I'd like to note for the record, Bill, that I don't think this conversation
is in fact troll-feeding; I think that the accumulated weight of various
reasoned explanations as to why the situation is the way we see it has
value in the long term, in changing what people will try to get away with.
And in any event, I started the thread; while I may have been rabble-rousing,
I wasn't trolling. 
Cheers,
-- jra
And as much as I am not a fan of usage-based pricing -- and as often as
I disagree with Mark -- I don't have any problem with *that* approach:
You get a big first cap, and then you rate limit to something suitable
for everything except bulk transfer, and you can buy a bigger cap.
As long as that first cap is reasonable -- and 120GB is, even for me --
then it's not a real hassle.
The problem is a) putting the limit in the right place (x% of the
customers consume y% of the total throughput per month) and b)
selling it to existing accounts.
It won't affect 100-x% of the customers, and of those, some percentage
less than 100% will complain. Is that acceptable? Depends.
Cheers,
-- jra
Except perhaps for the (current discussion) small rural ISP.
The bandwidth scaling equations out in Ruralistan have never been the same as in large metros. You see this in wireless delivered performance as well. Netflix is probably not the straw that broke the camel's back, but it's The Thing Du Jour which one can point at and criticize, so it 's becoming a focal point.
George William Herbert
Sure, but that's nothing more than the latest version of "I gambled on oversubscription as a business model, and lost." As you point out, and has been pointed out previously by several other posters, this is how the Internet works. Some new thing is always going to come along which uses more bandwidth than previous things, and if that new thing gets popular ...
In Brett's case he made the point explicitly that it's not even a matter of his rural customers not being able to get service if his prices increase to cover his actual costs; it's a situation where if he raises prices he will lose his customers to his competition. (Which in all likelihood have prices for the rural customers which are in some manner "subsidized" by other customers.)
So yeah, "Survival of the Fittest" sucks if you're not the fittest, but that's life sometimes.
Doug
ALL ISPs are in the business of providing access to
the Internet. If you feel the need to rebel, then I suggest you
look at creative ways to increase revenue from your customers,My customers do not want me to "creatively" find ways to extract
additional money from them so as to cover expenses that Netflix
should be covering. Nor do they want me to subsidize Netflix
subscribers from the fees from non-Netflix subscribers. They
want to pay a fair price for their Internet that does not include
paying ransom to third parties.
Oh come on. [An aside: I really preferred when Brett kept his ranting over on another list I read, but I do find it amusing that after all these decades of running an ISP, he's finally shown up on the list where people who build ISPs talk]
We currently provide that: we guarantee each subscriber a certain
minimum capacity to the Internet exchange at 1850 Pearl Street
in Denver (to which Netflix does not directly connect) with a certain
maximum duty cycle.
That is very nice of you. Or perhaps you're actually operating a *business* and that is exactly the service you are selling to your customers. Not unlike what many other ISPs have been doing for decades now. You have arranged to bring bits from "the Internet" to your customers and vice versa. And you know that most customers won't use all of the bits they possibly could all of the time, so the bandwidth you've provisioned from your transit provider and/or peers is substantially less than what you sell to the customers, but you're careful to point out to the customers that there's no guarantee they can get all of their locally-provisioned bandwidth all of the time, and you try as you might to ensure that all of your customers get some of the bandwidth most of the time.
And of course you charge them for that service. You can't charge them for what they'd really like, because what they'd really like costs you too much to provide... and (more importantly) you're not the only game in town, and so if you charged too much, you'd have no customers at all. Funny how business works... you need to charge more than it costs you, in order to make a profit, but not so much that nobody buys at all. I seem to remember this from a basic economics class. So now we've got the baseline of what's important to you... charging a low enough price that you continue to have customers, but high enough that you don't starve. Like all small business owners before you. The guy at the local hardware store probably shares your pain.
But we can't guarantee the performance of a specific
third party service such as Netflix.
No, of course you can't. That's the great thing about the Internet... services and software comes and goes, and yet all the complications stay the same. A few years ago, the thing that made your life harder was Skype. Your very own customers went and installed software on their computers that actually sent and received data over their Internet connections that you were selling them. The gall they must have had to do such a thing!
Suddenly, your infrastructure was being asked to carry real-time audio and video streams, when before the design assumption was that such a thing wouldn't happen. And it was being asked to carry bits to and from your customers that were indexing the location of other Skype users that weren't even your customers! Oh no! But, as has happened before and would happen again, your customers simply expected to be able to install software that uses the Internet.
Sure, it made your life harder, just like when YouTube showed up and your customers started to get emails from their friends about cat videos. Videos! Huge amounts of bandwidth wasted on cats, when a simple text posting to Usenet about one's cat would have sufficed.
Not that you didn't try... you tried updating your policies, adding things like "we prohibit the use of the Slingbox on residential connections" when another new way to use one's Internet connection showed up in the marketplace... But it wasn't entirely successful...
So you complained, and complained, and complained about how your customer's usage of the Internet had changed... not because it was going to stop YouTube, or Skype, or Napster, or anything that had come before or would come in the future... but because it made the world more aware of the plight of a small business owner who wanted to not charge his customers more than the competition was charging, but who also had high costs because of where and how he chose to do business.
That's right. Nobody forced you to establish your ISP in Laramie, or has prevented you from raising funding and trenching fiber right to your doorstep. In fact, as you have repeatedly pointed out, large ISPs have economies of scale , including networks that are conveniently close to major peering points, and enough traffic to attract the attention of CDNs that wish to place content closer to them... so I guess the real question is: who forced you to keep your ISP small and local, instead of growing it into a major national or international player? My guess: Nobody but you yourself made that decision.
Smaller competitors almost always are forced to compete on dimensions other than those that economies of scale bring... I'm sure there's a small handcrafted furniture shop in Laramie, and I'm sure their furniture costs a lot more to make than what Wal-Mart is buying from their Chinese supplier. That was their choice... to start and run a business that can't take advantage of economies of scale and leverage that their competition has, because they've deliberately chosen to *not* grow that way. Adopt their mindset, take a deep breath, and maybe you'll enjoy being a local small business owner, instead of someone the entire universe is apparently trying to crush.
If Netflix wants us to do that,
it is going to have to pay us, as it pays Comcast.
Have you considered that maybe Netflix doesn't want to do that? Maybe they really just don't care if performance to your customers is guaranteed. Maybe that's because they know your customers are already so used to being hobbled by other restrictions on the use of their Internet service that they figure they won't care about Netflix performance. Maybe it is because they have millions of other customers who they can solve performance issues from more efficiently by improving performance to major carriers. Maybe they just haven't gotten around to your ISP yet. Maybe they hate Wyoming.
That's their business. You want them to pay you, grow your ISP into something they care about.
That's only fair,
because we would be doing something special just for it -- something
which costs money.
You're free to make infrastructure improvements that improve your customers' ability to access Internet services whenever you like. Or to fail to do so... and see if they like you enough to not switch to the competition who has.
Me, I can't wait until Google Fiber shows up in your town.
If Netflix tries to use its market power to harm ISPs, or to smear
us via nasty on-screen messages as it has been smearing Verizon, ISPs have
no choice but to react.
Oh brother... another "reaction" to yet another novel use of the Internet that you didn't originally design your ISP to handle. Have you considered just doing the engineering instead of complaining?
One way we could do this -- and I'm strongly
considering it -- is to start up a competing streaming service that
IS friendly to ISPs. It would use the minimum possible amount of
bandwidth, make proper use of caching, and -- most importantly --
actually PAY Internet service providers, instead of sapping their
resources, by allowing them to sell it and keep a portion of the fee.
This would provide an automatic, direct, per-customer reimbursement
to the ISP for the cost of bandwidth. ISPs would sign on so fast
that such a service could BURY Netflix in short order.
I wish you luck with this venture. You would undoubtedly learn a lot about the costs Netflix has experienced while gaining the right to stream (and now create) content that users want to see.
But since complaining about the latest thing is so much easier, I expect we'll see a lot more of that instead of this service.
Matthew Kaufman
ps. Please read my background before claiming in your response that I don't know anything about {starting and running a small ISP in the early 1990s, operating a nationwide ISP/CLEC and associated backbone with significant peering, owning and operating a wireless ISP, peer-to-peer content delivery, video CDNs, Skype}
ALL ISPs are in the business of providing access to
the Internet. If you feel the need to rebel, then I suggest you
look at creative ways to increase revenue from your customers,My customers do not want me to "creatively" find ways to extract
additional money from them so as to cover expenses that Netflix
should be covering. Nor do they want me to subsidize Netflix
subscribers from the fees from non-Netflix subscribers. They
want to pay a fair price for their Internet that does not include
paying ransom to third parties.
Why should Netflix be covering those expenses? Your customers
asked for the content from Netflix. They paid you to deliver it and they
paid Netflix for the content.
You are in the delivery business.
Now, if you didn't charge your customers at all and charged all the
content providers, instead, a la the way it is done with various shipping
companies where $BOX_STORE pays the shipping company to deliver
their product and bills the customer separately for shipping (or builds the
cost of shipping into the price), then no problem.
However, that's not what you want.
You want to double dip. You want to charge your customers to deliver
the bits they ask for from Netflix (and everyone else), then turn around
and ask Netflix (and possibly others) to also pay you for the same delivery.
It would be like FedEx or OnTrac taking money from Amazon for a shipment
and then showing up at my house and asking me to pay extra or they won't
give me my package.
We currently provide that: we guarantee each subscriber a certain
minimum capacity to the Internet exchange at 1850 Pearl Street
in Denver (to which Netflix does not directly connect) with a certain
maximum duty cycle. But we can't guarantee the performance of a specific
third party service such as Netflix. If Netflix wants us to do that,
it is going to have to pay us, as it pays Comcast. That's only fair,
because we would be doing something special just for it -- something
which costs money.
OK, so what's the problem? If I were Netflix, I probably wouldn't pay you,
either. I'd suggest to any customers we had in common that they seek out
a provider that was willing to build a better network.
If Netflix tries to use its market power to harm ISPs, or to smear
us via nasty on-screen messages as it has been smearing Verizon, ISPs have
no choice but to react. One way we could do this -- and I'm strongly
Sorry, but explaining to the user that the reason their content isn't working as
well as it should is because there is insufficient bandwidth from their ISP to
Netflix is a simple statement of fact, not a smear campaign.
Don't like it, build a network better suited to your customer's demands.
considering it -- is to start up a competing streaming service that
IS friendly to ISPs. It would use the minimum possible amount of
bandwidth, make proper use of caching, and -- most importantly --
actually PAY Internet service providers, instead of sapping their
resources, by allowing them to sell it and keep a portion of the fee.
Go for it! If you can compete with Netflix on price and quality of content
and user experience, you might succeed and you might even put them out
of business. That's great for everyone. I suspect, instead, that you'll get a
pretty quick lesson in economics, but I encourage you to try because it
can't possibly harm me if you do so and there's good upside for me if you
somehow succeed.
This would provide an automatic, direct, per-customer reimbursement
to the ISP for the cost of bandwidth. ISPs would sign on so fast
that such a service could BURY Netflix in short order.
ISPs might sign on, but what about their customers? Why would the
customer want to pay what that service is likely to cost?
Or do you think you can bury Netflix without customers signing up?
Owen
Owen DeLong wrote:
And now they pay to pump bits out from their servers to their customers. What's your point?
Doug
Yes, Netflix did pay the postage for shipping CDs out of the fee you
paid them.
However, the mailman drove over roads provided and maintained by
taxpayers to place that CD into a mailbox that you bought, owned, and
maintained. If the glut of CDs had required bigger postal vehicles,
then Netflix would not have bought bigger vehicles for the postal
service. If the CD didn't fit in your mailbox, then Netflix would not
have paid for a bigger mailbox for you.
-DMM
Because that was the contract you had with Netflix. Did you also pay the post office to bring the DVD to you? (To the best of my knowledge,
Netflix never shipped CDs)?
Yes, if you pay Netflix to pay the delivery charges, I have no problem with them paying your ISP. However, in this case, you're paying your ISP, so Netflix shouldn't have to. My point is your ISP shouldn't get to double-dip.
Owen
FCC Counsel Jonathan Sallet spoke at the USA-IGF today - I've pulled it
out as a clip
https://new.livestream.com/internetsociety/igf-usa-2014/videos/56799195