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

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  • by Anonymous Coward on Tuesday January 22, 2013 @04:24PM (#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.

    • by jeffmeden (135043) on Tuesday January 22, 2013 @05:08PM (#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.

      • by aaarrrgggh (9205) on Tuesday January 22, 2013 @05:24PM (#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.

        • by Reverand Dave (1959652) on Tuesday January 22, 2013 @06:17PM (#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.
          • by b4dc0d3r (1268512) on Wednesday January 23, 2013 @01:14AM (#42666305)

            I lived on my street, in the next to last house built, with no option for cable at all. DSL sure, but there was no cable on my side, and no plans to build it.

            I called, I chatted, I mail-bombed the board and executives with a copy/paste chat session which went so horribly wrong I would not have bought the company's services if it had been available the next day.

            I saw a cable truck on my side of the street, 4 years after the last house was built. Nothing but satellite dishes on this side. I got DSL, which was re-branded AT&T two months in, and I was furious, but I trusted satellite less.

            I got the $20/no naked DSL for 4 years, and finally upgraded to a faster speed. The cable co can go fuck themselves, which is exactly what they have been doing. They didn't call me to let me know it was available - they sent the same flier they have been sending for 4 years, when it has not been available.

            I gave the co. my phone number, a very pleasant woman called me after my mail-bomb and apologized that they didn't have service here, and sorry that the representative took 30 minutes to not figure that out. So they have me as a lead. A simple call and some negotiation on price as someone who raised awareness of failures in their process, and I'd be a happy customer.

            Still on DSL. Cable co can't be bothered with me, apparently. Or with informing customers that a cable has been laid and service is available.

            Doing nothing for their non-customers, and would-be customers, despite having it pointed out to them.

            Zero incentive indeed, even after having put in the cost. Sending someone out to knock on my door would have given them years of continuous service upgrades. Guess they don't care.

      • by Anonymous Coward on Tuesday January 22, 2013 @05:57PM (#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 @06:13PM (#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 grcumb (781340) on Tuesday January 22, 2013 @09:37PM (#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.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      In Canada, you can get 250 MBit down (15 up) with a 1TB cap for $120. This is without netflix having a direct influence. The author is not just a troll, he's also an idiot.

    • by Synerg1y (2169962)
      With healthy competition, we wouldn't be having this discussion, ISPs would happily shoulder the cost to increase their customer base... wtf happened???
  • Infrastructure (Score:5, Insightful)

    by Hatta (162192) on Tuesday January 22, 2013 @04:28PM (#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.

    • Re:Infrastructure (Score:4, Insightful)

      by TheNinjaroach (878876) on Tuesday January 22, 2013 @04:31PM (#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.
    • Re:Infrastructure (Score:5, Insightful)

      by Anonymous Coward on Tuesday January 22, 2013 @04:35PM (#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.
      • Re:Infrastructure (Score:4, Insightful)

        by MangoCats (2757129) on Tuesday January 22, 2013 @05:29PM (#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.

    • More companies should do stuff like this. This is ultimately the solution.

      If you want SuperHD rivaling or beating BlueRay then you better upgrade your Internet.

    • by Chuckstar (799005)

      Netflix is encouraging your ISP to build out infrastructure that only helps Netflix. It's not enough for your ISP to have nice high bandwidth. They also need to peer with Netflix at facilities where Netflix specifies the peering arrangement.

      • Re:Infrastructure (Score:4, Insightful)

        by Guspaz (556486) on Tuesday January 22, 2013 @05:41PM (#42662349)

        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: (Score:2, Insightful)

      by ShanghaiBill (739463) *

      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.

      • It is my understanding that Netflix will provide the server(s) and the bandwidth from Netflix to the ISP. This is basically like any other content delivery network (Akamai, for instance).

        The ISP may need to beef up the connection to their subscribers, but that is useful for all traffic not just Netflix.

      • Re:Infrastructure (Score:5, Insightful)

        by DragonWriter (970822) on Tuesday January 22, 2013 @05:34PM (#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.

    • by PRMan (959735)

      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, they are getting your ISP to pay for a Netflix-specific CDN like Akamai, but only for Netflix movies. Still, it IS good, because that means that half of your bandwidth congestion on your peering provider should disappear overnight.

    • Re: (Score:3, Insightful)

      by im_thatoneguy (819432)

      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 IS

      • They're not asking for special servers. They're giving them away. How you got it backwards is beyond me.

        To quote directly from the OpenConnect Appliance Deployment Guide [llnwd.net] (page 11):

        What does the [caching] appliance cost my organization?
        The appliances (and any necessary replacements) are provided to participating ISPs free of charge when used within the terms of the license agreement.

        OpenConnect is a CDN for Netflix content. In joining it, Netflix offers to give the ISPs the caching servers they'll need to handle the CDN on their end, with the ISPs only having to foot the hosting costs associated with the servers. In exchange, a single one of these servers can displace the need for 70-90% of the traffic Netfli

  • by Anonymous Coward on Tuesday January 22, 2013 @04:28PM (#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.
  • by Anonymous Coward on Tuesday January 22, 2013 @04:32PM (#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.

    • The cable companies want this revenue for themselves. And make no mistake: multiple concurrent streams will start to crater their infrastructure. The more you buy from non-CDN networks, the more dicey it will get. They'll try to upgrade you to an advanced tier of service, then show you what kind of "deal" they can offer you instead.

      We've seen this sort of thing plenty of times before. Video on demand is kind of ok, but it's compressed like crazy. If you think compresses kinda-nice HD is going to suck the ai

  • by 140Mandak262Jamuna (970587) on Tuesday January 22, 2013 @04:32PM (#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.

    • by hawguy (1600213)

      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 thought Netflix was agreeing to deliver the content to the peering point of the ISP's choice - the only cost to the ISP is a port on their border gateway and a cheap peering interconnect.

      • by vlm (69642)

        I thought Netflix was agreeing to deliver the content to the peering point of the ISP's choice - the only cost to the ISP is a port on their border gateway and a cheap peering interconnect.

        I can't be bothered to find out, but I assumed this was part of the peering dance that has been going on for two decades or whatever between all players on the internet.

        Basically the network engineering dept knows its universally a win to peer for "free" as much as possible with as many other people as possible rather than pay for transit. However the MBAs on both sides of a peering arrangement love to dance around with daydreams of bonuses in their heads of getting the other guy to purchase transit instea

        • by hawguy (1600213)

          I thought Netflix was agreeing to deliver the content to the peering point of the ISP's choice - the only cost to the ISP is a port on their border gateway and a cheap peering interconnect.

          I can't be bothered to find out, but I assumed this was part of the peering dance that has been going on for two decades or whatever between all players on the internet.

          Basically the network engineering dept knows its universally a win to peer for "free" as much as possible with as many other people as possible rather than pay for transit. However the MBAs on both sides of a peering arrangement love to dance around with daydreams of bonuses in their heads of getting the other guy to purchase transit instead of freely peer. So historically you've always had idiotic showdowns (slowdowns?) and dumb marketing tricks (we only peer with other tier 1 providers... whats a tier 1 provider? Well its anyone we either a) want to peer with or b) couldn't get to pay us for transit, that's the def of a tier 1 provider).

          So you can't be bothered to find out anything about what Netflix is asking, but you know that Netflix is asking ISP's to pay money?

          Here's a few more details:

          http://arstechnica.com/business/2013/01/timewarner-net-neutrality-foes-cry-foul-netflix-requirements-for-super-hd/ [arstechnica.com]

          Netflix isn't charging ISPs to be part of its private network, but the ISPs do have to meet a list of requirements. For example, the ISP must connect to the same peering locations as used by the Netflix network and establish connections of at least 10Gbps. By requiring the use of its own network, Multichannel News notes that "Netflix saves money on third-party CDN transit fees by connecting directly with ISPs.

          So it sounds like Netflix isn't asking for money, but stands to make some significant cost savings with little additional cost to the ISP.

          • by vlm (69642)

            So you can't be bothered to find out anything about what Netflix is asking, but you know that Netflix is asking ISP's to pay money?

            Uh thats pretty much the definition of the peering dance, try to "upsell" your free peers into purchasing transit from you. Its not Netflix asking for money its the ISPs asking netflix to pay the isp. After all, I pay my ISP for traffic, so some MBA thinks netflix should pay too.

          • by Guspaz (556486)

            Actually, the speed requirements (2 Gbps on a 10 Gbps port) only apply to private peering with Netflix. Public peering with Netflix has no bandwidth requirements; if you're on AMS-IX, for example, you can be doing 100 Mbps to Netflix and still benefit.

            In fact, you don't even have to directly peer with Netflix. Your transit provider could be peering with Netflix, and you'd still qualify as being on OpenConnect. That's how a lot of ISPs in Canada got on OpenConnect without taking any action.

            Netflix doesn't ca

      • by Chuckstar (799005)

        I read in a different article that it's a peering point of Netflix's choice. And peering equipment of Netflix's choice. Oh, and the ISP pays for maintaining Netflix's equipment at the peering point.

        Basically, Netflix is saying "we don't care if your network can handle the bandwidth, we'll only give your customer SuperHD if you'll set up your network our way". The right way to do it is for Netflix to set throughput and latency targets and say "if your ISP can provide x and y, you'll get SuperHD".

        • by hawguy (1600213)

          I read in a different article that it's a peering point of Netflix's choice. And peering equipment of Netflix's choice. Oh, and the ISP pays for maintaining Netflix's equipment at the peering point.

          This article quotes Netflix saying otherwise:

          http://arstechnica.com/business/2013/01/timewarner-net-neutrality-foes-cry-foul-netflix-requirements-for-super-hd/ [arstechnica.com]

          Netflix responded to Time Warner's accusation, telling Multichannel News that "Open Connect provides Netflix data at no cost to the location the ISP desires and doesn't seek preferential treatment.

          Basically, Netflix is saying "we don't care if your network can handle the bandwidth, we'll only give your customer SuperHD if you'll set up your network our way". The right way to do it is for Netflix to set throughput and latency targets and say "if your ISP can provide x and y, you'll get SuperHD".

          Well, I think they are saying "We're tired of paying internet transit costs to give your customers the content they are demanding - give us a 10Gig port to

    • Well said.

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

    by Anonymous Coward on Tuesday January 22, 2013 @04:33PM (#42661465)

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

    • by ak3ldama (554026)

      You see I've got this thing, and it's @#$!ing golden! I'm not just going to give it away!

      I hope that is remotely correct... lolz.

  • by nweaver (113078) on Tuesday January 22, 2013 @04:34PM (#42661479) Homepage

    The 1080p Netflix service is only available when the ISP allows Netflix to deploy CDN (Content Delivery Network) nodes in the ISP's network.

    Now true this is unfair to those ISPs who don't allow Netflix to deploy CDN nodes, but in general, CDNs save both the content provider and the ISP money: instead of traffic traversing the ISP's Internet connections, its served locally from the CDN nodes. So it acts to save the ISP money, not cost them. If 1080p videos are twice as large, but things are cached in the local network 75% of the time, the ISP sees substantial savings.

    The only reason a major ISP would not want a Netflix node is that they are worried about Netflix competing with their (non Internet) TV services.

    Overall, the Fox "article" is clear propaganda, written by and interviewing those who either, through ignorance or will, misunderstanding how CDNs operate.

    • by ffflala (793437)
      It also appears that this quote, reflected in the thread title, is inaccurate:

      By shifting its costs to ISPs, Netflix is distributing the costs of delivering its service across all Internet consumers.

      Even if the article analysis is correct, the costs would be passed not to *all* Internet consumers, but rather only those who use an ISP that has decided to peer with Netflix.

    • Ya no kidding (Score:5, Informative)

      by Sycraft-fu (314770) on Tuesday January 22, 2013 @04:56PM (#42661817)

      Akamai has done this kind of thing forever. When I worked at Network Operations for the university I work at, Akamai approached us. They wanted to install cache engines in our data center. They would provide us all the hardware, 3 fairly high end servers and a switch, as well as support for setting them up. All we had to do was put them in.

      Net result? About an immediate 5 mbps average drop in our traffic, more at peak times. This was back in like 2002, and we only had like 100 mbps of Internet total.

      It was all kinds of great. We had less network traffic, people got much faster videos, MS updates, and so on (Akamai is used by a lot of companies), and of course Akamai saves on bandwidth on their end. Everyone won, it was better service/less cost for all parties.

      • Re:Ya no kidding (Score:4, Informative)

        by cdrudge (68377) on Tuesday January 22, 2013 @05:01PM (#42661879) Homepage

        It's the same with Netflix. They give you one or more 4U servers with about 100TB of storage. The ISP just has to provide the 10g network connection and the electricity.

        And if you don't want to host their equipment, you can also get some of the benefit by using one of the dozen or so peering exchanges where they have equipment already setup.

    • ^ THIS! (Score:5, Insightful)

      by j-turkey (187775) on Tuesday January 22, 2013 @04:58PM (#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 kawabago (551139) on Tuesday January 22, 2013 @04:36PM (#42661507)
    That doesn't mean it's ever going to happen!
  • by thule (9041) on Tuesday January 22, 2013 @04:38PM (#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.
    • by h4rr4r (612664)

      You could, and no one is worried about that.

      Net neutrality is about you intentionally blocking stuff, not you offering better service on some providers via peering. Surely you can see the huge difference.

  • Net Neutrality (Score:5, Insightful)

    by KPU (118762) on Tuesday January 22, 2013 @04:40PM (#42661583) Homepage

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

    • by h4rr4r (612664)

      This is 100% of what this is.

      If netflix was not forcing ISPs to upgrade something else would. Maybe if ISPs would upgrade by themselves this would not be a problem.

      I bet Fox News does not complain about that evil socialist right of way that TWC and their ilk use.

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

      by damienl451 (841528) on Tuesday January 22, 2013 @05:54PM (#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 Attila Dimedici (1036002) on Tuesday January 22, 2013 @04:40PM (#42661589)
    ESPN already does this. You can only view the ESPN360 website if your ISP pays ESPN a fee for every one of its subscribers. It is a small fee and most ISPs have concluded that passing that fee along to all of their subscribers is worth it to keep those who would jump to another provider in order to get access to the ESPN360 website. ESPN claims that ESPN360 is a free website, since they get to hide the charge in your Internet bill (the ISP is not going to break it out because then the people who have no interest in ESPN would scream, but since it is so small most of them are completely unaware of it).
  • by ERJ (600451)
    Netflix just wants peering agreements. Assuming the service provider doesn't have to build out to the carrier hotel then the cost is minimal.
  • (or whatever bandwidth they are using for their HD-Movies).

    The Last Mile Cache [fredan.se] is the only open solution which has the possibilities to handle these amount of bandwidth!
  • After hearing ISPs argue against net neutrality for years, my feelings are best described by a few words from the famous Nelson Muntz:

    "HA HA"
  • I know that no-one RTFA's around here, but isn't it a bit much to simply quote the first couple of paragraphs of the article as the summary? Especially since the article is entirely opaque about why the ISPs will "have" to pay higher costs. It does a great job of beating the drum for it's chosen viewpoint, though.

    And people wonder why Old Media News Services are going extinct - what's the point of "news" that uniformative AND biased?
  • Existing HD titles already require 5Mbit/s (2.3GB/hour).
    Basically. SuperHD is exactly nothing new.

  • Because Netflix doesn't run on Ubuntu. Therefore Windows is more valuable in one aspect of the marketplace. Thus forcing people who would otherwise use Ubuntu to use Windows. This increases the costs to society of computing and makes the marketplace that much more less competitive.

    So... which argument is more BS?

    Although, it's completely unsupported it's actually pretty easy to get to work right now: http://www.omgubuntu.co.uk/2012/11/how-to-use-netflix-on-ubuntu [omgubuntu.co.uk]
    Please, Please, Please don't buy Netflix b

    • by jedidiah (1196)

      On the desktop, I can virtualize an environment for Netflix and it's still usable. Outside of the desktop, it's not clear that you would want to run Netflix on low profile HTPC kit.

      You are probably far better off with the $60 appliance and keeping both Flash and Silverlight away from your HTPC.

      That actually seems to be the case regardless of OS.

  • I mean, we're talking about Netflix, a company that seems to have about 0.0001 of available movies on their streaming service.

    Wanna watch "Speed Racer" the movie? Fuggetabout it. Wanna watch "Chronicle?" Fuggetabout it. Wanna watch "Source Code"? Fuggetabout it.. Wanna watch "The girl with the Dragon tattoo" (american version)? Fuggetabout it.

    In fact, if you can name a movie, it's almost guaranteed to NOT be on Netflix.So, what the heck are they offering on this new service? I mean, aside from "Breaking Bad

    • by E-Rock (84950)

      You seem to think that Netflix is choosing not to have those movies in its streaming service. I think Netflix would like to have every movie on their service.

      You need to be complaining about the media companies that own that content and how they either won't license at any cost, or would only license at an absurd fee to Netflix (and thus their customers).

  • Hasn't ESPN been doing the same thing for years with their streaming service?
  • by PPH (736903)

    ... does this mean they will be buying my postal carrier a faster truck?

    Latency might still be an issue. They usually park on my street and take an afternoon nap. I don't see that changing anytime soon.

  • by Todd Knarr (15451) on Tuesday January 22, 2013 @04:52PM (#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.

  • When I listen to music or watch movies with my Grado headphones on my Asus Xonar Essence STX and my Samsung wide screen high res monitor I am willing to pay for quality matching the hardware. I'm not willing to pay for subpar crap.

    The solution to expand the market beyond Megabox and bootleg is to offer high quality PREMIUM entertainment and market high quality audiophile and high end graphics cards and monitors. When people are willing to spend $200 on a sound card, and they own $1000+ worth of iTunes music

  • by sdsucks (1161899) on Tuesday January 22, 2013 @04:56PM (#42661811)

    News: Netflix is rolling out higher definition and higher bandwidth video qualities (similar to what is happening with most internet services).

    Not news: Higher bandwidth actually requires more bandwidth, so ISP's must upgrade infrastructure.

    Slashdot (apparently no better than Fox): You'll all pay more because of Netflix!!! Even if you don't use it!!!

    Me: WTF?

    Of course, when I saw TFA was on Foxnews.com, I realized what was really happening here.

  • To get certain channels of ESPN, you had to be a subscriber of certain providers. Those providers bundle the fees for the "enhanced" ESPN channels like ESPN3 into the fees whether or not you want it, have it as part of your plan, or ever watch it. Been going on since 2009.
  • by Nimey (114278) on Tuesday January 22, 2013 @04:59PM (#42661853) Homepage Journal

    Per Ars Technica [arstechnica.com], this thinktank's got a history of opposing Net Neutrality.

    Actually, read the Ars article. It's better quality than this paid hit piece. Did anyone notice that the final link in the summary goes to Fox Propaganda?

  • by Sir_Eptishous (873977) on Tuesday January 22, 2013 @05:04PM (#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 Ryanrule (1657199)

      Think tanks fall into the same category as countries when it come to names.

      For example, north Korea = Democratic People's Republic of Korea

      Well, they got one right. It is Korea.

  • by steppin_razor_LA (236684) on Tuesday January 22, 2013 @05:04PM (#42661921) 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.

  • "The Communications Liberty & Innovation Project" is actually part of the CEI, a "right wing" (in actuality it favors any government activity that will make its sponsors money) think tank. Representing major TV networks is one of their jobs.

    The reality is that people won't buy Netflix enabled TVs if they don't care about Netflix.

  • It's a nonsensical argument to suggest that a company that introduces a service requiring heavy bandwidth is making all Internet users subsidize it by pushing their ISPs into upgrading their pipes. Pressure on bandwidth is not a negative thing.

    The need for more bandwidth is one of the primary reasons why ISPs improve their offering over time. If it weren't for pressure on bandwidth they would mostly just sit back and let the money roll in without ever upgrading. Performing poorly on popular Internet serv

  • This is clearly anti-net-neutrality propaganda, but I am glad it was submitted to Slashdot. It points out that someone with the power to commission such an article thinks, probably correctly, that this argument will actually make some of the readers angry at Netflix. I haven't even read the article, but I'd love to know whose personal/corporate army was supposed to be rallied by this.
  • Just reading all of the comments made me fall in love with the slashdot community. I had to make an account today. If isps would give a guarantee of the bandwidth they can provide instead of selling the fantasy "up to" bandwidth this wouldn't even be an issue. Faux News Sucks.
  • 30-40 percent of all Internet traffic in the US is already Netflix. Those of us who don't download countless gigabytes each month are already subsidising the activities of heavier users. It has always been this way for the most part from the very beginning.

    What concerns me more is the prospect of a network where what you can do depends on your ISP rather than just the size of ur pipe. LOL...

  • FTA:

    Time Warner can’t pass on the cost only to Netflix subscribers; every Time Warner customer would have to pay more.

    Time warner *could* absolutely pass the cost only to netflix users, but that would not even be the best solution. The best solution would be to simply charge based on data transmitted rather than bandwidth caps. The cost you incur as a subscriber to an ISP is not your bandwidth cap during off peak hours. The cost you incur is how much data you actually send and receive during peak hours.

    The pricing scheme employed by the ISP should incentivize efficient use of network resources at all times. Imagine

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