Netflix Now Supports Charter Merger After ISP Promises Not To Screw Up The Internet...For A Measly Three Years

from the promises-with-expiration-dates dept

Charter Communications is desperately trying to avoid the same fate that befell Comcast's doomed acquisition of Time Warner Cable. As noted recently, Charter hired long-standing net neutrality advocate Marvin Ammori to craft its promise to adhere to (most) of the FCC's new net neutrality rules for three years, regardless of whether the rules are overturned in court. Charter's also promising to avoid the implementation of usage caps and overages during that same time period, something most ISPs are hungrily eyeing in order to protect legacy TV revenues from Internet video.

But Charter's also now taking things one step further. In a new filing with the FCC, Charter declares the company will avoid screwing up the Internet for a whopping total of three years, and provide free interconnection to any large content or transit provider that adheres to certain traffic load and point of presence (POP) criteria. Three years obviously will go by in a flash, and the laundry list of criteria is long, giving Charter ample room (like any good merger condition) to wiggle over, under and around a notable chunk of the promise.

Still, the promising was enough to make Netflix happy, the company stating in their own filing with the FCC that getting free interconnection for three years was enough for them to be willing to sign off on the industry's latest mega-merger:

"This new policy and the commitment to apply it across the ‘New Charter’ footprint is a substantial public-interest benefit and will support scaling the Internet to meet consumers’ growing demand for online services and help foster continued innovation across the Internet ecosystem. Accordingly, Netflix supports the proposed Charter Time Warner Cable transaction if it incorporates the merger condition proposed by Charter."

If you recall, Netflix and transit operators have spent the last two years accusing last mile ISPs of intentionally letting transit points degrade in order to kill settlement-free peering and force Netflix into costly new direct interconnection deals. The problem is since both sides keep these business deals aggressively private, there hasn't been enough hard data to prove it (even though we're getting closer). Regardless, the mere threat of real net neutrality rules (you remember, the rules that were supposed to destroy the Internet) appear to have put the kibosh on a large chunk of this ugly infighting.

Needless to say, Netflix's approval appears to have come relatively cheap, but real consumer advocates I've spoken to are far from impressed with the three year window on any of Charter's promises, even with Ammori's involvement. As such they're pushing hard to either have the condition length extended significantly (five years or higher) or blocked altogether, since promising to play nice isn't worth all that much if your promise has an expiration date. It's worth reminding readers that while Charter's whispering sweet nothings in the ears of regulators and Netflix, it's simultaneously suing to destroy the FCC's new neutrality rules, ensuring that there's no mechanism in place to police Charter once the promised window for good behavior closes.

Filed Under: acquisition, deals, fcc, interconnection, peering
Companies: charter, netflix

Forget The FCC: Should We Be Looking To The FTC To Save An Open Internet?

from the that-could-be-something dept

Nearly all of the focus on the big net neutrality fight of the summer has been on the FCC. This makes sense, since the FCC regulates internet and phone access providers, and that's where this battle is. The small bits of focus that go beyond the FCC seem to move only over to Congress, and the question of whether or not it would push some sort of legislation that would mandate the FCC do something different. But, the problem is that Congress simply won't do anything on this (the issue is too partisan and too toxic) and the FCC appears to be similarly constrained, mainly by a chronic lack of backbone, combined with the ever present revolving door between the FCC and the telco/cable companies they "regulate" (a problem we've been reporting on for years). The FCC could do some things, but just doesn't seem motivated to (yet).

However, it seems that another option that gets no attention at all might be having the FTC, rather than the FCC, rescue the open internet and put the big broadband players in their space. The Federal Trade Commission has a fairly broad mandate to protect consumers, and while there are times that I worry its crusading can go a little far, for the most part, it really does seem to do a good job figuring out ways to step in where other parts of the government are failing to protect the public and innovation. While Congress and the USPTO are still failing to do anything useful about patent trolls, the FTC has been looking for ways to combat trolls for a few years. The FTC has also gone to bat for innovative companies stymied by local regulations, including Tesla and Uber. Over at the Disruptive Competition blog, Glenn Manishin has a great post about the FTC's "competition advocacy" and how important it is in a variety of markets.

It seems like the FTC can -- and perhaps should -- get involved in the net neutrality fight. In fact, in many ways, it may be a much better fit, in part because it could pretty easily justify getting involved at a few key juncture points. First, it could easily jump in on the current interconnection disputes, which appear to be where the real fight is happening these days (and it's an area which the Tom Wheeler FCC is insisting is "separate" from the net neutrality fight, even though it's really not). The interconnection fights have been a way for the big broadband providers to get everything they want without "technically" violating the concept of net neutrality on the last mile. The link above describes this if you haven't paid close attention to the differences between the fight over discrimination on the last mile and with interconnection.

But the key issue with the interconnection fights, as we were just explaining, is that the the broadband players are simply failing to deliver to end users what they sold them -- and that's a classic example of the situations where the FTC normally steps in. Customers of broadband providers are paying them to deliver the content they request over the internet, and the broadband providers are purposely not delivering that content at a quality level they have promised to provide. It seems like a situation where the FTC might easily step in and point out that broadband providers made commitments to customers that they have failed to deliver.

A second area where the FTC could have an impact is in the arena of competition advocacy to get around local barriers to competition. As we've discussed at length over the years, the big broadband players have worked incredibly hard to ban competition at the local level, often in egregiously offensive ways, including (but not limited to) total bans on municipal broadband in 20 different states -- even as many (though, certainly not all) municipal broadband projects have shown tremendous success, and with that success comes better broadband.

While Tom Wheeler has indicated that the FCC may step in to preempt state laws that block competition, the FTC can start taking action on that as well, putting pressure on states and cities, as it's done with things like Uber and Tesla. Furthermore, it seems that if broadband providers like Verizon are going to make use of common carrier rules in order to get subsidized access to rights of way such as conduits and electrical poles (while trying to stay free of the exact same rules for the same services they run over those lines), the very least they can do is let others get access to the same opportunities.

At the heart of all of this is anticompetitive practices by the big broadband players, and that's exactly where the FTC is supposed to step in and do something. To be fair, the FTC has explored this issue in the past, and some in the FTC have suggested they should take a larger role in the process. And, in the meantime, there are clear pros and cons to an FTC approach rather than an FCC one (including the lack of a specific ability to outright ban discriminatory practices) -- but with a weak FCC and a nearly impotent Congress on this issue, it seems like getting the FTC ramped up and involved in this issue might actually lead to better long-term results.

Filed Under: antitrust, competition, fcc, ftc, interconnection, muni broadband, net neutrality, open internet, peering
Companies: at&t, comcast, verizon

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.

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.

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.

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.

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.

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.

Filed Under: broadband, disputes, double charging, interconnection, net neutrality, peering, streaming
Companies: netflix, verizon

Google Fiber: You Know How Comcast Is Making Netflix Pay Extra? We Don't Do That Kind Of Crap

from the good-for-them dept

The folks behind Google Fiber have fired a not-so-subtle shot at Comcast and Verizon for their recent efforts to make companies like Netflix pay extra. As we've noted, the big last mile access broadband access providers have realized that they can effectively get companies to pay twice by clogging certain points in the network. Even more nefarious, they're able to do this without violating a narrow view of "net neutrality" because net neutrality is focused on the last mile, rather than interconnection and peering. It's a really scammy process, which is part of those big broadband providers' attempts to extract monopoly rents out of their control over the last mile.

Google Fiber has stayed out of this debate for a while, but just fired a clear shot in the fight, with a blog post that never mentions Comcast, but more or less screams: You know that bullshit that Comcast and Verizon are pulling? We don't do that. Instead, they note two important things: (1) contrary to the claims of Comcast, online video traffic is in no way overwhelming the network, and (2) it's easy to help upgrade the setup for Netflix and others for free:

We have also worked with services like Netflix so that they can ‘colocate’ their equipment in our Fiber facilities. What does that mean for you? Usually, when you go to Netflix and click on the video that you want to watch, your request needs to travel to and from the closest Netflix data center, which might be a roundtrip of hundreds or thousands of miles. Instead, Netflix has placed their own servers within our facilities (in the same place where we keep our own video-on-demand content). Because the servers are closer to where you live, your content will get to you faster and should be a higher quality.

We give companies like Netflix and Akamai free access to space and power in our facilities and they provide their own content servers. We don’t make money from peering or colocation; since people usually only stream one video at a time, video traffic doesn’t bog down or change the way we manage our network in any meaningful way — so why not help enable it?

But we also don’t charge because it’s really a win-win-win situation. It’s good for content providers because they can deliver really high-quality streaming video to their customers. For example, because Netflix colocated their servers along our network, their customers can access full 1080p HD and, for those who own a 4K TV, Netflix in Ultra HD 4K. It’s good for us because it saves us money (it’s easier to transport video traffic from a local server than it is to transport it thousands of miles). But most importantly, we do this because it gives Fiber users the fastest, most direct route to their content. That way, you can access your favorite shows faster. All-in-all, these arrangements help you experience the best access to content on the Internet — which is the whole point of getting Fiber to begin with!

So, what's Comcast and Verizon's excuse?

Filed Under: buffering, google fiber, interconnection, peering, streaming
Companies: comcast, google, netflix, verizon

Netflix Exploring Peer-To-Peer Delivery Just As Spotify Gets Ready To Kill Its Peer-To-Peer Streaming

from the moving-in-opposite-directions dept

From the very beginning of peer-to-peer content delivery, people have pointed out the many advantages it provides to just offering content from a single central source. It's more resistant to overloading, can more efficiently route traffic, makes better use of bandwidth and a variety of other useful things as well. So, it was a bit of a surprise a few weeks ago to hear that Spotify -- whose service was built from the beginning using peer-to-peer technology -- was actually moving away from that model and towards a centralized source run entirely by the company. Even more interesting is that the largest example of a content service that had always focused on a centralized source, Netflix, is now looking to go in the other direction, and is exploring peer-to-peer delivery of its video content.

This might just be a "the grass is always greener..." kind of situation, but it does seem inherently odd that just as one of the largest peer-to-peer setups is moving away from that structure, an even larger player is potentially moving towards it. Of course, part of the issue may have a lot to do with Netflix's ongoing fight with broadband providers (mainly Comcast) who want them to pay extra. Netflix recently got into a bit of a blogging battle with Comcast in showing why Comcast is trying to charge Netflix for access to its users, noting that this is entirely different than paying transit networks, which charge for transit, not access. Comcast replied lamely that this is really about Netflix trying to get all internet users to pay for its costs of doing business.

First of all, Comcast is clearly wrong about that. What Comcast is being dishonest (shocking, I know...) about is that even though it charges users for a broadband connection, it doesn't expect them to actually use that connection so much. Comcast's problem with Netflix is that it actually gets users to use the broadband line they bought. So, rather than admit that Comcast's business model has always been based on lying to consumers in telling them they bought bandwidth it never really wanted to sell them, Comcast is trying to get Netflix to rebuy the bandwidth consumers already bought in order to access those consumers.

Given that, it's no surprise Netflix has a new interest in P2P technology -- because part of the basis of P2P is making use of the underutilized bandwidth that consumers paid for, but which they never use. So, in effect, Netflix's move to P2P is an attempt to hit back at Comcast, by pushing consumers to actually use more of the bandwith they'd paid for and never used, and do it in a way that makes it look less like it's all coming directly from Netflix.

Spotify, on the other hand, while it uses a fair amount of bandwidth, doesn't use nearly as much as Netflix, and thus sees some benefits in better controlling the overall connection experience, by serving up all the content directly. Though, I would imagine it would be smart on Spotify's part not to throw away all that P2P code. If Spotify continues to grow, it won't be long until it faces a "Netflix/Comcast" moment of its own -- and having that P2P setup in its back pocket can only help in those negotiations.

Filed Under: broadband, broadcasting, content delivery, interconnection, peer to peer, peering, streaming, trafffic
Companies: comcast, netflix, spotify

France Telecom Accused Of Holding YouTube Videos Hostage Unless It Gets More Money

from the more-peering-disputes dept

An interesting post from broadband news reporter Dave Burstein argues that anti-trust regulators in France may have basically enabled France Telecom to hold YouTube videos hostage unless Google backbone partner, Cogent, pays more money:

Millions of French netizens discover their YouTube streams sputter and die or never begin in the first place. Other video services, including TF1, are also struggling. The effect varies, sometimes randomly and sometimes by time of day. Respected consumer organization UFC-Que Choisir found between 20% and 50% of users surveyed online had problems.

Again, the existing connection remains and much of the traffic gets through. But Net traffic always grows and without regularly adding additional capacity many - not all - streams are blocked. French networks, with France Telecom in the lead, are refusing to accept growing traffic from Cogent, a major backbone carrier that services Google. They demand payment to accept all the streams their customers request. The independent French competition authority (Autorite de la concurrence) on September 20 approved the charging plan, leaving no doubt this is neutrality dispute.

The details suggest that this isn't so much a "neutrality" issue as a peering dispute. In fact, it actually sounds somewhat similar to the Level 3 / Comcast dispute from a few years back. In that case, Level 3 was providing service to Netflix, and Comcast worried about the big influx of traffic. Comcast (like France Telecom) demanded that Level 3 pay up for delivering it extra traffic. The bit that's interesting here is that French regulators got involved and said that this was legal in this case, though they're worried about the lack of transparency.

Of course all this does is show, yet again, how the internet's interconnectivity through peering arrangements is increasingly under pressure as certain broadband players become more powerful. And, unfortunately, the public (and their YouTube videos) may be at risk.

Filed Under: content, disputes, france, net neutrality, payment, peering, youtube
Companies: cogent, france telecom, free, google, youtube