Verizon Public Policy on Netflix

Mon Jul 14 14:35:08 UTC 2014

----- Original Message -----
> From: "Miles Fidelman" <mfidelman at meetinghouse.net>

> 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?

Certainly.  Just full disclosure: I'm as motivated to reply to this as I
am *because* I already have a hard-on for VZN.  :-)

> 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.

Correct.

> 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.

There's argument about whether VZN's claims are reasonable, and I
tend to fall on the "they are not, even though I don't like VZN anyway"
side; this thread was as much a sanity check as anything.

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

Yup.

> 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.

Fair amount easier I would say, but I don't think we have enough
empirical evidence either way, at least not in this thread.

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

I hope that it doesn't come to that.  Regulation is horrible.

Cheers,
-- jra
-- 
Jay R. Ashworth                  Baylink                       jra at baylink.com
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