33 Years of the Digest ... founded August 21, 1981Copyright © 2014 E. William Horne. All Rights Reserved.The Telecom Digest for Dec 31, 2014
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| In the great fulfillment we must have a citizenship less concerned about what the government can do for it and more anxious about what it can do for the nation. - Warren G. Harding |
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| Date: Tue, 30 Dec 2014 09:48:57 -0500 From: Fred Goldstein <fg_es@ionaryQRM.com> To: telecomdigestsubmissions.remove-this@and-this-too.telecom-digest.org. Subject: Re: Verizon says it will charge NetFlix no matter what the FCC decides Message-ID: <m7ue02$89d$1@dont-email.me> On 12/29/2014 12:26 PM, David Scheidt wrote: > John Levine <johnl@iecc.com> wrote: > :>Netflix is already paying various ISPs to ensure that its customers > :>get a decent streaming experience, including Verizon, Time Warner > :>Cable, Comcast and AT&T, but the company has voiced its concerns more > :>than once regarding these payments, urging the FCC to look into these > :>agreements. > > :Why is that bad? I am not a Netflix customer. Why should I subsidize > :my neighbors who all want to watch Game of Thrones at the same time? > > You already do. Verizon, Comcast, et al. have the internal network > capacity to deliver the content to their customers. What they lack is > the interconnect with the networks of content provider. They simply > want to be paid twice for doing one job. They want their customers to > pay them for being able to use the internet, and then they want > content providers to pay them for being able to deliver that content > to ISP's customers. Nice work, if you can get it, but not exactly > honest. > While Verizon FiOS has rather high capacity, that is the exception that proves the rule, not the general case. Internet services were not built to replace Cable TV. High-quality video takes orders of magnitude more capacity than most other Internet applications. So expanding the network to support them can be a big deal, not just a bigger cord at the interconnection point. This is the "but the network is there, my Blue Box call didn't cost them anything" argument. The short-run incremental cost of any one unit of demand tends to be zero, unless it hits the next incremental point and becomes very high. Hence costing and pricing tend to smooth out the curves and use averages. Netflix is attempting to game the system. If you or I called up Verizon and demanded a 10 Gbps free service to your house because you're the coolest kid on the block and everybody else wants to connect to you, they'd laugh you out. You want service, you pay. Netflix doesn't want to pay for their connections. It's that simple. They are abusing the Internet and bleating about "neutrality" to try to destroy it in order to make it into their private Cable TV domain, regulated for their benefit. |
| Date: Tue, 30 Dec 2014 12:25:41 -0500 From: Bill Horne <bill@horneQRM.net> To: telecomdigestsubmissions.remove-this@and-this-too.telecom-digest.org. Subject: Re: Verizon says it will charge NetFlix no matter what the FCC decides Message-ID: <20141230172541.GB18562@telecom.csail.mit.edu> On Tue, Dec 30, 2014 at 09:48:57AM -0500, Fred Goldstein wrote: > On 12/29/2014 12:26 PM, David Scheidt wrote: >> John Levine <johnl@iecc.com> wrote: >>>> Netflix is already paying various ISPs to ensure that its >>>> customers get a decent streaming experience, including Verizon, >>>> Time Warner Cable, Comcast and AT&T, but the company has >>>> voiced its concerns more than once regarding these payments, >>>> urging the FCC to look into these agreements. >>> Why is that bad? I am not a Netflix customer. Why should I >>> subsidize my neighbors who all want to watch Game of Thrones at >>> the same time? >> You already do. Verizon, Comcast, et al. have the internal network >> capacity to deliver the content to their customers. What they lack is >> the interconnect with the networks of content provider. They simply >> want to be paid twice for doing one job. They want their customers to >> pay them for being able to use the internet, and then they want >> content providers to pay them for being able to deliver that content >> to ISP's customers. Nice work, if you can get it, but not exactly >> honest. > While Verizon FiOS has rather high capacity, that is the exception > that proves the rule, not the general case. Internet services were > not built to replace Cable TV. High-quality video takes orders of > magnitude more capacity than most other Internet applications. So > expanding the network to support them can be a big deal, not just a > bigger cord at the interconnection point. IMNSHO, the general case is that home users have high-speed connections that can handle the load of a single video stream. If Verizon expected its customers to use only a tiny fraction of that capacity during a time when new services, ideas, and methods were popping up every hour, then I think the company deserves to suffer: Verizon is, after all, in the business of predicting consumer and business demands for its "shared use" products, and has over a century of experience in finding ways to meet those demands. Remember that Bell Labs scientists invented many of the statistical models which are used to predict the behavior of emerging markets! Leaving aside the definition of "high quality video", I'll point to youtube, to facepage, and to all the other online diary sites which welcome images, plus iTunes, Amazon, etc. How come that demand (which includes video transfers) can be met, but not NetFlix's load? Is it because Apple paid up? Youtube? Facepage? Amazon? Somehow, I doubt it: Netflix is small enough to pick on, and therefore we're witnessing a corporate-sponsored shadow play. > This is the "but the network is there, my Blue Box call didn't cost > them anything" argument. The short-run incremental cost of any one > unit of demand tends to be zero, unless it hits the next incremental > point and becomes very high. Hence costing and pricing tend to > smooth out the curves and use averages. I disagree with your premise: Blue Box calls not only didn't cost "Ma Bell" anything, they made money for her! After all, the method used was to dial an 800 number and then trick the network into rerouting the call - but when the diverted connection was completed, the company that had the 800 number WAS CHARGED FOR THE CALL! In other words, Blue Boxes always caused harm to innocent third parties - the 800 number owners - and their use was, for that reason, an inherently criminal act. The "short-run" cost was borne by corporate entities, at the current tariffed rates for "800" calls, so it was NEVER zero. That might seem a small matter, unless we consider that the underlying method did not create an incentive for Ma Bell to fight Blue Box fraud: she was, after all, getting paid! In that respect, the pheepers were acting as employees of the phone companies, since they generated revenue for those firms. In like manner, there is a division of interest between Verizon's customers and the corporation vis-a-vis "High speed Internet" services, since Verizon seems to resent actually being asked to serve a "Sunday afternoon load" when it priced its services at fixed rates to attract consumer-grade customers. I think the capacity is there. Verizon's claims boil down to "We didn't see this coming", and to wishful thinking about the good-ol-days when every regulatory agency rubber-stamped every rate increase. Those days are gone, and Verizon's corporate culture can't adapt to a world where there are other providers and other competitors. It's not the "blue box" argument - it's the "We're the phone company!" claim. > Netflix is attempting to game the system. If you or I called up > Verizon and demanded a 10 Gbps free service to your house because > you're the coolest kid on the block and everybody else wants to > connect to you, they'd laugh you out. You want service, you pay. > Netflix doesn't want to pay for their connections. It's that > simple. They are abusing the Internet and bleating about > "neutrality" to try to destroy it in order to make it into their > private Cable TV domain, regulated for their benefit. Sorry, and no offense, but I feel you're being overly simplistic. Netflix is relying on its customers to pay for the transport layer, it's true - but every Internet user pays for the transport layer, and Verizon is trying to have their cake and eat it too, by crying "No fair!" when one service doesn't cut them a check for the privilege of being successful. Verizon is already getting paid, AFAIK, and just because the corporation doesn't want to adapt doesn't mean I'm willing to foot the bill. Verizon wants to live in an "as if" world: a world where every data transfer required a separate pair of wires, and those with more data to move had to pay more. Verizon is acting as if it's entitled to deny the changes the Internet has brought to the telecommunications business, and in addition, to act as if it is entitled to change tolls for a bridge that was designed at taxpayer expense, built with private funds, and is being lawfully operated (with occasional backups, I admit). Verizon isn't willing to add any extra lanes, only to demand that motorists pay them extra because they used to run the only ferry. Bill -- Bill Horne (Remove QRM from my address to write to me directly.) |
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