Verizon Public Policy on Netflix

Steven Tardy sjt5atra at
Sun Jul 13 05:39:21 UTC 2014


You've previously stated:
  "$20 per mbps per month"
  "1.25 gigabits of bandwidth coming in"

 $20/mb/month * 1250mb = $25,000month

If netflix is 1/3 of bandwidth... saving 1/3 of $25,000 -=> $8,000/month.
(OK, Keep 100mbps for Netflix to pre-populate, 100mbps is 30TB/month)
(Now I'm curious how many GB/month Netflix pre-populates, hmmm)

How would "4U of rent" and 500W($50) electricity *not* save money?
If it's a money thing, then you have a price...
How much would Netflix have to pay you for you to consider?

Can you elaborate on:
 It costs Netflix as little as possible and the ISP as much as possible.

If your ISP isn't tall enough for Netflix, Akamai has a lower barrier of
Have you let Akamai give you a local cache? why or why not?

Steven Tardy, maybe I'm missing/overlooking something...

On Sat, Jul 12, 2014 at 8:22 PM, <nanog at> wrote:

> This is Brett Glass; I have been alerted to some of the responses to my
> message (which was cross-posted by a third party) and have temporarily
> joined the list to chime in. The following is my response to his message,
> edited slightly to include some new information.
> Dave Temkin wrote:
> >First and foremost, we built our CDN, Open Connect,
> "Open Connect" is not, in fact, a CDN. Nor is it "peering." It is merely a
> set
> of policies for direct connection to ISPs, and for placing servers in ISPs'
> facilities, that is as favorable as possible in every way to Netflix. It
> costs
> Netflix as little as possible and the ISP as much as possible.
> >with the intention to
> >deploy it as widely as possible in order to save ISPs who are delivering
> >our traffic money
> It does not, in fact, appear to save ISPs money. Note that Comcast
> asked for, and was given, additional payments even after it did all of
> the things that are part of Netflix' "Open Connect" program. Netflix,
> exercising inappropriate market power, has not offered smaller ISPs such
> as my own the same amount per customer. In fact, it has offered us no
> money at all -- even though our costs per Netflix customer are higher.
> Netflix thus discriminates against and threatens smaller ISPs, and by
> doing so, harms broadband competition.
> >and improve our mutual customer experience. This goes for
> >ISPs large and small, domestic and international, big endian and little
> >endian. We've never demanded payment from an ISP nor have we ever charged
> >for an Open Connect Appliance.
> The power and bandwidth consumed by an "Open Connect Appliance" (which is
> really just a hosted Netflix server) are a substantial expense for any ISP.
> Especially because the server is not a cache; it is stocked with content
> whether it is used or not and therefore wastes bandwidth on content and
> formats that will never be used even once.
> >When we first launched almost three years ago, we set a lower boundary for
> >receiving a Netflix Open Connect Appliance (which are always free) at
> >5Gbps. Since then we've softened that limit to 3.5Gbps due to efficiencies
> >of how we pre-load our appliances (more on that below).
> Most small ISPs (the average in the US, in fact) have 1,000 to 2,000
> accounts.
> If every one of those streams at 1 Mbps at the same time, which is highly
> unlikely, this still does not reach 3.5 Gbps. Therefore, most ISPs are
> excluded
> simply by this requirement if not by others (such as the requirement that
> the
> ISP alone pay for a dedicated connection to one of Netflix' relatively few
> "peering points").
> >We explicitly call our "cache" an Appliance because it's not a demand
> >driven transparent or flow-through cache like the Akamai or Google caches.
> >We do this because we know what's going to be popular the next day or even
> >week and push a manifest to the Appliance to tell it what to download
> >(usually in the middle of the night, but this is configurable by the ISP).
> What Netflix does not say here is that (a) it can only somewhat predict
> what
> will be in demand or go "viral;" (b) it wastes bandwidth by sending
> multiple
> copies of each video to its server in different formats, rather than
> transcoding locally or saving bandwidth on lesser used formats via caching;
> and (c) its server consumes large amounts of energy and bandwidth. A cache
> can be much more efficient and can be owned and managed by the ISP.
> >The benefit of this architecture is that a single Appliance can get 70+%
> >offload on a network, and three appliances clustered together can get 90+%
> >offload, while consuming approximately 500 watts of power, using 4U of
> rack
> >space, and serving 14Gbps per appliance.
> To put this in perspective: LARIAT builds its own caches which consume
> as little as 20 watts and can saturate a 10 Gbps Ethernet port. The
> Netflix servers are large, bloated power hogs compared to a well designed
> cache.
> >The downside of this architecture
> >is that it requires significant bandwidth to fill; in some ISPs cases
> >significantly more than they consume at peak viewing time. This is why our
> >solution may not work well for some small ISPs and we instead suggest
> >peering, which has 100% offload.
> Because it requires expensive bandwidth that's dedicated solely to Netflix,
> "peering" (as Netflix calls it; it's really just a dedicated link) has 0%,
> not 100%, offload. The ISP is paying for all of the bandwidth, and it
> cannot be used for anything else.
> >We've put a lot of effort into localizing our peering infrastructure
> >worldwide. As you can see from this map (sorry for the image), we're in 49
> >locations around the world with the significant bulk of them in the US
> >(blue pins = 1 location, red pins = >1 location in a metro) - more
> detailed
> >version at <> and in our
> PeeringDB record (
> ><> :
> Our ISP connects to the Internet in Cheyenne, Wyoming (a major Internet
> "crossroads;" it's where I-80 meets I-25) and Denver, Colorado (which is,
> if anyplace can make the claim, the "center" of the entire Internet).
> Netflix' small and relatively sparse network of "peering" points does not
> include either of those locations. (I've noted, just today, that they have
> only recently listed a presence at a private data center outside of Denver
> in Englewood, Colorado -- not one of the major Denver exchanges, such as
> 1850 Pearl, to which we're already connected at great expense.) To get to
> it,
> we would have to spend several thousand dollars per month on an expensive
> connection, with no reimbursement of this expense from Netflix.
> If Netflix were a good citizen, it would (a) let ISPs cache content; (b)
> pay them
> equitably for direct connections (smaller and more remote ISPs have higher
> costs
> per customer and should get MORE per account than Comcast, rather than
> receiving
> nothing); and (c) work with ISPs to develop updated technology that makes
> streaming
> more efficient. Bandwidth is expensive, and unicast streaming without
> caching is by
> far the most inefficient conceivable way of delivering "fat" content to
> the consumer.
> --Brett Glass

More information about the NANOG mailing list