Utterly Incoherent Wall Street Journal Missive Blames Netflix For, Well, Everything
from the sockpuppets-and-bogeymen dept
For years now, the broadband industry has worked tirelessly to villainize Netflix, painting the company as a bandwidth glutton, hungrily eating "more than its fair share" of Internet traffic resources. A growing assortment of fauxademics, editorial writers, consultants, revolving door regulators and other telecom sector PR tendrils have relentlessly tried to argue that Netflix is a dirty freeloader and a nasty company that is really the one to blame for most of the Internet's problems.There are several reasons for this. One, Netflix is a threat to traditional cable television revenues, and therefore is already seen as the enemy by telecom executives. Two, Netflix has replaced (now absent) Google as the leader of the corporate pro-net-neutrality movement, arguing against things like punitive usage caps. And three, telecom companies quite simply want companies like Netflix to pay them a fealty "troll toll" for doing absolutely nothing, which is the exact kind of pampered, duopolist bullshit that started the net neutrality kerfuffle in the first place.
Usually, telecom-driven missives against Netflix make at least a fleeting effort at coherent sense. But a new article by Holman W. Jenkins Jr. at the Wall Street Journal deserves a little attention for setting a new low in barely-comprehensible telecom industry puffery. As with any good Netflix attack piece, Jenkins has to begin by highlighting just how much traffic Netflix users consume:
"More than one-third of today’s expensively rolled-out bandwidth already is consumed in peak hours by a single company, whose customers represent a tiny minority—about 1.2%—of Internet users. Richard Bennett of High Tech Forum calculates: “If 12 percent of the Internet user population is streaming at prime time, the traffic load goes up to 340% of today’s level; and if it rises to 60%, the load goes up to 1700%.” And suppose users want super-high resolution 4k TV, which requires four times as much bandwidth as today’s hi-def?"Generally Netflix traffic stats are trotted out to imply that Netflix is somehow consuming too much of the overall pipe, or isn't paying its fair share to deliver this traffic, which as we've pointed out for years is total nonsense. It's quite simple: users who pay their ISP for bandwidth are requesting this data, which Netflix (who also pays for bandwidth) then sends to them. Insatiable mega-ISPs honestly believe a bigger cut of this revenue is their god-given right; as such, they work tirelessly to get it, whether it's via usage caps or interconnection fees.
And to be fair, trying to argue that massive, hugely unpopular telecom giants should be able to freely nickel and dime consumers and small companies can't be easy. Making an argument that stupid usually requires some rhetorical sleight of hand that sometimes wanders into the realm of the magical. Unfortunately for Jenkins, the best he can do is an utterly confusing screed involving backpackers and grandmothers:
"Make no mistake: The bandwidth used by Netflix is paid for. But it’s paid for inefficiently, by spreading the cost over all broadband subscribers. In the airline industry, if backpackers and grannies had to pay for the frequent connections, last-minute seat availability and other features demanded by business travelers, there would be fewer planes, fewer flights, less connectivity, less travel for everyone—which is a fair model of the future that utility regulation will now create for broadband users."It's impossible to even deconstruct that argument because it actually makes no coherent sense. One, as we've explained at length, ISPs are not now facing "utility regulation" under the new neutrality rules. Two, under the current Netflix model, ISPs are paid for the bandwidth (sometimes several times over), and customers pay for the content they want. Is it actually possible to get any more efficient than that without involving telepathy? Jenkins, however, is clearly annoyed that the government has stepped in with rules preventing the Comcasts of the world from erecting totally unnecessary tolls on the Internet:
"Unfortunately the entire confused and inane thrust of federal Internet policy lately has been to sustain the Netflix distortion. Even collecting token amounts, as Comcast did, for expanding direct peering to receive the Netflix deluge apparently now will be verboten. And forget about the elegant fix of usage-based pricing, i.e., charging each customer according to his demand on the infrastructure. It’s clearly a nonstarter with regulators and activists."Poor fellow! How does Jenkins sleep at night knowing that the government won't allow Comcast to impose completely arbitrary and anti-competitive new fees on content companies? What kind of a world are we building where we don't let companies like Comcast impose draconian, unnecessary and hugely unpopular usage caps to fatten revenues? Won't you think of the children? Why can't you people understand that Netflix is the root of all evil?
"So what does this mean? The oomph behind a regulated Internet isn’t coming from the net-neutrality philosophes. It’s coming from Netflix and its attachment to a particular pricing model for broadband...By the way, we are not stating a Netflix conspiracy theory...the fact is, regulators are trying like crazy to make the necessary broadband seem like a free lunch to Netflix customers—a short-termism that necessarily undermines the incentive of others to compete with cable’s already-paid-for infrastructure."From there, Jenkins throws around a lot of terms like it's pretty clear he doesn't actually understand "overbuilders!", makes a few bizarre, unsubstantiated claims that Netflix supports last mile broadband monopolies, and even tries to vaguely blame Netflix for AT&T and Verizon's plan to hang up on millions of DSL users (something that's long been in the works and is totally unrelated to net neutrality or the FCC's Title II push).
So Jenkins' logic is painfully murky, but I think he's trying to argue that Netflix is to blame for helpful rules that protect consumers from aggressive broadband monopolists in uncompetitive markets. He's partially right, but he's forgetting one little thing: consumers. Consumers drive the net neutrality movement. Consumers drive the refusal to accept usage caps on already-expensive broadband services. Consumers and innovators are the ones pushing for healthy markets free of gatekeeper manipulation. If Jenkins had any real courage, he'd stop attacking Netflix and attack the thing it's clear he finds truly despicable: consumer power.
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Filed Under: blame netflix, broadband, holman jenkins, net neutrality, title ii
Companies: netflix
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This is literally exactly how the airline industry actually works, what exactly is this idiot trying to claim?
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If you buy a plane ticket, you only pay for what you use. The business traveler pays more because he demands more.
For broadband, he's trying to imply that the granny would have to help cover the costs of the infrastructure build-out to accommodate Netflix's (the business traveler)bandwidth requirements, similar to how a utility pushes it's expenses off on it's entire consumer base.
I don't agree with it, but I sorta, almost, kinda get the point he is feebly and inaccurately trying to make, I think :)
It's still nonsense.
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Meanwhile the business users subscribe to unlimited fibre packages. So, again, what's his point?
The heavy usage users already pay for their heavy usage. I'm one of them in the UK and I pay 5x what a "granny" would pay so I'll use whatever I want, whenever I want and on whatever I want.
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Really? So granny buys her ticket 3 weeks in advance and pays more than the business flyer who buys his ticket at the last minute? Who knew? Business flyers pay for convenience, granny buys the cheapest ticket she can find.
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Sometimes. What's so surprising about that? Sure, that might be a rare case, but grannies and businessmen are far from the only sets of air travellers. Businessmen might travel more regularly, but in the analogy, the businessman might also be using more bandwidth than granny as well.
"Business flyers pay for convenience, granny buys the cheapest ticket she can find."
Unless granny wants the upgrade to business class, or the business flyer needs to downgrade to coach for whatever reason (including price, many people I've known - especially in startups - do this regularly).
If people want more service and features, they pay for it. But, the speed at which they get to their destination doesn't depend on the fee they paid to their airline. If people want more bandwidth and services from their ISP, they can pay for it, but their connection to their destination website should not depend on the fee their destination paid compared to its competitors.
This is shocking to you, or is the analogy so bad it's confusing us all?
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Oh, I guess that's what the cable industry actually DOES think.
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Dictionaries, please redefine "irony", because it doesn't get any better than this.
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Erm... what? Is he saying that non-business travellers don't need last minute seats, don't need connections and/or don't pay fees for doing so? Or, is he simply whining that standard class is usually cheaper than business class (because they get less)? On top of that, is he honestly saying that the entire airline industry consists of backpackers, grannies and business travellers - or is there a massive number of travellers he had to leave out to create his "point"? Don't worry, I already know the answer...
I pretty much stopped reading there. If you're going to use a flawed physical analogy, at least have a basic understanding of how the thing you're referencing works. Or don't torture it so badly that it's unrecognisable.
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I'm not defending the idiot, but there is such a thing as unrestricted versus restricted fares, and that is what he's referring too. Unrestricted fares are requested by business travelers to support last minute changes and cancellations, so they cost more. If restricted fares were not an option, then less people would fly because unrestricted fares are ridiculously expensive.
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logic learning and intelligence
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Could have just stopped there and prevented himself from sounding like a toddler complaining that other kids get cookies too.
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"But ..."
This's "Moocher Capitalism." If you can get away with the big lie slandering the honest players, you can weasel out an unearned cut of their profits with hardly any work at all on your part. Greed and laziness for hookers and blow. It's arrogant, cynical, and typical Wall St. behavior, enriching yourself while creating nothing for anyone but yourself.
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Best joke of the year. I still can't stop laughing. Netflix are perhaps the leaders in Net Neutrality Hypocrisy, but that is all.
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No, you spout nonsense and pretend you've won an argument. Shocking...
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There definitely needs to be something, but I fear the law currently fails us in this regard.
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'Punitive', thats perfect. I'm glad other companies to 'punish' me for using their product according to the terms for which I agreed and paid.
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Response to: Anonymous Coward on Sep 9th, 2015 @ 7:03am
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Re: Glenn
Infrastructure is actually quite expensive. We're rolling out fiber and we charge a $150 install up front that doesn't cover all our costs.
There is also significant maintenance and supports costs.
Not that cable companies aren't ripping you off. We're able to deliver gigabit for $30/month.
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And that's the point. Once the cost of the infrastructure has been re-cooped, which in the case of big companies was decades ago, it's a license to print money.
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Inefficient?
But, as it's the broadband subscribers that's requesting the stream from Netflix, that's EXACTLY the most efficient way to pay for it! And of course, they conveniently neglect that NetFlix does pay for it's end of the connection already, too.
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Rent, and extra rent...
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I wonder if they have considered a career change to work in organized crime
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What is significant is that for all these companies arguing for the ability to charge Netflix, and not its users, is that Netflix competes with the cable TV part of their business.
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Which is why data caps is so mind boggling greedy.
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Broadband is free whether you use 0.5GB or 50GB per month.
Get the fuck over yourself you twat.
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http://www.theverge.com/2015/1/29/7932653/fcc-changed-definition-broadband-25mbps
FTFY
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Usage based pricing
No, it's not. I've not seen any regulators or activists opposing usage-based pricing on principle, as long as it's done fairly and honestly.
The people who object to usage-based pricing are the consumers.
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Re: Usage based pricing
Or in Comcast's case charging these users an additional $30 to avoid these overages.
Nobody would oppose real value-driven usage-based pricing, since most people would probably pay $10 a month for broadband. But the industry won't offer that kind of pricing for obvious reasons.
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Let me put this straight right now!
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This, a thousand times this
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Analogy
Oh the humanity!
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What the hell?
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Re: What the hell?
Why am I reminded of the complaints about the mega-users of unlimited bandwidth on cell phones ... that even Techdirt agreed with, for the more extreme users.
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all i heard when I read this story....
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ISPs should blame THEIR OWN CUSTOMERS
If the ISPs don't like it. Then they should charge their customers a fair amount to recover the true cost to build and maintain the infrastructure to deliver that bandwidth.
Now wasn't that simple?
And if there were ever to be competition among ISPs then these prices might have some remote possibility of being fair, even if price increases were necessary.
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Takes Me Back
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Haven't We Heard This Before
Glad I could help.
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A bigger problem with his statement
Also paid for by massive government subsidies!
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Meanwhile, New York (is it?) is still waiting for them to roll it out, and when called on the outright theft they lie and scream and bitch and moan, "It's not our fault!"
Robbed via taxation to pay politicos pals for vast sums in subsidies, lax to non-existent oversight, caps on "unlimited", 3/4 of a million bucks to the likes of Sunnunu for paywalled propaganda lies preaching to the converted, and still they have the gall to accuse us and Netflix of taking advantage of them! The cable TV business must be in serious trouble. Ha, ha. Suck on it!
It beggars the imagination that they can get away with this in the USA. This is the sort of story you'd expect to read about from banana republics or the likes of Kazachstan, not the USA.
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Re: A bigger problem with his statement
A more honestly stated observation would be that 14% of N. American users* are using 35% of the peak hours bandwidth.
* 36 million American Netflix subscribers out of 260 million American internet users (or 39 out 290 if Canada is considered).
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"Usage-Based Pricing"
I'm sick and tired of this claim. That user demand on the infrastructure is at a gigabyte level. The constraints on the network aren't in the total AMOUNT of data it can convey, but in how FAST it can convey that. If I buy a switch with 10 1Gb/s ports on it, and 10 1Gb/s internet connections, I'm perfectly capable of delivering INFINITE gigabytes as long as I deliver those gigabytes at under 10Gb/s aggregate at any one time.
So, the demand put on the infrastructure, and therefore what we should base pricing on in "usage-based pricing" the ISPs want so badly is BITS PER SECOND, not TOTAL BITS TRANSFERRED.
They really need to stop lying all over the place.
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Complaining about the cost of hardware is idiocy. "Morans!" [sic]
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Also tax deductible.
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Thank the MBAs for gaining us this insight. We're in a race to the bottom, didn't you know? They learned all their insights from playing musical chairs in kindergarten. When the music stops, you need to have already grabbed onto your chair.
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That would be the opposite of fair, a completly unfair burden Amazon tax, just as the proposals about Netflix are.
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Look back at DialUp
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Competition
As with almost every broadband problem, this would be solved with strong competition. Any ISP can offer whatever pricing model they want, and if customers like it they'll sign up. If they don't, they'll go elsewhere. Prices will naturally go where they need to in order to satisfy demand, and the customers can all be happy. Only problem is the ISPs would no longer have a source of obscene profit margins.
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News Corp, Our Information Overlords
As a victim of Time Warner Cable, I might as well have been reading nonsense with that hated company as the by-line instead of Holman W. Jenkins. It's corporatocracy at work. Lie to the customer. Gouge the customer. Screw the customer.
Neo-Feudalism in action.
Cable TV is over. Customer retribution for decades of abuse is here. We get what we want. Deal with it or sell off your crap companies to someone who considers the customer to be a collaborator, not an enemy.
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Consumers chose to spend their money elsewhere.
In the same vein I've seen an increasing number of articles in the past 3 years essentially saying the same thing: Internet "killed" the economy basically it's more efficient.
They're arguing that Netflix did with ~2.1K employees what Comcast couldn't do with ~139K. And that those jobs aren't coming back...
As if somehow Comcast wouldn't fire the other 118K people if it could have done what Netflix did.
It all leaves a bad taste in my mouth; either that or the tuna & pickle sandwich I just had... :P
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