Verizon Public Policy on Netflix

Mon Jul 14 13:46:33 UTC 2014

Jay Ashworth wrote:

[ As you might imagine, this is a bit of a hobby horse for me; Verizon's 
behavior about municipally owned fiber, and it's attempts to convert 
post- Sandy customers in NYS from regulated copper to unregulated FiOS 
service leave a pretty bad taste in my mouth about VZN. ]

Jay,
Quite agree with you on this stuff.  I used to spend a good part of my 
time working with municipalities on planning fiber builds - so VZ's 
behavior on those matters leave a pretty bad taste in my mouth too.  
But.. that's kind of a different issue, wouldn't you say?

Am I obtuse or does it all boil down to:

1. If both Netflix customers, and Netflix all connected to a single 
network - customers would be paying for their access connections, and 
Netflix would be paying for a pipe big enough to handle the aggregate 
demand.

2. The issue is that customers connect to one network (actually multiple 
networks, but lets stick with Verizon for now), and pay Verizon; Netflix 
buys aggregate capacity into other networks; with one or more transit 
networks in the middle.

3. Somebody has to pay for what's in the middle (ports into transit 
networks, bandwidth across them).  Those are additional costs, that 
wouldn't exist if everyone were connected to the same network.

4. Both parties can make reasonable claims about why the other guys 
should pay.

5. Verizon and Comcast are big enough to say "Netflix pays" - with 
Netflix making a visible stink about it.

6. Netflix is important enough to end users, that Netflix can tell the 
little guys "you pay."  And yes, they're making it a little easier by 
providing the CDN boxes.

7. In the absence of some reasonably balanced formal policies and 
regulations about settlements - we're going to keep seeing this kind of 
stuff.

Miles Fidelman

-- 
In theory, there is no difference between theory and practice.
In practice, there is.   .... Yogi Berra