could pay a nominal fee to Comcast and pass that cost along to the customer. Instead they're saying to Comcast "you need to install these servers in your switch-room and we aren't going to pay you for the privilege".

  • by grcumb (781340) on Tuesday January 22, 2013 @10:37PM (#42664701) Homepage Journal

    Look, this article is just another BS anti-net neutrality argument showing how the poor internet carriers can't afford to support rich Netflix's content. Powerful Netlix is strong arming the little Internet providers (like, ahem, Time Warner) into carrying all of that expensive streaming video and cutting off ISPs who won't play ball.

    It's worse than that. The language in that spiel is so loaded it's practically impossible even to figure out what the fuck the man is complaining about. I kept reading it, hoping that at some point the guy's argument would make even the slightest bit of sense, but every single descriptive element of the article (and I use that term loosely) was so charged with invective that he wasn't even able to make his own case.

    The entire piece is just a poorly composed diatribe without any logical basis whatsoever. Honestly, if this is how the larger carriers choose to defend themselves, they deserve to lose.

Administration: An ingenious abstraction in politics, designed to receive the kicks and cuffs due to the premier or president. -- Ambrose Bierce

Working...