Verizon Public Policy on Netflix

Matt Palmer mpalmer at
Fri Jul 11 02:45:02 UTC 2014

On Thu, Jul 10, 2014 at 09:40:13PM -0400, Miles Fidelman wrote:
> Jimmy Hess wrote:
> >On Thu, Jul 10, 2014 at 8:12 PM, Miles Fidelman
> ><mfidelman at> wrote:
> >>Randy Bush wrote:
> >[snip]
> >>At the ISPs expense, including connectivity to a peering point. Most content
> >>providers pay Akamai, Netflix wants ISPs to pay them. Hmmm....
> >Netflix own website indicates otherwise.
> >
> >
> >"ISPs can directly connect their networks to Open Connect for free.
> >ISPs can do this either by free peering with us at common Internet
> >exchanges, or can save even more transit costs by putting our free
> >storage appliances in or near their network."
> From another list, I think this puts it nicely (for those of you who
> don't know Brett, he's been running a small ISP for years

I've got to say, I'm not overly impressed by his commentary.  It's vague and
non-specific, and doesn't provide any meat by which an impartial observer
could judge the claims.  Hell, I'm a partial observer in *favour* of the
little guy, and I'm underwhelmed.  The thoughts that come to mind are

> --------
> Netflix generates huge amounts of wasteful, redundant traffic

I agree that most movies and TV shows aren't worth watching, but that's a
value judgment.  "Redundant" perhaps, since everyone who watches the show
gets their own stream, but unless your network is entirely multicast-ready,
you're not exactly free of blame...

Have you attempted to reach out to Netflix to discuss the concerns you have
about the inefficiency?  What was the response?

> and then
> refuses to allow ISPs to correct this inefficiency via caching.

In what ways do they "refuse" to allow ISPs to cache?  I can imagine that
they don't like caching run by other people, because they can't control how
well that caching is run (the charitable interpretation) or they don't get
all of the eyeball data when data is cached (the more likely
interpretation).  Do they refuse to send traffic to your AS if they discover
you caching their content?  They'd actually be well within their rights to
do so (on the principle of "their network, their content, their rules"),
that seems implausible.

> It fails to provide adequate bandwidth for its traffic to ISPs' "front
> doors" and then blames their downstream networks when in fact they are
> more than adequate.

I'd be interested in seeing more data regarding this assertion.  If your
links aren't congested, and you're not buying transit that is congested
somewhere upstream, the only remaining point of congestion would be
somewhere inside Netflix.  I'm not saying that isn't what's happening, but
assuming that the entire Internet (or everyone who's getting Netflix bits
out of the same upstream of Netflix) isn't seeing problems, then the problem
inside Netflix seems...  optimistic.

> It exercises market power over ISPs (one of the first questions
> asked by every customer who calls us is, "How well do you stream
> Netflix?")

OK, they're popular.  Are you advocating for a limit on how large a portion
of a market a single company is allowed to service?

The bit of this sentence that I find implausible is the idea that customers
are sufficiently aware of quality of service issues to ask questions before

> in an attempt to force them to host their servers for free

These are the OpenConnect caching boxes, I assume?  If that's the case, it's
incorrect to say that Netflix "refuses to allow [...] caching", simply that
they prefer to provide caching their way.  As it stands, I don't see the
problem with running Netflix cacheboxes instead of your own -- if you *were*
running the cache, you would presumably need to pay for hosting anyway (and
also machines), so I'm not sure how OpenConnect is worse.  If there are 
reasons why OpenConnect boxes *are* inferior to some other solution (such as
if they take up 20 times the power and space of an equivalent caching
solution), then those are what need to be talked about.

> and
> to build out network connections for which it should be footing the bill. 
> (Netflix told us that, if we wanted to improve streaming performance, we
> should pay $10,000 per month for a dedicated link, spanning nearly 1,000
> miles, to one of its "peering points" -- just to serve it and no other
> streaming provider.)

Is this simply because there is no "common Internet exchange" closer to
Laramie, Wyoming?  If so, then all I can say is that it sucks to be running
a service in a remote part of the world, but you can hardly blame Netflix
for that.

> We tell prospective customers that we provide a guaranteed amount of
> capacity for them to the nearest major Internet hub.

I'd be interested to see a more detailed description of this situation --
where Lariat *does* have interconnection presence, and how "major" that
"major Internet hub" is.  If Netflix is, indeed, ignoring a major
interconnect point, then it should be pretty easy to make that case and call
"bullshit" on Netflix's claims.  As it stands, though, there's not enough
information to make any substantive assertion.

> will not build out to our ISP as it has to larger
> ones such as Comcast

Is there a similar compelling commercial benefit for Netflix to build out to
Laramie Internet Access and Telecommunications as there is to Comcast?  If
not, it would be extremely foolish (not to mentin potentially criminal) for
Netflix to spend money on that.  They're a for-profit company, they should
only spend money on things that will make them even more money.

I feel for Brett, and everyone else, running a small shop and getting the
shaft from the big kids.  I've been there, and it's no fun.  The answer,
though, is to get specific with facts and figures, and *prove* that the
claims of Netflix are bullshit, rather than continue with vague assertions. 
They're better at the "vague assertions" game than you are.

- Matt

A woman in liquor production / Owns a still of exquisite construction.
The alcohol boils / Through magnetic coils.
She says that it's "proof by induction."

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