[rayiner]

I don't see what's unfair about ISP's charging Netflix when the ISP's are the ones that spent billions building the networks that made Netflix possible in the first place.

Netflix is particularly unsympathetic in my eyes, because its just a middle man. Almost all the real value (the content, and the wires that deliver the content to consumers) is created by other people.

[DSMan195276]

Points worth considering:

ISP's have tended to charge for a specific speed, not amount of data. By throttling the Netflix connection they're basically saying "We don't really care that you paid us to be able to access anything on the internet at this speed".

And it's worth noting that this is a case where the ISP is in complete control of the speed you get Netflix. There are many cases where the ISP doesn't have a hand in this, the server you're connecting to simply can't pump stuff out fast enough to go as fast as your ISP will let you. But in this case Netflix has more then enough server power (Which they paid for), but the ISP's are specifically slowing down the end connection to you're house to a lower speed then you paid for unless Netflix is willing to fork over more money.

It is almost exactly the same thing as if you were to purchase a 'subscription' to the post office where they guarantee your packages would be delivered in at least 10 days (when possible). But, packages from Netflix are purposely slowed down by the post office and get to you in 14 days instead, and the post office turns around and tell Netflix they need to pay more if they want the package to get to you in 10 days, even though you already paid for that speed.

[rayiner]

> ISP's have tended to charge for a specific speed, not amount of data. By throttling the Netflix connection they're basically saying "We don't really care that you paid us to be able to access anything on the internet at this speed".

I think you're reading an "anything on the internet" into your service agreement that isn't there, but even then you have at best a case for false advertising. If ISP's were up front about these practices, would it be OK?

[msandford]

I have 50/5 cable service and I often can't get even 3Mbps to Netflix for a full-HD stream.

I don't know that regulations regarding advertised vs actual speeds are going to do anything to solve the problem, but I do believe that there is a problem when I can't use even 6% of the theoretical bandwidth that I've theoretically paid for.

I understand not getting 100% downloads all day every day from every website on the internet. Not all have fast enough servers or fast enough primary links or whatever. I understand not getting even say 50% downloads all day every day because I know how TCP backoff works; it's exponential and a lot of downloads are short.

I might even understand not being able to use all 25% of my connection 24/7 again because there are things like peak usage where everyone gets home from work and starts doing stuff online at home and the local loops that the cable company has provisioned might be too big to provide everyone with 100% throughput. I'm not necessarily complaining about that as there are realities to life that aren't necessarily pretty but still real.

But what I can't understand is that my ISP which advertises a specific download capability would throttle it at the SOURCE (or the input to their network) when there is enough bandwidth at the last mile to support the connection.

For the vast majority of internet history (admittedly only 25 years or so) the limiting factor was almost always the LAST MILE. We're now finding out that it's not the last mile anymore but still something within the ISP's control and they're not doing much to alleviate the problem.

This to many folks feels like a betrayal because according to a certain "the last mile is always the slowest" mindset, it is! People aren't wrong to think that because that's how it's always been. ISPs are creating a paradigm shift that they're not telling anyone about and are in fact doing a good job to obfuscate.

You might disagree that it is a betrayal but it feels like that to many folks. You can try to tell them they're wrong but I suspect that because of the many years of assumptions people have had about the way the world works you won't have a lot of luck.

[DSMan195276]

I doubt it has that specific wording, yes, and I do know that it has the wording "up to", not guaranteed, so they're not breaking the contract.

But the point still stands, why the heck am I paying for 2 MB/s download speed if my ISP isn't even going to give me that much if I pay for it? IMO, it's simply bull. If they were actually upfront about these practices (instead of just making it look like Netflix's or whoever-else's fault) I can guarantee you their would be a ton more outrage. If my ISP isn't going to actually give me 2 MB/s download when they are completely capable of doing it, and I paid for it, that's just absurd. In any other industry that type of practice would easily be grounds for a lawsuit. It's not even that it's out of their control, they're purposely going against attempting to fulfill what you're paying for.

[pyre]

> If ISP's were up front about these practices, would it be OK?

It certainly doesn't help that the SOP for ISPs in the US is to deflect blame for network issues, even when the blame falls squarely on them (throttling Netflix, their DNS server is down, etc). It's always the user's fault or the remote site's fault. Never the ISP's fault.

You can even see this in the rhetoric that they espouse about Netflix. The ISPs are choosing to throttle Netflix. It's a business decision. Yet, they want people to think that it's Netflix's fault for not "paying up." Regardless of whether or not you think that the ISPs have a right to ask Netflix for this money, it's disingenuous to say it's Netflix's "fault" for deciding not to pay.

[prepare]

The ISPs didn't spend billions building this network, they were handed billions of dollars from the government to build the network

What if it were Comcast charging Sony extra money to deliver their streaming service for Sony produced content? What if Time Warner wants to charge Hulu extra money to deliver content since it is owned by Comcast? You can dismiss Netflix for not creating content to a small degree (house of cards, arrested development, orange is the new black all produced by Netflix themselves, I would argue they are a content creator as well but thats beside the point) but if you substitute Netflix for someone else, its obvious that this is anticompetitive.

This is hacker news - Can you imagine trying to start a web based company and being forced to pay monthly fees to every single ISP just to get decent speeds to end users? What if Comcast decides it wants to start delivering goods so they jack up prices on instacart's monthly fees Or they want to expand into Taxi services so they throttle uber down to 52 kbps for all their customers

[rayiner]

> The ISPs didn't spend billions building this network, they were handed billions of dollars from the government to build the network

This is absolutely false. Almost all the existing cable infrastructure was built with private money.

> Can you imagine trying to start a web based company and being forced to pay monthly fees to every single ISP just to get decent speeds to end users?

So? It's precarious to build a business that depends wholly on someone else's expensive infrastructure. I don't see why web businesses should be different than app businesses in this regard, which have the same problem. If Apple decides to vertically integrate into your market, as an iOS app developer you don't have much recourse.

[prepare]

>Almost all the existing cable infrastructure was built with private money. [citation needed] meanwhile, http://en.wikipedia.org/wiki/Internet_in_the_United_States#G... has a great list of numerous government programs and funds that have dispensed billions of dollars into network infrastructure in the US

>I don't see why web businesses should be different than app businesses in this regard

So you see the World Wide Web as an equivalent to the Android Play Store? I find it hard to believe you do not see the gaping difference here. 1. the web was invented by a government agency 2. You pay for access to the web, this includes upload and download bandwidth, there are no restrictions that limit what you are allowed to do with this bandwidth, there is no agreement that you will only use specified port numbers, and not upload more than x amount of data, etc 3. would you say the automobile industry is wholly dependant on someone else's infrastructure? (roads, highways, street lights, electricity, etc) 4. again you pay for access to the web, not the web itself - the internet is not a product that is controlled by anyone, only its access is controlled. This is fundamentally different from an app store that a company wholly owns, and controls all content within

Comcast does not own or control any part of the internet itself, everything on the internet exists on the internet independently of Comcast. The only thing that Comcast provides subscribers is a pipe to and from the internet with an agreed upon speed to the internet

[rayiner]

> meanwhile, http://en.wikipedia.org/wiki/Internet_in_the_United_States#G.... has a great list of numerous government programs and funds that have dispensed billions of dollars into network infrastructure in the US

The only projects on that list that have distributed significant money are funded by the Universal Service Fund. That money doesn't come from general taxation, it comes from a specific tax on the telecom industry. Imagine if the government levied a 15% tax on smartphone sales and spent that money to subsidize telephones for the poor. Could you then turn around and say "Apple and Samsung are getting massive government subsidies?" That's basically what you're doing when you point to USF and say public money went into the telecom networks.

Moreover, this debate is mostly about cable, which has historically been a different sphere from "telecom" (i.e. the phone system). The networks we're talking about, Comcast's, TWC's, etc, are cable networks built with private money after deregulation in the 1990's.

> So you see the World Wide Web as an equivalent to the Android Play Store?

The World Wide Web is just a set of protocols that runs mostly on private networks. It's a platform owned by the companies that own those private networks.

[dctoedt]

> Imagine if the government levied a 15% tax on smartphone sales and spent that money to subsidize telephones for the poor. Could you then turn around and say "Apple and Samsung are getting massive government subsidies?"

Not only can you say that, you should say that. The tax money is ending up in Apple's and Samsung's pockets, routed through poor people (who presumably benefit from the subsidy, of course, and thus putatively benefiting society as a whole as well).

[everythingswan]

I don't really like the term middle man for this. They repackage and sell a service. They have solved a problem better than anyone else. That is real value.

Just because the product or service is a derivative of something else doesn't mean it doesn't have real value. Fantasy football, for example. Should we look at fantasy football sites because they just repackage NFL stats?

In this situation, we should just let AT&T/Bell dictate all things internet, since they laid the foundation with their lines. I think the point has some weight, but there's a lot more at stake than a simple service fee.

[pyre]

> In this situation, we should just let AT&T/Bell dictate all things internet, since they laid the foundation with their lines.

... at a time when the government guaranteed their profits. I think that's an important point to remember when a business built off of years of government-granted monopoly starts complaining about government regulation.

[rayiner]

The monopoly was granted in return for all sorts of regulations (namely, universal service). The monopoly protection is gone now, so presumably should the regulations be gone.

Moreover, how relevant is the pre-1980's POTS infrastructure to this whole debate? How many Netflix customers are on DSL that hasn't been rebuilt since the breakup?

[dragonwriter]

> Moreover, how relevant is the pre-1980's POTS infrastructure to this whole debate?

Very

> How many Netflix customers are on DSL that hasn't been rebuilt since the breakup?

Even if its been rebuilt since the property rights were acquired, the fact that the property rights were acquired when the provider had a monopoly and government backing (and the same thing applies to the cable cos that are ISPs as to the telcos) is a substantial advantage over any new entrant.

[rayiner]

> Even if its been rebuilt since the property rights were acquired

Everywhere I've lived, cable companies don't own the rights of way, but instead pay municipalities or power companies to run wire along public easements or power lines.

[ohitsdom]

Consumers are already paying for their internet connection that cost billions for ISPs to roll out. Now ISPs want to charge both parties, and that is wrong.

Do you remember life before Netflix? Incredible you would say they don't bring much value.

[dragonwriter]

ISPs don't really want to charge both parties so much as they want to tax Netflix for competing with VOD services that ISPs (who are generally also digital TV providers) want to provide.

Its not really about getting money from Netflix, its about getting rid of Netflix.

[rayiner]

Two parties benefit when you order a movie on Netflix: you, and Netflix. The company that builds the infrastructure should be able to charge both. It's just how public transit infrastructure is often funded by a combination of user fees and increment taxes on the businesses served by the new road or train line.

Indeed, it's a fairly basic principle of the economics of building infrastructure. A free market underinvests in things like train lines because the builders can only capture one aspect of the positive value created by the infrastructure (the value to the user). However, that leaves a large amount of value to the businesses that users use the infrastructure to get to. If builders can't capture that aspect of value, they'll under invest in such infrastructure. There is a whole body of work on this subject.

[theandrewbailey]

Netflix pays a company to provide Internet infrastructure to them. (Level 3, I think) If your ISP isn't Level 3, they should not have the economic right to charge Netflix, because your ISP doesn't service them. Customers pay their ISP to deliver things customers want, no more, no less.

[rayiner]

Even if Netflix pays someone to get its data to Comcast's or AT&T's network, they benefit enormously from Comcast or AT&T getting that data to the consumer. In theory, both intermediate ISP's should have the right to charge both endpoints.

And in fact, that's how it has traditionally worked on the internet. Netflix would pay it's ISP, and the consumer would pay their ISP, and the ISP's would pay each other to account for any asymmetry in the data transfer between them (peering). These payments would ultimately be reflected in the charges billed to both endpoints, so the ultimate effect was that each intermediate ISP effective billed each endpoint of the connection.

This whole debacle arose because Netflix's ISP (Cogent) wasn't willing to adhere to the traditional peering arrangements. So in the end, Netflix ended up paying to connect directly to Comcast's network.

[selmnoo]

> Netflix is particularly unsympathetic in my eyes, because its just a middle man. Almost all the real value (the content, and the wires that deliver the content to consumers) is created by other people.

That is a very strange way to look at things. The rate you're going, I can call anything pretty much anything. What is an ISP but a middle man -- they only facilitate content going from one end to another? Why is content the real value -- to me, it's totally formulaic, dull, uninspiring trash these days. See? You must explain more rigorously the criteria with which you're judging things here.

I also think your reduction of Netflix technology is peculiar - creating Netflix is no trivial feat. Reliable and user-friendly streaming technology for the masses, if it were so easy, would have been done earlier by other big companies. Netflix is doing a lot of things right, including making their own content of all varieties (children shows, adult shows, etc.) that seems to be received well by folks.

I'm guessing that you value the fact that ISPs have poured a fair bit of money into setting up the infrastructure. It's a good point, but I think ultimately moot. Lots of companies give it their all and still die. The people's will rules at the end of the day, whether to do business with them, whether to shape law to grant them their livelihood. This time, I'm personally okay with how people are judging ISPs.

[rayiner]

There's lots of reliable and user-friendly streaming technology on the internet. Youtube, Hulu, Vimeo, Vudu, BBC, RedBox, Amazon Prime, etc. It's not trivial, sure, but it's much easier than building a modern fiber-coax cable network. As for content, it's valuable because it's hard (and expensive) to make content that appeals to the mass market. I don't think people care whether the streaming technology is Netflix's or Vudu's. I do think they care whether they're watching Warner Bro's "Pacific Rim" versus SyFy's "Atlantic Rim."

You're right that Netflix and Amazon are creating value through their original content businesses. That's kind of orthogonal to this debate. That original content gives them a natural leverage over the ISP's that their role as content middlemen does not.

[duaneb]

> when the ISP's are the ones that spent billions building the networks that made Netflix possible in the first place.

Guess who pays for that ISP? The consumer, and the consumer pays by having to be on a shitty network where the operator blackmails the places that are popular, because they are popular. Also, the consumer pays through the nose for this service. And if all this money is going into infrastructure, why don't I see it reflected in my speeds?