Verizon Public Policy on Netflix

Fri Jul 11 09:27:17 UTC 2014

> Would it be right if Netflix comes to You and says we see you've got a lot of our customers hooked up to your backbone so to serve better service we'd like to connect to your network directly.

Yes. As an eyeball network operator I pay my transit provider to get
the packets my customers want to me. Content providers pay their
transit providers to get their packets to my customers. If there is a
way we can cut out the transit provider, why wouldn't we?

> And Netflix goes: well how about you build the link to us bearing all the costs and you gonna charge us nothing for the transport you provide, deal?

This isn't exactly how it goes though. Netflix are able to peer at
around 25 locations in the US. The chances of a large ISP not having
at least one common point are pretty slim.

So then it goes down to an interconnect cost across a building. I'm in
the UK, and I know the price that we pay is not very much at all. I
wouldn't be surprised if Netflix were willing to split the cost of
this link.

Then we are down to port costs. These days a 10G port costs very
little indeed. And of course the larger you are, the more buying clout
you have, the less it costs. Combined with the fact that you are
taking traffic off your transit connection, therefore paying a smaller
bill, it is very likely that this will work out in a profit situation.

> c) You could not give a damn about your customers as they have nowhere else to go anyways and use this advantage to force Netflix to become your customer (well paying customer as they would need big pipes).

This appears to be what Comcast, Verizon etc are doing. Instead of
paying to receive the packets from their transit provider, they want
to be paid to receive them instead. I wonder just how much the recent
price increase from Netflix was to help fund the extortion they are
being subjected to?

Dave