Yes, Verizon Is At Fault In Netflix Dispute; It's Not Delivering What It Sold Customers
from the a-dose-of-reality dept
We wrote about the latest Netflix/Verizon dispute over who's to blame for poor quality movie streaming. Netflix has chosen to pin the blame on the ISPs when there's network congestion, while Verizon angrily hit back at this "PR stunt," claiming that it was actually Netflix's fault for not doing a better job routing its traffic. Except... that's not true. As we've been pointing out for the better part of a decade, this is all about the broadband companies trying to double charge. Tim Lee, over at Vox, summarizes the point nicely:Verizon's customers have paid Verizon for the service of delivering content to them. But rather than simply performing the service Verizon's customers have paid it to perform, Verizon sees an opportunity to get paid twice: in addition to charging its own customers for connectivity, Verizon hopes to also charge Netflix to deliver its content to those customers.And yes, I know that some big broadband defenders will immediately trot out the usual defense: that Verizon sold its network in a way that it never actually expected subscribers to use -- but it's difficult to see how that's everyone else's fault. If anything, it raises some questions about whether or not the FTC might want to step in and look at whether or not Verizon, AT&T and Comcast totally misrepresented what they were selling consumers.
Verizon is effectively using its own customers' poor experience as leverage. Verizon has been threatening Netflix that if they don't pay up, Netflix customers (who are also Verizon customers) will get frustrated and cancel their Netflix service. Of course, that threat is a lot more powerful because most customers don't have many alternatives to Verizon service.
As for the bullshit claim that Netflix is to blame because it sends Verizon more traffic and thus the "traffic ratios are unbalanced," well, Lee points out that this is actually Verizon's fault as well.
But this argument doesn't make sense. Verizon customers aren't just paying Verizon to send traffic to Netflix, they're also paying Verizon to deliver Netflix (and other) traffic to them. And there's no reason to think that carrying traffic from Netflix to Verizon customers is more expensive than carrying traffic in the other direction.And, of course, Verizon can squawk all it wants about this, but it's not going to change the fact that it's the problem here. Yes, Netflix delivers a lot of data. But if Verizon can't handle it, it shouldn't have sold it to consumers.
Indeed, there's a simple reason that Verizon's network receives more traffic than it transmits: that's how Verizon set it up. All of Verizon's standard FiOS packages provide dramatically more bandwidth for downloading than uploading. The entry-level service, for example, is 15 Mbps downstream and 5 Mbps upstream. The fastest package is even more lopsided: 500 Mbps downstream and 100 Mbps upstream. If Verizon builds a network that's optimized for downloading, it can't complain that its customers use it to download stuff.
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Filed Under: broadband, disputes, double charging, interconnection, net neutrality, peering, streaming
Companies: netflix, verizon
Reader Comments
The First Word
“Verizon's lawsuit speaks volumes
To quote Tyrion from game of thrones."Cutting out a liar's tongue does nothing to prove them a liar, it just fear what the 'liar' has to say".
Only, as Tyrion knew full well, the 'liar' he was referring to was actually telling the truth in the book. And Netflix is also telling the truth here.
Yet Verizon's approach to this dispute is to call Netflix a liar, and attempt to cut out their tongue by suing to get Netflix to stop blaming Verizon for the problem they created. All that'll do is get more people talking about what Netflix says Verizon is doing.
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They are hoping for the Tier 1 backbone providers to pay them to access their network when in reality, it should be the other way around. Verizon should be paying the tier 1 providers for access to their content.
Imagine if Cable TV worked this way. CBS would have to pay Comcast/Verizon to be apart of their channel lineup instead of CBS being paid for their content they provide.
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He's blaming Netflix for the actions of Verizon. I was trying to point out to him just how stupid that is by pointing out the difference between Netflix's networks and Verizon's.
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All of the above.
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In fact, Verizon requires it....
They didn't just optimize it for downloading, it is a requirement of standard ISP customer service agreements. Running a server, a computer that typically "uploads" to the internet more than it downloads, is *prohibited* by consumer ISP agreements.
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Bronze
15Mbs down*/2 Mbs up
Silver
16Mbs down*/2.1 Mbs up
Gold
17Mbs down*/2.100001 Mbs up
*Does not include packets from the following:
Netflix, Youtube, Amazon, Vimeo, Vivo, Google, Yahoo, any .com/.net/.org domains.
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I pay for an internet connection to receive the service, and Netflix would also need to pay for a connection to send it.
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I pay for an internet connection to receive the service, and Netflix would also need to pay for a connection to send it."
Verizon wants for Netflix to pay its own ISP *and* Verizon. They want for Netflix to pay twice.
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Response to: Mason Wheeler on Jun 6th, 2014 @ 11:02am
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Paid twice already
Netflix would need to pay for a connection to upload anything to customers in the first place. Correct me if I'm wrong, of course, but I can't see any way Netflix could deliver anything to anyone if it wasn't paying someone to let it do that already.
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They pay someone, to be sure, but that someone isn't Verizon (who provide consumer internet connections). They pay for their data centers' dedicated fiber lines (probably to Level 3 or other backbone internet providers). Verizon/Comcast are also shaking down Netflix for peering arrangements.
From wikipedia:
Basically two companies (Content Provider and ISP) need to fulfill the same business need (get data from content provider to the end user). The "customer" pays both businesses for the service provided, the Content Provider for the content, and the ISP for delivering it. Thus, in order to increase customer satisfaction and decrease costs all around, the two companies would setup a direct connection between the Content Provider's data center, and the ISP's backbone, minimizing the number of hops to the end user by cutting out middleman networks. This not only provides faster and more stable connections to the end user, it decreases general network congestion, as the content no longer needs to travel through other networks. For the ISP, it means lower costs, less congested networks, and higher customer satisfaction.
At least, that's how it worked historically. With what is equivalent to monopoly status, broadband ISPs don't need to worry about things like costs, service levels, or customer satisfaction. Netflix and other content providers, however, don't have the same luxury, which means either capitulating to the demands of the big cable/telcos, or watch their user base suffer and ultimately dwindle. It's like playing a game of chicken, but the other guy is driving a tank.
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In this case though, I'm tending to think maybe it's just Verizon's over-subscription model finally not paying off. Since we are talking about high bandwidth udp streams, I'm sure they are going to be dropped first and probably most often. I've never really had too many issues on my Verizon FiOS at home, but for all I know this could be a DSL user as well.
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As to who Netflix pays directly, ya, it might not be Verizon. Generally speaking, I'm treating paying whatever ISP they are as paying Verizon because Tier 1 ISP's use peering.
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...what?
http://techcrunch.com/2014/04/28/netflix-inks-peering-deal-with-verizon/
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Verizon's lawsuit speaks volumes
"Cutting out a liar's tongue does nothing to prove them a liar, it just fear what the 'liar' has to say".
Only, as Tyrion knew full well, the 'liar' he was referring to was actually telling the truth in the book. And Netflix is also telling the truth here.
Yet Verizon's approach to this dispute is to call Netflix a liar, and attempt to cut out their tongue by suing to get Netflix to stop blaming Verizon for the problem they created. All that'll do is get more people talking about what Netflix says Verizon is doing.
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Re: Verizon's lawsuit speaks volumes
http://gigaom.com/2014/06/09/netflix-to-suspend-its-controversial-isp-error-messages/
If Netflix was telling the truth and VZ lying, it kinda makes you wonder why Netflix didn't call Verizon's bluff.
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Costs
If the cost is not significantly higher, then the answer has to be that the proper infrastructure is not in place, and those customers who bought a certain bandwidth were sold a bill of goods (a lie), or there is actual blocking/filtering of packets going on.
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Cable operators have to pay a fee for the right to carry local broadcast stations under the theory that the local stations make the cable service 'more valuable'. By that same reasoning Verizon should have to pay Netflix for carrying their traffic and making Verizon's internet service 'more valuable'.
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So.. they have or could have an appropriate infrastructure and streaming bandwidth requirements are significant and customers were over-sold and there is shaping, throttling and filtering going on AND the last mile are the worst customer service crews on the planet. They're thieving money-hungry blood-thirsty vampire whores that have it all entirely backwards with zero for competition and the friends and means to keep it all rolling in their favor.
Verizon is at fault and in no small way.
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Re: Costs
In some cases, it is just a matter of running an extra line from one router to another at an exchange and configuring the connection and networks. In other cases, a new router is needed (to be fair,the routers required aren't something you can run to best Buy and get in an afternoon, but compared to the major ISP's expenses, they'd be nearly a rounding error).
See: http://en.wikipedia.org/wiki/Internet_exchange_point
Upgrading these connection has been for most of the internet's history a completely routine and expected minor expense. Up until a few years ago, most interconnections between larger networks were done as handshake deals without lengthy negotiations. When technicians who monitor this stuff saw that capacity at some connection point was getting saturated, they'd just work it out and perform the needed upgrade without fanfare.
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streaming
I'm not sure about the compression, or possible Verizon manipulation of the data, but why does Amazon have no problems streaming to my house but Netflix does?
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So in this case, because Netflix is much larger than Amazon video, Verizon is slowing down Netflix traffic in order to shake them down for more money but allowing Amazon Video through like normal. That is why you see a slow down on one and not the other.
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Hence the usual "promise" of "speeds up to..."
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Verizon customer's already paid for their service. And that service is for X amount of Bps. Verizon customers, then request Netflix service through Verizon.
As others have pointed out, other streaming works OK thru Verizon, but no Netflix.
And when some of them use VPN, violla!, Netflix works fine.
So is the magical encapuslation of VPN making Netlix packets nice and fast?!
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Yet another example of how bad trying to use IP addresses does not get you to the actual issue.
It won't be long before the Verizons of the world will pick up on this utterly stupid idea, and start to block VPN exit node IP addresses, just so you cannot get around their Netflix filter.
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Let's say Verizon's infrastructure supports 1000mbs to a specific area in which they have 500 customers that are paying for 10mbs connections. Now, if all of their customers log on at the same time and play a movie, their network becomes congested and, at best, each of their customers will get a 2mbs connection. If Netflix streaming requires 5mbs for good quality and no buffering, everyone having a problem has one because Verizon has not delivered on what they sold.
The telco's have oversold their networks not anticipating the usage that Netflix has driven their customers to.
THAT IS VERIZON'S FAULT AND THEIR PROBLEM TO FIX.
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Thanks Michael, exactly.
The problem boils down to Verizon's use of an asterisk next to their "up-to 25 mBps." They promise the customer a maximum limit of 25 mBps (like everyone else in the industry,) but rarely can they provide 2.5 mBps per customer. As others have said here, the FTC should really get involved at this point and mandate that ISPs be at least 2 standard deviations or below of their average speed, instead of pushing the maximum theoretical speed, which is all but unobtainable even in the best of conditions. This problem is only going to get worse and like their current views on cable-cutting (as in, it isn't happening in their eyes, even though everyone else knows it is,) they are going to go through a lot more canaries before they realize the air is bad.
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If you own a shuttle service and someone builds a huge shopping mall at one end, you don't bitch about the extra volume of people, you go out and buy a bigger bus.
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Netflix should not pay Verizon either, because they already paid their provider for the bandwith they use.
Verizon is trying to get paid TWICE for the same bandwith.
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Yes. While never actually delivering the bandwidth they got paid twice for.
To be fair, this is the company that's been getting government subsidies from several states for extending their infrastructure to providing universal service...then not actually extending that infrastructure.
Fraud: it's an ugly word but a very profitable business model.
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They ARE paying Verizon to deliver Netflix. Just like when you order from a retailer - you pay the retailer the cost of the goods and then you pay UPS to deliver the goods.
Everyone is confusing the issue.
The only one confused here is you.
If Netflix is having problems with its streaming service, it's not the fault of Verizon.
It is if it's Verzion's system that is slowing down the stream. Just like it is UPS's fault if your purchased goods end up in Walla Walla, Washington instead of at your doorstep.
This isn't rocket surgery here, but, I'm not surprised you fail to grasp even the basics kenichi, I've read other posts of yours...
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JS
When I call someone on my cell phone, minutes are charged to me and the called party if it's to a cell phone. When I receive a call on my cell phone, minutes are charge to me and the caller if it's from a cell phone.
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Netflix pays their ISP for access to the network, you pay for your access to the network - then you both get to communicate.
If one of the callers has "unlimited minutes", they aren't charged for the minutes they use the phone, and why should they be?
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Though that is all totally off topic. :-)
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AOL still exists, so...
The problem now is there's simply no competition.
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Fraud
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I further point you to the idea that until the court case was decided that the FCC could not regulate the internet by demanding net neutrality, none of these peering issues came up. Within a month of the ruling, Netflix started seeing problems. This is far from accidental and very much purposely staged.
This peering business isn't about throttling. It's about putting in an artificial bottleneck by refusing to update the computer connections between different parties of the internet, chosen on purpose.
When you look back at the methods that have been attempted to raise the price of the internet connections it becomes very plain where the issue is. We've all heard of the throttling of torrents supposedly to conserve bandwidth. But the red herring of bandwidth hogs is just that. Everyone is sold a package they can not exceed. You pay for a certain amount of service and you aren't getting it because it is oversold. Then there are the artificial caps attempts to once again raise the cost of internet connection by demanding you pay for a higher service.
These companies are not sinking into the business the upgrading and adding on of equipment. That costs money and takes from their profit line. They are now trying to get Netflix and later other companies to pay for it instead.
This is about over charging, triple dipping, and refusal to move into modern day usage of the internet support. Competition would remove this issue if you had choices and it is the biggest supporting reason why these ISPs need to be considered a utility instead of a data communicator.
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Now we are also the product being sold to someone else.
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The "unbalanced traffic" argument is being misused
This situation is radically different in an end-network, such as exemplified by the user distribution portions of Verizon's or Comcast's networks. As there isn't another route to the end user, the "balance" issue is moot. One could argue cost-effectiveness for e.g Netflix connecting to Boston Verizon customers in NYC versus Chicago (i.e. forcing Verizon to carry that traffic further on their own network) but not whether the traffic to the end nodes was mostly download data versus data ack's.
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Re: The "unbalanced traffic" argument is being misused
Again, nobody to blame but themselves (Comcast, Verizon, etc.) for their inadequate networks.
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I pay for bandwidth
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