Inside The Netflix/Comcast Deal and What The Media Is Getting Very Wrong. On Sunday, Comcast and Netflix announced a commercial interconnect relationship between the two companies, which is in the very early stages of implementation, and as a result, many who clearly don’t understand how the Internet works are writing about the news. [Here’s How The Comcast & Netflix Deal Is Structured, With Data & Numbers] Those who don’t cover network infrastructure for a living should not be trying to explain the technical details behind today’s announcement. Articles from mainstream outlets like TechCrunch, WSJ, NPR, Time and many others aren’t even getting the basics right. Words like transit, peering, speed, bandwidth, capacity, etc. are being used interchangeably without any understanding of what they mean. [Updated 10:15pm: Time was originally mentioned due to a short piece they quickly put up when the news was announced.
In the hopes of trying to educate the market, let’s clear up a lot of the confusion many in the media have created. Here's How The Comcast & Netflix Deal Is Structured, With Data & Numbers. There’s been a lot of speculation involving the business and technical details surrounding the recent deal between Comcast and Netflix and plenty of wrong numbers and information being used. I thought it would be helpful to detail what’s really taking place behind the scenes, highlight some important publicly available data in the market, talk about the deal size, and debunk quite a few myths that people are spouting as facts.
It’s time we cut through a lot of the misconceptions of the deal, from both a business and technical level, and focus on what’s really happening. This is a long post, but if you really want to know what’s happening, I’ve tried to make it really detailed. [My first post on the deal can be found here: Inside The Netflix/Comcast Deal and What The Media Is Getting Very Wrong] From a technical level, Netflix has their own servers that are sitting inside third-party colocation facilities in multiple locations. The Netflix/Comcast deal: nothing to do with Net Neutrality « radiobruxelleslibera. The Netflix/Comcast deal: nothing to do with Net Neutrality? Posted on Updated on Today the press is reporting about a deal between Netflix and Comcast, which will allow the movie provider to connect directly to the network of the broadband provider.
I understand that this is a direct peering agreement, but not for free (as it often happens in the peering environment), since Netflix has committed to pay Comcast for the disturb (details of the price are not public). By virtue of this agreement, Netflix’s subscribers will enjoy a better quality when watching their movies. The deal between Netflix and Comcast seems therefore a normal commercial transaction, since content providers may have the choice to connect directly to the network of their users or instead to deliver traffic to a carrier, which will do the rest directly (via own peering agreements) or via further carriers.
One could argue whether this deal has something to do with the NN debate. A pure commercial decision? Like this: The Netflix-Comcast agreement isn’t a network neutrality violation, but it is a problem. It wasn’t long after Comcast and Netflix finally settled a festering peering dispute that people starting claiming that this resolution means the end of network neutrality. But it’s not. For better or worse, the legal framework governing network neutrality in the U.S. — the recently gutted Open Internet Order — doesn’t touch the issue of network interconnection and peering. It could have, but at the time the FCC was pulling together the Open Internet Order in 2010, then-chairman Julius Genachowski decided not to bring interconnection agreements under the purview of the order. At the time it made sense, though even back then peering disputes raised consumer-protection issues.
It would have precipitated a big fight and upset a fairly established internet practice when the big focus was on the last mile. So now we have a situation that FCC chairman Tom Wheeler summed up well when I asked him about peering in an interview late last month: So what’s going on? A modest proposal. Comcast Versus the Internet. Imagine a restaurant whose most popular dishes are made with fresh tomatoes. Given the large quantity in which these dishes are produced, tomato shortages are frequent, yielding patron complaints. In response, the restaurant’s tomato supplier promises to build a storage facility nearby, in order to insure that the restaurant never runs out of tomatoes. In a competitive market, the restaurant would gladly accept this offer, fearing that its uneven tomato supply will cause it to lose customers.
But, if the restaurant industry resembled today’s broadband-Internet market, the restaurant would be the only place in town that served tomato dishes. That kind of backward logic is the essence of the deal that Comcast and Netflix announced on Sunday. The deal sets a bad precedent—it will embolden Comcast to extract more tolls from any popular Web company that wants to reach its broadband customers and fears degradation of service.
Two policy implications follow from the Comcast-Netflix deal. Netflix's Streaming Quality Is Based On Business Decisions by Netflix & ISPs, Not Net Neutrality. Over the past two days, there’s been some news articles suggesting that some ISPs, like Verizon, may be purposely throttling or slowing Netflix’s video content over their last mile network, because of the recent Net Neutrality rulings. While that sounds like a great headline and something to get people all worked up over, that’s not what’s really taking place. The reality is that business decisions that Netflix and ISPs make regarding quality of service determine how good Netflix or any other content looks when streamed to consumers.
Both Netflix and ISPs are constantly having to add capacity to their networks, of all kinds, and make decisions on how much money they want to spend versus the level of quality they want to offer. To make it simpler, if Netflix or the ISP can deliver content right now and the video starts up within three seconds and has SD quality, they have to decide if it is worth spending the additional money to make it startup within one second and have HD quality. Internet Tolls And The Case For Strong Net Neutrality. The Internet is improving lives everywhere – democratizing access to ideas, services and goods. To ensure the Internet remains humanity's most important platform for progress, net neutrality must be defended and strengthened. The essence of net neutrality is that ISPs such as AT&T and Comcast don't restrict, influence or otherwise meddle with the choices consumers make.
The traditional form of net neutrality which was recently overturned by a Verizon lawsuit is important, but insufficient. This weak net neutrality isn't enough to protect an open, competitive Internet; a stronger form of net neutrality is required. Some major ISPs, like Cablevision, already practice strong net neutrality and for their broadband subscribers, the quality of Netflix and other streaming services is outstanding. Once Netflix agrees to pay the ISP interconnection fees, however, sufficient capacity is made available and high quality service for consumers is restored. Reed. Netflix Says It Really Didn’t Want to Cut That Traffic Deal With Comcast. Remember last month, when Netflix and Comcast signed a deal to guarantee fast delivery of the video service’s streams to the cable company’s customers?
That’s exactly the kind of deal Netflix shouldn’t have to sign, says Netflix CEO Reed Hastings. That’s the gist of the argument Hastings makes in an essay he has posted on his company’s blog, titled “Internet Tolls And The Case For Strong Net Neutrality.” In the essay, which the company has also filed with the Federal Communications Commission as that agency prepares to create new net neutrality regulations, Hastings says that “interconnection” deals, like the one he signed last month, shouldn’t be necessary to ensure that his stuff — or anyone else’s — gets to broadband customers.
Hastings’s essay also spells out the fact that his company is now paying Comcast directly to connect with its pipes — something people at both companies acknowledged privately but wouldn’t say out loud last month.