Date: Sun, 27 Jul 2014 19:39:45 -0700
From: Leon Towns-von Stauber <leo...@occam.com>
To: LOPSA Discuss <discuss@lists.lopsa.org>
Subject: Re: [lopsa-discuss] Https - the solution to net neutrality and ISP
monopolies
On Jul 22, 2014, at 3:10 PM, Paul Graydon wrote:
On Tue, Jul 22, 2014 at 02:46:32PM -0700, David Lang wrote:
On Tue, 22 Jul 2014, Will Dennis wrote:
I think all of this PR battle (which now parts of the LOPSA
membership is getting sucked into ;) is over Netflix trying not to
have to pay VZ to reach their customers like they did Comcast --
http://www.nytimes.com/2014/02/24/business/media/comcast-and-netflix-reach-a-streaming-agreement.html
I agree that this is what Verizon is trying to do. I think the
comcast agreement was a bad thing for the Internet (for all the
reasons mentioned here)
You have to understand, this is common practice. Almost all of the major
internet companies pay various ISPs to compensate them for the amount of
traffic.
Netflix is one of the very few that hasn't been. You can argue about whether
it's a good idea or not, but the precedent is long established.
Paul
I've been waiting to wade into this conversation, avoiding the back-and-forth.
I'll try to get all my contribution, FWIW, into this email, but to make my
position clear, Derek has been saying most of the things I would've.
The main point that needs to be made, and which almost never is in these
discussions or in articles about Netflix or Net Neutrality, is that there is
nothing fundamentally new here (along the lines of what Paul said). Internet
peering agreements have a couple of decades of tradition behind them (as do
conflicts about peering). True peering, in which money doesn't change hands,
has always been based on an assumption of roughly equal traffic. If you want to
hook up to someone else's network and aren't willing or able to offload about
as much traffic from your peering partner as you intend to send, then you're
going to pay for it.
It's true what one discussion participant said, to a certain extent: the fact
that it's Netflix sending all this traffic is none of Verizon's business.
Verizon's direct issue is with Level 3, and normally it would be Level 3
obligated to pay Verizon; the case for Verizon to pay is nonexistent, AFAICT,
based on traditional arrangements.
However, it's clear that the majority of traffic under dispute is generated
from just one customer of Level 3, and it would be nonsensical for Verizon or
anyone else to ignore that. The situation is pretty simple: Netflix is already
paying what is presumably a bunch of money to Level 3 and doesn't want to give
any more to Verizon (as they already agreed to do with Comcast); Level 3 is
getting a bunch of money from Netflix but doesn't want to pay its share to the
providers with whom it connects; and Verizon doesn't want to commit to
supporting one of Level 3's customers at its own expense. All understandable,
but there's a clear precedent to follow: Level 3 should pay to peer with
Verizon, or Netflix should pay to peer directly with Verizon. All the rest is a
political smokescreen.
On Jul 22, 2014, at 1:36 PM, Steve VanDevender wrote:
Netflix isn't flooding Verizon's network for no reason, Verizon's own
customers are requesting the traffic from Netflix. Perhaps Verizon has
some obligation to serve its customers in that case?
Sure, but as a for-profit corporation, Verizon has a more urgent obligation to
make a profit. They can't take responsibility for supporting Netflix's
business; it would be financially irresponsible. Say Verizon bites the bullet
and pays to upgrade their capacity at the interconnect now. What do they do as
Netflix's customer base continues to grow? What do they do when Netflix has the
power to make arbitary changes on their side that impact Verizon: back off on
compression to provider higher video quality, start delivering 4k video as it
becomes available, etc.? Keep in mind that Netflix has no contractual
relationship with Verizon to limit this kind of thing. You're asking Verizon to
be at the mercy of one of their competitor's customers; what responsible
corporate leadership would agree to that?
Carrier-grade equipment is expensive to purchase, maintain, and replace. For
Verizon to make that investment, they'll need a source of funding. They could
leave Netflix and Level 3 alone, as you would advocate, and charge their
customers more, either by instituting bandwidth-based billing to target Netflix
customers or by raising rates on everyone, and then watch as their customer
base bleeds off to their competitors (including Comcast where available, which
receives its funding directly from Netflix). Or they could get the money from
Level 3 or Netflix, which is the established way to do it.
On Jul 22, 2014, at 2:14 PM, David Lang wrote:
I happen to believe that the world where Verizon wins and every server is
potentially supposed to pay every ISP for the traffic generated is a worse
world than the one where L3 wins and peering remains a relatively small portion
of everyone's budget and the ISPs continue to cooperate.
That's a straw-man extension of the situation. No one is suggesting that
everyone providing a service on the Internet should pay every ISP in the world
to reach their customers; that is a patently ridiculous notion, and the fact
that it gets discussed is a sign of how out-of-whack this issue has become.
This is a bog-standard peering disagreement being elevated to a political
hullabaloo by Netflix and Level 3 who don't want to pay their share according
to rules that have been established for something like 20 years. It's because
of the enormous amount of traffic Netflix is serving that the issue of payment
has arisen. The local gift shop is not going to have to pay Verizon and
Belgacom and some podunk Siberian ISP to make their Website reachable. Claiming
that this is the the sign of some sort of Internet apocalypse instead of what
it is -- old-fashioned business negotiations -- invests this issue with a lot
more energy than it deserves.
In the end, Netflix will pay, one way or another. Companies do this kind of
thing every day, and have for a long time.
- Leon
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