Verizon Public Policy on Netflix

Sun Jul 13 16:09:24 UTC 2014

At 11:39 PM 7/12/2014, Steven Tardy wrote:

>How would "4U of rent" and 500W($50) electricity *not* save money?

Because, on top of that, we'd have huge bandwidth expenses. And Netflix
would refuse to cover any of that out of the billions in fees it's collecting 
from subscribers. We can't raise our prices (that would not only cost us
customers but be unfair to many of them; it would be forcing the non-Netflix
users to subsidize Netflix). We simply need Netflix to pay at least some of its
freight.

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

Akamai refused to do so when we approached them. The Akamai rep was rather rude
and dismissive about it; we were too small to be worthy of their attention.

It's important to note that the growth of rural ISPs is limited by population.
Even if we did not have rapacious cable and telephone monopolies to compete
with, our size is naturally limited by the number of possible customers. Each
of those customers is every bit as valuable as an urban customer, but Netflix
won't even give us the SAME amount per customer it gives Comcast, much less
more (it costs more to serve each one). And Netflix is particularly out of line 
because it is insisting that we pay huge bandwidth bills for an exclusive
connection just to it. It is also wasting our existing bandwidth by refusing to 
allow caching.

If Netflix continues on its current course, ALL ISPs -- not just rural ones,
will eventually be forced to rebel. And it will not be pretty. 

Our best hope, unless Netflix changes its ways, is for a competitor to come 
along which has more ISP-friendly practices. Such a competitor could easily 
destroy Netflix via better relations with ISPs... and better performance and
lower costs due to caching at the ISP.

--Brett Glass