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Level 3 Shaken Down By Comcast Over Video Streaming

Soulskill posted more than 3 years ago | from the premium-tubes dept.

Networking 548

An anonymous reader writes "It looks like the gloves are really coming off; Level 3 Communications had to pony up an undisclosed amount of cash to keep Netflix streaming to Comcast customers. Perhaps now the FCC might actually do something to ensure that the internet remains open. Level 3's Chief Legal Officer, Thomas Stortz, said: 'Level 3 believes Comcast's current position violates the spirit and letter of the FCC's proposed Internet Policy principles and other regulations and statutes, as well as Comcast's previous public statements about favoring an open Internet. While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast's decision goes well beyond this. With this action, Comcast is preventing competing content from ever being delivered to Comcast's subscribers at all, unless Comcast's unilaterally-determined toll is paid — even though Comcast's subscribers requested the content. With this action, Comcast demonstrates the risk of a 'closed' Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content.'"

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Wrong approach L3 (5, Insightful)

commodore64_love (1445365) | more than 3 years ago | (#34387328)

You should have done what FOX and NBC have done in the past - Cut off Comcast. When that happens the customers invariably blame the cable company for being greedy, not the broadcasters or Level 3 or netflix

Then Comcast would be forced to stop banning netflix, else risk losing customers.

Re:Wrong approach L3 (1)

Haedrian (1676506) | more than 3 years ago | (#34387384)

This would defentally not cause any backlash or media campaigns about how the government is ruining free internet will it?

I Disagree (4, Insightful)

eldavojohn (898314) | more than 3 years ago | (#34387398)

Then Comcast would be forced to stop banning netflix, else risk losing customers.

Uh, that's not how I see it going down. That would be like a staring contest and I'd bet that Netflix would blink first.

Customer: Hello, Netflix, I can't stream your movies anymore.
Netflix: Uh, well, that's your ISP's fault for not coordinating with our CDN.
Customer: But the rest of the internet is working fine.
Netflix: Yes, well, you need to get a different internet provider.
Customer: Comcast is the only broadband provider in my area.
Netflix: Well, write them an angry letter because it's not our fault.

So do you think the user is going to quit using Comcast or do you think they'll have no choice but to stop subscribing to Netflix since they can no longer stream movies? I think the latter is more likely what would happen. It's different because Fox and NBC provide a lot of free content and can easily tell the customer that their ISP is blocking the news. With Comcast, they know that Netflix is pulling down tons of money (look at their stock value) and they know that if they hold out they can wring more money out of L3 and, eventually, Netflix. And since in most of Comcast's realm there's a complete lack of a competitor. That's the real issue here, that Comcast customers often have no choice and there's a barrier of a cost to entry for anyone else to enter in as competition with them. Fix that and you solve this whole problem because then your scenario might work if users are really upset enough to change ISPs when Netflix doesn't work because their current ISP is trying to negotiate for more cash.

Class action suit? (3, Insightful)

grahamm (8844) | more than 3 years ago | (#34387446)

If Comcast are a monopoly supplier (ie customers cannot get broadband from another ISP) then maybe the customers who cannot get Netflix (or whatever else) should bring a class action suit against Comcast.

Re:Class action suit? (5, Insightful)

99BottlesOfBeerInMyF (813746) | more than 3 years ago | (#34387584)

If Comcast are a monopoly supplier (ie customers cannot get broadband from another ISP) then maybe the customers who cannot get Netflix (or whatever else) should bring a class action suit against Comcast.

They could, but not many consumers are interested in getting a $15 coupon off Comcast cable eight years from now when the lawsuit is over. Our courts, the FCC, the DoJ are all so pro-big business as the result of both political parties' appointments at the behest of lobbyists that breaking antitrust law is just another profitable new business strategy.

Re:Class action suit? (2, Informative)

hedwards (940851) | more than 3 years ago | (#34387778)

Indeed. When TD Ameritrade lost my information form their database, all they had to pay was a paltry number of free trades and were allowed to settle without admitting any wrongdoing. Which as far as I can tell is largely the status quo. The people actually harmed by the behavior rarely if ever get anything substantial out of it and the company rarely if ever has to pay much.

As far as I can tell that's more or less the status quo.

Re:Class action suit? (3, Insightful)

pitdingo (649676) | more than 3 years ago | (#34387792)

The problem is the customers are the ones responsible for having only Comcast. See, the voters elect politicians who pass laws and ordinances banning competition in the ISP space by granting exclusive franchises. You see a lot of laws being passed now which ban public ISPs. Amazing how people continue to vote for politicians who are so corrupt, but that is what they do. The worst part is, these same people complain about not having a choice of ISPs.

Re:I Disagree (2, Insightful)

Anonymous Coward | more than 3 years ago | (#34387452)

Netflix also provides a direct mailing service. I'd expect that would still hold sufficient value to the customer to make them prefer to keep their subscription to netflix and switch their ISP.

Furthermore if the ISP is the only one in the area you could probably throw words like "monopoly" around in your angry letter.

Re:I Disagree (2, Informative)

netsavior (627338) | more than 3 years ago | (#34387654)

I have not used the mail service from netflix in 2 years, and I just expanded my account to 3 dvds at a time (because it also allows me 3 devices streaming at a time). Most everyone I know is the same way, and Netflix corroborates my story, because they just now started offering a streaming only service.

Netflix is simply the best legal streaming video service on the internet now, sometimes I forget that they do DVDs at all.

Re:I Disagree (5, Insightful)

Rogerborg (306625) | more than 3 years ago | (#34387460)

So instead the paid the Danegeld. They can now expect a lot more Danes to come demanding their cut.

Re:I Disagree (4, Informative)

commodore64_love (1445365) | more than 3 years ago | (#34387866)

This obscure reference just went over 99% of Americans' government-educated heads.

"Danegeld" refers to the gold paid by the English monarchy to stop the Danish and Norway Vikings from raiding towns along the east coast of Britannia. I forget the exact date, but somewhere around 800-900 A.D. Many of the Vikings then set-up permanent villages in this area while collecting their tribute.

Re:I Disagree (5, Insightful)

fulldecent (598482) | more than 3 years ago | (#34387508)

I think you are too 1.0.

Customer: loading netflix...
Netflix: Sorry, Comcast has blocked Netflix because it competes with their own offerings. They were previously sued for this anticompetitive behavior, but it continues.

Your location was detected as [Philadelphia, PA], please click here for information to set up internet with: [ ] Verizon, [ ] RCN, [ ] Clear.
Please click here to upload a video to youtube requesting the department of commerce investigate this matter.
Please click here to connect to Netflix through 7 proxies.

Re:I Disagree (1)

TheCRAIGGERS (909877) | more than 3 years ago | (#34387692)

And how is the customer going to see this website if the website itself is blocked?

Just curious.

Re:I Disagree (1)

246o1 (914193) | more than 3 years ago | (#34387704)

Does Philadelphia really have 4 internet providers?! I live in New York, and that seems extravagant compared to our situation (I, like most of the city, don't actually have access to FiOS). I hope that companies folding on this will encourage the FTC and/or Justice Department to take some sort of action before we get a new President and another Bush-style housecleaning over there.

Re:I Disagree (1)

Golbez81 (1582163) | more than 3 years ago | (#34387518)

Speaking from experience in working with a top 5 web hosting company in the world, most peering arrangements are negotiated a lot like how cable companies contract to FOX or NBC. The company or network that provides the content, in this case Netflix, has the bargaining chip. Also, for Netflix to change from one provider to another is not easy, it's not as if they can just pick up shop and move from one to the other without paying huge costs in transfer. Also, as the original poster points out, Level 3 (Or Comcast) can just simply pull the cable. At which point you would be having that very conversation with Netflix and then writing an angry letter to Comcast. :)

Re:I Disagree (4, Informative)

commodore64_love (1445365) | more than 3 years ago | (#34387590)

More like this (from last year):

Customer: Hello ESPN360.com, I can't watch your sports anymore.
ESPN360: We're sorry, but your ISP has not paid for access. Please contact Comcast to complain.
Customer: But the rest of the internet is working fine.
ESPN360: We're sorry, but your ISP has not paid for access. Please contact Comcast to complain.
Customer: Are you even listening to me?
ESPN360: We're sorry, but your ISP has not paid for access. Please contact Comcast to complain.
Customer: (sigh) I guess I need to call Comcast. Or switch to Verizon DSL.

Verizon gained a lot of customers because of this. And now Comcast has caved, and they started paying ESPN360.com for access. Ditto Disneyconnection.com. I suspect after complaints or losing customers, Comcast would cave on netflix.com too

Re:I Disagree (1)

TheFakeMcCoy (1485631) | more than 3 years ago | (#34387648)

I'm glad I am no longer with Comcast, why ban content at this point they already have a download cap in place I think it was 10 gigs. I mean seriously if i have 10 gigs I should get to use it on what I want.

Re:I Disagree (1)

grapeape (137008) | more than 3 years ago | (#34387666)

Is that realistic though? I have seen areas that had only DSL and no cable available but I have never seen an area that had cable and no DSL.

Re:I Disagree (1)

TheCRAIGGERS (909877) | more than 3 years ago | (#34387732)

Is that realistic though? I have seen areas that had only DSL and no cable available but I have never seen an area that had cable and no DSL.

My area is exactly like this. I'm not savvy enough in the telecom industry to know this, but if somebody knew the maximum distance figures for cable and DSL, that would be interesting to know. Although it might not matter much since those figures are probably "meters from nearest trunk".

Re:I Disagree (0)

Anonymous Coward | more than 3 years ago | (#34387874)

vero beach, FL -- 8000 feet from CO, no verizon dsl -- only comcast broadband.

Re:I Disagree (5, Insightful)

bughunter (10093) | more than 3 years ago | (#34387884)

GP is right. But it's all about public relations.

Netflix: Uh, well, that's your ISP's fault for not coordinating with our CDN.

Um. No. You'd say that only if you wanted to piss people off.

A real corporation would avoid jargon, and point fingers at someone else... Hell, they do that even when they *are* at fault.

In reality, you'd get something more like:

Netflix: We're sorry, sir. Who is your internet provider? Comcast? Unfortunately, that appears to be a problem that all Comcast customers are experiencing. Please contact your Comcast customer service. In the meantime, can we offer you an free upgrade to your DVD by mail service for three months?

Re:Wrong approach L3 (1)

Sonny Yatsen (603655) | more than 3 years ago | (#34387570)

See, this kind of belief in market forces only works if there is a competitive market for internet access. Cable and internet providers are natural monopolies - they tend to be the only people servicing a particular area. People must stop believing that market forces will fix everything, especially when market failures exist in so many situations.

Re:Wrong approach L3 (2, Interesting)

Anonymous Coward | more than 3 years ago | (#34387618)

That seems like a reasonable opinion but all Republicans and most Americans have a quasi-religious perhaps even fanatical belief that a free market naturally corrects these problems. Alas, like all religious beliefs this is a matter of Faith and not subject to change based on facts.

Fail. (1)

gottabeme (590848) | more than 3 years ago | (#34387702)

Obviously, a geographically-enabled monopoly does not qualify as a free market. If Comcast had competition, and its customers had more choice of ISP, it would be at least somewhat of a free market, and it would change things considerably. Since Comcast has a monopoly in many areas, and since it's providing competing content--a conflict of interest--it needs more regulation.

Your argument is fallacious.

Re:Fail. (0)

Anonymous Coward | more than 3 years ago | (#34387880)

So you're saying there's no such thing as a free market.

Re:Wrong approach L3 (1)

Pfhreakaz0id (82141) | more than 3 years ago | (#34387658)

ok, I'm not a massive libertarian free marketer, but can't you in most places choose between DSL and cable?

Re:Wrong approach L3 (0)

Anonymous Coward | more than 3 years ago | (#34387812)

But given a choice, who would really want to choose an unreliable and more expensive DSL connection? Mb for Mb DSL is more expensive than cable. Where I live it's either Comcast or unreliable AT&T DSL. I've stuck with with Comcast.

Re:Wrong approach L3 (1)

Triv (181010) | more than 3 years ago | (#34387878)

Considering the bandwidth usage of many of the common web-based services and applications out there, DSL barely qualifies as Broadband.

We had 1.5mbps DSL for 6 months or so. There was enough of a bottleneck between our bandwidth needs (system upgrades, WoW patches, Hulu / Netflix streaming) and our available bandwidth that we had to schedule downloads for over-night. It wasn't a big deal necessarily, but more than anything else it amazed me how many applications out there assume a fast, always-on and practically unlimited downstream. We'd be watching a movie on Netflix and the stream would cut out, and we'd have to go hunting to figure out which system process on which computer suddenly started hogging the bits. Windows and MacOS background downloads were big culprits.

So we switched to Cable, (15mbps down, doesn't fizz out during lightning storms, low latency, etc) and, in a heartbeat, stopped worrying about all that crap.

While I hate everything that Comcast does on a policy level, it doesn't have any practical competition. Saying "if you don't like Cable get DSL" now is like saying "if you don't like DSL get dialup" a decade ago.

And yes, I realize I could have set up routing rules and bandwidth-by-protocol limits, and I'm capable of doing so, but most people aren't - most people want to plug the thing in and not have to worry about it anymore.

Re:Wrong approach L3 (0)

Anonymous Coward | more than 3 years ago | (#34387644)

Because we all have the choice of another high speed ISP?

Around here each area has limited choices in the last mile.

You're stuck choosing between the cable monopoly, or DSL from the phone monopoly.

Wow! (2, Funny)

nomorecwrd (1193329) | more than 3 years ago | (#34387330)

Only two levels to go!
We're doomed!

Alternatively... (1)

Gordonjcp (186804) | more than 3 years ago | (#34387338)

"Sorry, you cannot access Netflix from Comcast Internet. Please contact your local Comcast retentions department for advice."

Re:Alternatively... (1)

blueg3 (192743) | more than 3 years ago | (#34387378)

Depends on what that costs versus what paying up costs. I'm sure the company seriously considered that option. I know Time Warner Cable in our area does whenever stations want to get more money out of them.

Re:Alternatively... (1)

PopeRatzo (965947) | more than 3 years ago | (#34387818)

"Sorry, you cannot access Netflix from Comcast Internet. Please contact your local Comcast retentions department for advice."

"Shakedown" is such an ugly term. Here at Comcast, we prefer "service enhancements".

Dear Comcast (2, Informative)

LWATCDR (28044) | more than 3 years ago | (#34387342)

You are no longer my ISP.

Not to be a dick but nextflix (1)

assemblerex (1275164) | more than 3 years ago | (#34387344)

uses a tremendous amount of bandwidth. I know we should be arguing that they need new infrastructure, but just try to convince comcast to spend 2 billion dollars so you can watch fresh prince of bel-air. Not gonna happen.

Re:Not to be a dick but nextflix (1)

assemblerex (1275164) | more than 3 years ago | (#34387358)

Nextflix=Netflix , it's just a typo and [knock knock] damn, grammar nazis are here already...

Re:Not to be a dick but nextflix (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#34387422)

WOAH!!! Full invalid spelling all the way across the post! It's so intense! What does it mean?!?!?!?!

-Spelling Czar

Re:Not to be a dick but nextflix (4, Insightful)

theNetImp (190602) | more than 3 years ago | (#34387364)

Yes they use a lot of bandwidth, that Comcast's customers pay for in overpriced monthly fees.

So glad I don't have to deal with Comcast anymore

Re:Not to be a dick but nextflix (5, Informative)

Pinhedd (1661735) | more than 3 years ago | (#34387374)

Considering that Comcast posted a net income of over 3.5 billion last year I think asking them to reinforce their infrastructure so they can be competitive is not outside the realm of being reasonable.

Re:Not to be a dick but nextflix (1)

gottabeme (590848) | more than 3 years ago | (#34387766)

If that's true, someone mod the parent up.

Re:Not to be a dick but nextflix (1)

volxdragon (1297215) | more than 3 years ago | (#34387380)

...and Comcast is ALREADY billing you to provide those bits. What they are trying to do is double-dip on the traffic and charge both sides except Level 3 is already charging Netflix for the bandwidth provided to them so in reality the content is being triple charged. Charging an additional fee in the middle makes sense if you have a non-equitable transit service and are not directly peering, but in this case it's just greed and cost shifting.

This is not about Net Neutrality (5, Insightful)

martyros (588782) | more than 3 years ago | (#34387690)

Read the cnet article -- it has an interesting response from Comcast:

Unlike the peering relationship between Level 3 and Comcast, Comcast and Akamai, which had previously delivered Netflix's streaming video, had a commercial arrangement, a source close to Comcast confirmed. In other words, instead of swapping traffic between Comcast and Akamai for free, Comcast charged Akamai a fee to deliver its traffic including the Netflix video content.

Notice that the dispute is not between Comcast and Netflix -- it's between Comcast and Level3, which doesn't create content, only owns pipes. Level3 and Comcast have a "peer" agreement; they generate a similar amount of traffic, so they accept each others' traffic for free. That's a typical arrangement. However, this was before Netflix changed CDN from Akamai to Level3. Akamai sends much more traffic to Comcast than it receives, so it pays Comcast for receiving the traffic. That's also a typical arrangement. Now that Neflix will be going over Level3 instead, Comcast is just trying to negotiate the same deal w/ Level3 as with Comcast:

"Comcast offered Level 3 the same terms it offers to Level 3's CDN competitors for the same traffic," Waz said. "But Level 3 is trying to undercut its CDN competitors by claiming it's entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers."

Net neutrality may be an important issue, but it's not the issue here.

Re:Not to be a dick but nextflix (1)

MrMarkie (1079197) | more than 3 years ago | (#34387392)

uses a tremendous amount of bandwidth. I know we should be arguing that they need new infrastructure, but just try to convince comcast to spend 2 billion dollars so you can watch fresh prince of bel-air. Not gonna happen.

Well, if I pay for Internet access I pay for access to the whole Internet. Prices would have to be pretty damn low for me to accept this. Do they inform people signing up that they can only access parts of the Internet?

Re:Not to be a dick but nextflix (1)

commodore64_love (1445365) | more than 3 years ago | (#34387412)

>>>uses a tremendous amount of bandwidth

Which is why Comcast and other ISPs starting charging a Per Gigabyte rate (after you exceed their cap). If customers want to watch videos online, then they'll just have to pay the additional expense of that "tremendous amount of bandwidth". Or else watch less.

BTW I think it's time for an ATT-type breakup for Comcast, Time-warner, and other monopolies.

Re:Not to be a dick but nextflix (1)

ThatsNotFunny (775189) | more than 3 years ago | (#34387514)

The Time-Warner cable division is already split from the rest of the Time-Warner conglomerate.

However, despite being headquartered in the same building as Time Warner, Time Warner Cable is no longer affiliated with Time Warner, having been spun out to shareholders in March 2009.

source: http://en.wikipedia.org/wiki/Time_Warner_Cable [wikipedia.org]

Free market should solve it, right? (1)

Cyberax (705495) | more than 3 years ago | (#34387582)

Free market should solve it, right? Are you a communist if you want to stop these poor companies from getting their profit?

Re:Not to be a dick but nextflix (1)

Zocalo (252965) | more than 3 years ago | (#34387772)

BTW I think it's time for an ATT-type breakup for Comcast, Time-warner, and other monopolies.

Not disagreeing with you, but that doesn't really solve the fundamental problem with the lack of competition, does it? Instead of being forced to choose between Comcast (or Time Warner, etc.) and no Internet, people get to choose between Baby-Comcast-#xyz and no Internet, big whoop. It would conceivably make it easier for a start-up to build a network and compete with an individual Baby-Comcast, but if that were really the case then you'd expect to see a lot more regional ISPs offering competitive offerings, wouldn't you? Last I heard that wasn't happening much outside of large metropolitan areas...

Re:Not to be a dick but nextflix (1)

duguk (589689) | more than 3 years ago | (#34387488)

uses a tremendous amount of bandwidth. I know we should be arguing that they need new infrastructure, but just try to convince comcast to spend 2 billion dollars so you can watch fresh prince of bel-air. Not gonna happen.

Not commenting, just saying:

In October, Internet monitoring service Sandvine said: [boingboing.net]
Netflix streaming represents 20 percent of all U.S. Internet non-mobile bandwidth use during prime-time hours.

I read it here [boingboing.net] .

Re:Not to be a dick but nextflix (1)

stiller (451878) | more than 3 years ago | (#34387900)

Here in the Netherlands, I pay about $65 a month for 120Mbps downstream. My cable provider very much likes me to use all sorts of streaming services, because otherwise I would have no need for a 120Mbps connection. They even go as far as to peer with the various Dutch media providers. Of course, this is a little easier here since everyone is on the same internet exchanges (AMS-IX and NL-IX) anyway.

Comcast (1, Informative)

Anonymous Coward | more than 3 years ago | (#34387346)

Yet another showing by Comcast as to how the net shall lose it's neutrality in the coming years. Between the major ISP's, MPAA, RIAA, DHS and ICANN, we're going to be hosed. Had problems with these asshats for years now. Apparently either myself or my roommate downloaded something Comcast didn't like and now we are restricted to a maximum of 35MB per download, anything beyond that and Comcast decreases our bandwidth. They will not admit it to us though.

Re:Comcast (2, Informative)

1000101 (584896) | more than 3 years ago | (#34387784)

Is your current subscription in your name or your roomate's name? Just cancel the subscription and then re-subscribe using the other person's personal information. No way they are filtering/throttling based on a street address.

No! (5, Insightful)

Haedrian (1676506) | more than 3 years ago | (#34387354)

Keep the government out of my internet! The corporations can solve their problems in a way that the consumer is not effected!

Right?

Guys?

anyone?

Don't be so smug there snippy (2, Interesting)

Zero__Kelvin (151819) | more than 3 years ago | (#34387462)

Nobody save a moron would make the ridiculous claim that customers will not be affected by either government involvement or lack thereof. The issue is, in which way will the customer be most positively, or least negatively effected. Unfortunately this was handled poorly by Level 3, who should have said "no problem, cut us off, we'll get our lawyers to start the class action suit on behalf of your customers right away." They should have then sent out snail mail to all their customers who have comcast (determinable by IP) informing them of Comcast's actions, and their right to enter the lawsuit. That being said, I am all for a law that makes it illegal for anyone, government included, to fuck with the internet.

Re:Don't be so smug there snippy (0)

Anonymous Coward | more than 3 years ago | (#34387636)

That being said, I am all for a law that makes it illegal for anyone, government included, to fuck with the internet.

Who will enforce this law? The fairies? The Catholic Church? Google?

Re:Don't be so smug there snippy (1)

TheCRAIGGERS (909877) | more than 3 years ago | (#34387816)

Who enforces the constitution and the bill of rights?

Oh, crap....

Re:Don't be so smug there snippy (0)

Anonymous Coward | more than 3 years ago | (#34387656)

Can I get a Woosh Woosh...

Lighten up Francis.

Re:No! (1)

characterZer0 (138196) | more than 3 years ago | (#34387470)

Do not bring up that the government set up local monopolies. That argument is dead. Companies could be offering Internet connections via WiMAX or 3GPP LTE an areas currently dominated by cable and DSL, but they are not.

The free market fails when the majority of consumers are ignorant or apathetic.

Re:No! (1)

StayFrosty (1521445) | more than 3 years ago | (#34387564)

In my area there are companies offering internet connections via WiMAX and 3GPP LTE. They both suck. Their speeds drop during peak times (because they oversold the bandwidth they have available) they have horribly low caps (10GB/month) and their latency pretty high.

Some of these problems can be alleviated by increasing the bandwidth available to each access point. The problem lies in who that bandwidth is purchased from. It's either the local telco who offers residential DSL service or Charter. I suspect that neither of these companies are going to give the local WISP a good price for this bandwidth. This will drive the prices of WiMAX and 3G connections in to the realm of unreasonable.

Re:No! (1)

shentino (1139071) | more than 3 years ago | (#34387588)

Or lulled into a sense of helplessness.

Re:No! (1)

Haedrian (1676506) | more than 3 years ago | (#34387612)

"The free market fails when the majority of consumers are ignorant or apathetic."

They should have thought of that before they decided to invent the free market.

Re:No! (1)

SuricouRaven (1897204) | more than 3 years ago | (#34387896)

The laws of physics say that sending information through a cable is a lot easier, faster and more reliable than sending it through free-air electromagnetic radiation. You can't argue with physics.

Re:No! (1)

commodore64_love (1445365) | more than 3 years ago | (#34387520)

These aren't corporations.
And this is not a free market.
They are monopolies and monopolies need to *directly* regulated (i.e. price fixed), so they don't abuse their customers. See your local phone and electricity monopoly for examples.

Re:No! (1)

theNetImp (190602) | more than 3 years ago | (#34387558)

Oh you mean like the way the banks managed to keep us from having a recession recently and didn't need a bailout right?

Alternate viewpoint (4, Insightful)

Wonko the Sane (25252) | more than 3 years ago | (#34387360)

I generally respect Karl Denninger's [market-ticker.org] viewpoint on these issues since he was one of the people actually involved in building out the internet.

It's not about content, it's about volume and flows, and who pays for the infrastructure build necessary to handle them.

What amounts to poaching other people's resources works well right up until you drive that other party into the wall and force them to spend a crapload of money for which they receive nothing in return. That is, they don't receive any renumeration for the additional expense - but you do!

This is the base problem with all overcommitted services where the business model is predicated on fractional use of maximum possible resource consumption. When that model is violated costs go up dramatically. This is ok provided the person who has the cost also gets the revenue that is occasioned by the violation of the original model.

But in the case at hand, Netflix and similar get the revenue, but Comcast gets the cost.

I saw this one coming a mile away. If L3 manages to get the FCC involved and Comcast is prohibited from doing this they will be forced instead to either cap-and-charge customers or dramatically raise their prices, which will also blow back on the content folks like Netflix.

Suddenly that $8 "video any time" subscription becomes not $8, but $28 as Comcast adds another $20 to your monthly cable internet bill.

And there goes the pricing model that everyone loves so much about Netflix!

Re:Alternate viewpoint (5, Insightful)

edremy (36408) | more than 3 years ago | (#34387410)

But Comcast does receive something in return- customers. Customers want to access Netflix, and (presumably) won't use an ISP that won't carry Netflix. Yes, this may require Comcast to expand their services, but that's the price to maintain customers.

Of course, in America where you may not have a choice in ISPs, this breaks down entirely and Comcast is free to do whatever they want.

Re:Alternate viewpoint (3, Insightful)

Wonko the Sane (25252) | more than 3 years ago | (#34387464)

His point is that local bandwidth is cheap but long-haul bandwidth is expensive and the equipment necessary to stream the kind of bandwidth Netflix needs to a significant portion of their customers simply can not be purchased and maintained for the current price of a residential broadband connection.

Since the traffic can not be carried at the current price it won't be, because no amount of complaining or regulating will make the impossible happen. One way or another somebody is going to pay the true cost of moving the bits or else they aren't going to get moved.

I can't directly confirm his numbers but the guy ran a major ISP for several years and has no reason to lie about it now.

It's probably just greed. (3, Insightful)

gottabeme (590848) | more than 3 years ago | (#34387610)

the equipment necessary to stream the kind of bandwidth Netflix needs to a significant portion of their customers simply can not be purchased and maintained for the current price of a residential broadband connection.

Do we know that for a fact? I am skeptical. Bandwidth usage globally is increasing, and the rate of increase is increasing, and it's only going to get worse. Every ISP in the world has to deal with this every day, every year, and so on. Comcast is a huge company. If carrying Netflix is putting them in the red, why doesn't it do the same to small, local cable ISPs, who only have a few thousand customers? Why aren't the local ISPs' upstream providers doing the same thing? What about ISPs in Europe and Japan, where they provide comparatively enormous amounts of bandwidth to users? Why aren't they going bankrupt when they're sending 10x the bandwidth Comcast provides to each customer?

I may be wrong, but I suspect it's not a matter of losing money carrying Netflix content, but simply a matter of corporate greed.

Re:It's probably just greed. (2, Informative)

lingon (559576) | more than 3 years ago | (#34387838)

I second this. I pay ~$35 for my 10/100 Mbit split-speed unlimited broadband fiber connection (my ISP is Bredbandsbolaget), which is not an unreasonable price here in Sweden. And when I say unlimited, I mean no caps what so ever: I torrent *a lot* every month. I always wonder why you people over there in the States pay so much for so crappy connections ...

Re:Alternate viewpoint (0)

Anonymous Coward | more than 3 years ago | (#34387774)

ISP's over sell. I used to work for an isp... and we a;ready paid them to upgrade their infrastructure is another point.... it is ALL greed.

Re:Alternate viewpoint (1)

Polumna (1141165) | more than 3 years ago | (#34387864)

Maybe I'm missing something, but I still don't see how the argument applies. Sure, if Comcast were shaking down Netflix, I could see how that would be a reasonable line of discussion, but they're not... they're shaking down a Tier 1. Level 3 is surely incurring the cost of the vast majority of the long-haul bandwidth, since, well, they're bloody Level 3.

Combine this with Comcast's profit statements, the rate at which their internet access products are growing in both subscribers and revenue per subscriber, their actual or near monopoly status in virtually all of their service area and, perhaps worst, the obvious fact that they offer competing services. That makes a nice recipe for this-is-just-greed, and it's really horrifying.

Re:Alternate viewpoint (2, Interesting)

vlm (69642) | more than 3 years ago | (#34387482)

Customers want to access Netflix, and (presumably) won't use an ISP that won't carry Netflix.

Two problems:

1) Comcast is a monopoly cable internet provider in its area. There is no possibility of competition so they can pretty much do what they want. They have 6.897 million reasons for the government not to regulate their monopoly.

http://www.opensecrets.org/orgs/summary.php?id=D000000461 [opensecrets.org]

2) Comcast probably provides movies and videos on demand for $$$. The strategy is to use their monopoly internet service to boost profits in their MOD/VOD service. Frankly, as a guy whom purchases his VOIP and his inet svc from two different companies, I'm surprised I haven't been shaken down yet.

Re:Alternate viewpoint (1)

characterZer0 (138196) | more than 3 years ago | (#34387576)

There is no possibility of competition

There is a possibility of competition - DSL, WiMAX, 3GPP LTE. But for some reason, competition never materializes.

Re:Alternate viewpoint (1)

gottabeme (590848) | more than 3 years ago | (#34387726)

DSL is mostly another type of monopoly, since it's run by the phone company. WiMAX and 3GPP LTE are a whole 'nother ballgame because of technical limitations, and may not be able to fully compete with wired services.

Re:Alternate viewpoint (1)

Aryden (1872756) | more than 3 years ago | (#34387442)

If your business model did not have enough foresight to compensate, then your business model was designed to fail in the first place. ISP's well understand the continually growing market for internet delivered content by subscribers. Yet, they still offer competitive pricing packages under what they believe their expense per subscriber will be.

I see this as less an issue of bandwidth and more a business model issue in that, Comcast wishes for their customer base to use their services "Xfinity" for content delivery via phone, web and television rather than a competitor's service. This is nothing new in the business market. The unfortunate thing is, most people using these services (re: Comcast) are generally now locked into contracts or have very limited options for content providers. Clear is a much better option these days, if it is available.

Re:Alternate viewpoint (2, Insightful)

arivanov (12034) | more than 3 years ago | (#34387472)

Wrong.

Comcast has _BOTH_ cost _AND_ revenue. However what happens here is that its cost no longer matches its revenue model.

It has three options:

1. Recompute its pricing matrix and change retail consumer prices.
2. Try to recoup from what it sees as "disruptive" players.
3. Redesign the network to improve the cost/revenue metrics.

The second option is erroneously perceived as a "lesser evil". It may lead to some or all of the following consequences: FCC revisiting the special status of Cable Operators regarding telecommunications services which allow Cable to skip on some of the "telco obligations", FCC with FTC raising a competition issue which may result in regulations including mandatory wholesale access or any of the net neuterality options.

It should have jacked up the prices until it is back in the black and seriously considered 3 instead of this move. Level3 used to have good lawyers at least at some point. Back around 2000 they managed to twist the arms of Sprint, Ebone, MCI and other major players that were way more entrenched than Comcast. So winding it up so it lends a hand to FCC to do a competition case was a really really really bad move.

Re:Alternate viewpoint (1)

commodore64_love (1445365) | more than 3 years ago | (#34387490)

>>>Netflix and similar get the revenue, but Comcast gets the cost.

Yeah.
And?
If Comcast doesn't like it, they are free to (1) hand the network back to the city or county government that owns it, or (2) raise their internet rates to support upgrading lines to handle the load. Just as gas companies raise their prices when demand goes up (like summer vacations).

Comcast is a business and and they should either "man up" and stop bitching. Or quit. I'm sure Google or Apple would love to have a government-created monopoly over local neighborhoods, and buy-out Comsucks. The CC execs can go retire.

Re:Alternate viewpoint (1)

Wonko the Sane (25252) | more than 3 years ago | (#34387528)

(2) raise their internet rates to support upgrading lines to handle the load

I do believe this was one of the suggestions mentioned in the article I linked to.

Of course this shifts some of the costs on to the customers who don't use Netflix but maybe they won't complain as loudly as the Nexflix users.

Re:Alternate viewpoint (1)

whiteboy86 (1930018) | more than 3 years ago | (#34387544)

The goons that laid down the pipes can't possibly hold the content holders or content creators hostage. Moreover the infrastructure as a whole has not been built by Comcast only, many parties has been involved including the government (the backbones, leases etc.). The guy who controls the last mile cannot take ransom for certain content, that is precisely what the NET NEUTRALITY is all about - to prevent this from happening.

Re:Alternate viewpoint (1)

jpapon (1877296) | more than 3 years ago | (#34387832)

Am I crazy or is the simple solution to all this to charge consumers based on what they consume?

I know we all love unlimited broadband internet, but it was really only feasible for that short period when the fiber had just been laid and there was more than enough bandwidth to go around. Now that everyone is taking advantage of services that hog bandwidth, that's no longer the case.

It seems only rational to go to pricing models that charge per Mb or Gb. Yes, we all would hate it. Yes, with the current market it would be virtually impossible for an ISP to switch to such a model, since all of the competition is offering unlimited fixed price access. But once unlimited access prices begin to start going up (to reflect the actual cost of the bandwidth being used), it may actually become feasible.

I know we all like unlimited access, but it's really only a good model for those using a disproportionate amount.

as soon as FIOS is available I'm dumping Comcast. (1, Informative)

Anonymous Coward | more than 3 years ago | (#34387386)

Comcast sucks. Most of the HD content is very repetitive. I don't watch much tv.. except for Big Bang Theory, Fringe, and a couple of other shows. I wok out after supper now. Also I've gota few home projects I'm working on. So I stripped my Comcast account to be Internet and basic cable. .. they weren'y happy.. I went from $125.00/month to $50.00 / month (Internet is next tier up). If they dont' watch it I'll be looking for another way to get service.
Netflix is getting throttled down... I've played a few movies that dropped from HD to SD due to bandwidth throttling. Plus my Vonage service had due to Comcast bandwidth sucking. I live in a rural area.

And so it begins (1)

joepress99 (69729) | more than 3 years ago | (#34387396)

Old business model:
1. Create ISP
2. Provide Service
3. Charge for Service
4. Profit

New business model:
1. Create ISP
2. Provide Service
3. Charge for Service
4. Redefine Service
5. Charger for Service Again
6. More Profit

Meanwhile... (1)

NevarMore (248971) | more than 3 years ago | (#34387402)

The customers get screwed.

I heard this on the radio and there was some noise about Comcast losing cable TV business. WAAAAA! If I'm paying you to provide me with internet and I'm doing so in preference to paying you for TV maybe you should take that as a sign that your customers want generic internet access instead of cable TV. Instead Comcast sees its own business as a threat to itself and then tries to get someone else to pay for it. Netflix has a good reputation, but they aren't going to just eat this cost either.

Re:Meanwhile... (1)

commodore64_love (1445365) | more than 3 years ago | (#34387630)

They only lost 1/2 a million - or about 0.4% of total US households.

Comcast is hardly in trouble. BTW a lot of those cusomters are moving to Free TV (antenna). Why pay for something that is transmitted-to-air, and now with Digital TV there are 2-3 times more channels than under the old analog system. I get 40+ of them in my area - all free.

Or is it Just A Noisy Peering Dispute? (5, Informative)

1sockchuck (826398) | more than 3 years ago | (#34387416)

Comcast says the issue with Level 3 is a peering dispute [datacenterknowledge.com] and says it "offered Level 3 the same terms it offers to Level 3s CDN competitors for the same traffic." The issue seems to be that the Level 3's addition of Netflix as a customer may have altered the balance of the traffic exchange between Level 3 and Comcast. In other words, Comcast says the volume of traffic is the issue, while Level 3 says the type of traffic is the issue.

Re:Or is it Just A Noisy Peering Dispute? (1)

Attila Dimedici (1036002) | more than 3 years ago | (#34387632)

You make a good point. Additionally, Netflix has just made a deal with Level 3 to take most of the traffic they used to do with Akamai and now do it with Level 3. Akamai already had a deal with Comcast where they paid an additional fee because they sent more traffic to Comcast than Comcast sent to them. It looks to me like Level 3 got the Netflix traffic by undercutting Akamai on price.
This is like a deal between Exxon and BP to deliver each others gasoline over their pipelines at no cost because they each use about the same amount of volume on the other's pipeline, now BP has agreed to deliver Shell's gas over the pipeline (including Exxon's) and Exxon saying "you have to pay something for that additional volume".

Re:Or is it Just A Noisy Peering Dispute? (4, Informative)

ZaMoose (24734) | more than 3 years ago | (#34387678)

Precisely. All the Network Neutrality pushers are being played for suckers by Level 3. It's dirty pool on their part -- they're trying to get a better price in a market that was previously covered by "gentlemen's agreements" between ISPs and are attempting to incite a NetNeut flashmob in order to get their pricing.

Re:Or is it Just A Noisy Peering Dispute? (1)

Wonko the Sane (25252) | more than 3 years ago | (#34387734)

All the Network Neutrality pushers are being played for suckers by Level 3.

If the other comments on this article are any indication it's going to work.

Re:Or is it Just A Noisy Peering Dispute? (2, Insightful)

jonsmirl (114798) | more than 3 years ago | (#34387736)

How can Comcast complain that the traffic going to consumers is unbalanced? By the very nature of what consumers do the traffic is always going to be unbalanced.

Netfiix can fix this imbalance. Change their front end apps to send an endless stream of zeros to a bit bucket in Level3.

This is excellent (4, Insightful)

multipartmixed (163409) | more than 3 years ago | (#34387432)

Finally, a real example people can point to and say, "SEE!" when talking about net neutrality.

What SHOULD happen (2)

dnaumov (453672) | more than 3 years ago | (#34387468)

is Netflix should start billing Comcast for agreesing to deliver content to Comcast customers. I wonder how Comcast would like THAT.

Re:What SHOULD happen (1)

246o1 (914193) | more than 3 years ago | (#34387840)

And the customers all win! Sure, that might work out ok for Netflix, but we don't want the internet to get any more fractured. It's already annoying that so many sites don't let you use proxy servers, and crap like ESPN360. We don't need more of it. I wish Netflix would have used this to push for net neutrality.

If I was a Comcast customer ... (1)

contra_mundi (1362297) | more than 3 years ago | (#34387476)

And not looking for alternatives right now, I'd be mighty ashamed of myself.

Laws Comcast is breaking? (2, Insightful)

DoofusOfDeath (636671) | more than 3 years ago | (#34387506)

Do any of these hold water?


  • Illegal interference of a business relationship (between for example Amazon and a Comcast customer)?

  • Simple fraud and wire fraud, by telling customers that they're getting access to the Internet, when in fact Comcast knows its delivering only a subset of the Internet?

  • Copyright violation, because by filtering out some content, it loses Common Carrier status under the DMCA, and is thus liable for any coyright violations passing through its network?

  • Antitrust, because they're abusing their local near-monopoly on broadband internet into other areas of commerce.

Re:Laws Comcast is breaking? (-1, Troll)

Anonymous Coward | more than 3 years ago | (#34387580)

no

The UK (2, Interesting)

zandeez (1917156) | more than 3 years ago | (#34387534)

You guys have it better than we do at the moment. Ed Vaizley (Communications Minister) has supported the idea of paying extra for access to certain content on the internet. http://www.bbc.co.uk/news/uk-politics-11773574 [bbc.co.uk] As you can imagine I'm not too pleased about this, you guys are still looking to your government to help you, ours has already said they'll do the opposite.

Re:The UK (1)

ledow (319597) | more than 3 years ago | (#34387770)

Every country in the world has considered it, don't think they haven't. The problem is that there's no way to know what will actually happen and most people think it can't possibly operate in the manner those companies want for very long. That's why the UK has said "It's up to the ISP's" and not one ISP has actually jumped ship yet. And also, many UK ISP's have things like BBC iPlayer-supplied caching boxes so they don't overstretch their lines for BBC iPlayer. Is that somehow biasing them already?

The problem, really, is convincing people to use the content you want. If there's a single ISP that isn't subject to it, chances are most people (sooner or later) will end up with that ISP. It's not a question of "who jumps first" (like in the paywall on the Times website, for example), it's a question of "who doesn't want to be last?". Whoever doesn't do this ends up with more controlling power than any single content provider.

Nobody viewing your content = no income. The traditional means has been a popularity contest - whoever has the best content ended up attracting the most viewers from people who basically watched it for free (TV licensing aside, because it's a negligible amount that actually ends up in content provider's pockets for producing more programmes). Now people want to introduce a "pay us and we'll put you on TV more" kind of system which means you'd end up with the Internet equivalent of adverts. The problem there is that it's almost certain that while one ISP holds the rights to company X's services, another ISP will hold the rights to company Y's services, and unless you expect people to subscribe to BOTH, they will sacrifice one for another. Thus you end up in a little cliques - yeah, a connection that gives me good BBC iPlayer speeds compared to ITV is good if you like BBC - but if you're a casual viewer rather than a die-hard, you're just going to ignore it whereas before you were a casual consumers. There aren't enough hard-core fans of particular sites / services to justify running an ISP that gives them preferential treatment, because you will lose thousands of casuals for every hardcore fan you attract.

If BBC iPlayer announced tomorrow that you can only access bits of their content through, say, BT Broadband then the BT Broadband customers won't care. The one's not on BT Broadband are unlikely to change unless pushed or the content is *really* that good. But most people will just say "Oh" and go elsewhere (probably pirating BBC content from other websites). It's not a clear win at all.

The reason you can let the market decide is that, yes there might be turbulence for a year or two, but overall without you having to do anything it'll pretty much stay as it is. If the average broadband bill goes up, then people will end up asking for more on things like benefits (because internet access is pretty much seen as a useful thing for everything from paying bills to calculating tax nowadays) and the government lose unless they tax it even higher - chances are that *overall* taxable profit will stay roughly the same because those companies won't *each* be making more money. But if the decision is made to *not* split the Internet, then they haven't needed to do *anything* costly and administrative to enforce that and still don't lose out.

The markets deciding is actually quite sensible. That doesn't mean that the market's decision will be sensible, nor that the next few years will be sensible. But then, I already have an "Unlimited * " broadband connection, I already am subject to the whims of a 3rd-party quango's filtering on my Internet connection (the Internet Watch Foundation's blacklists), I'm already subject to the whims of potentially dozens of 3rd-parties when it comes to sending email to a friend on a different ISP, so you won't really notice that much difference.

The first ISP to offer "exclusive", or superior, access to something online will fragment the market into companies who *ALL* have some kind of exclusivity / priority and backhander, which means that nobody will bother to include that exclusivity in their calculations because they will almost certainly cancel each other out (i.e. I want to see X *and* Y) and then eventually the market will settle back to just generic "Internet access". Also, the first company to ask ISP's for extra money is likely to hit vast amounts of opposition from the ISP's themselves, especially once customers pick up that £5 a month of their broadband is going to fuel specialised access to a website that they don't even visit.

Let the market settle it - it'll mess things up for a while but it'll bring out the money-grabbers, show them up, and then everyone else will carry on as normal. And if all else fails, the Internet is pretty open to most things - alternatives always appear from nowhere once threats starts becoming reality.

It's the Times paywall for the whole Internet. Let's see how well that does in a year's time once the fuss dies down, and that will be an indicator.

Comcast customer here... (2, Interesting)

gtvr (1702650) | more than 3 years ago | (#34387540)

Already waiting for FIOS here, but if Comcast had cut off Netflix that would have driven me to DSL in the interim. Admittedly, streaming video takes more of Comcast's bandwidth than static pages, but there is streaming video from Apple trailers, youtube, porn, news sites and plenty more. Either Comcast builds and bills a service that supports that, or not. If not, they will lose out business to companies that can.

I have comcast basic cable and AT&T for the ne (2, Insightful)

voss (52565) | more than 3 years ago | (#34387550)

My at&t DSL may only be 1.2 mbps but its a reliable 1.2 and Netflix streaming works reliably. What good
is comcast's "high speed" cable internet if its a high speed road to nowhere?

Goodbye to Comcast TV, if that's the case (1)

DanCentury (110562) | more than 3 years ago | (#34387712)

I use Comcast for my ISP, but if this happens - if the tolls go up -- I'll dump as much of their TV service as I can. I get far more entertainment out of NetFlix than I get out of their TV services (cable + on demand + Fancast). My practical alternative is Verizon DSL or FiOS internet, but I don't want to enter into a two year contract with Verizon - and who knows if they'll be adding NetFlix or Hulu tolls as well.

The only thing that concerns me is we might see a drop in future TV content quality as more people move to NetFlix and Hulu. I don't know what slice of the $100 or so dollars a month I shovel over to Comcast ends up in the hands of the folks who produce TV shows, but I have to think it's more than the slice that comes from the $7.99 NetFlix or 9.99 Hulu Plus gets. I know I'll survive, but I don't want to see Mythbusters, Dirty Jobs, or even American Pickers go away.

Re:Goodbye to Comcast TV, if that's the case (1)

cdombroski (1075539) | more than 3 years ago | (#34387806)

Oddly enough (unless the TV network is owned by TWC and shares the revenue of the cable portion) none of your cable bill goes to the TV networks. That's why they have ads. Your cable bill just pays TWC to bring the TV network content to you. Last I checked, you could still get a large satellite dish (multiple foot diameter, does anyone sell those anymore) and pull down the TV network content yourself.
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