Verizon Public Policy on Netflix

Mon Jul 14 20:08:53 UTC 2014

I do agree that Netflix could offer caching services for smaller ISPs. But
that's a fight for another day, right now were focusing on whether Netflix
should pay for caching content, let's look at the cost comparison.

NOT CACHING with Netflix
- up to 8gbps of transit - what's that, several grand a month from a major
hub with a big commit?
- a 10gbps port to transit provider

CACHING with Netflix
- up to 500w of power and 4u rack space - in a commercial DC that's a few
hundred a month, most telecoms have rack space in their own office
- a 10gbps port to server - the same
- transit commitment in off peak hours - most telecoms have plenty of this
to spare

That's a pretty massive saving.

I still do not understand how Netflix should pay for customers using your
network. Its like charging another carrier to receive a phone call from
your network, because you want to have cheaper plans.

The risk is, the policy Brett suggests, will misrepresent ISP pricing. This
is a huge issue. Brett? How do you think you can compete with big providers
when they're subsidized by Netflix? Bare in mind they'll have much more
power in negotiating with Netflix than you. Your customers will be paying
for Netflix, subsidizing your competitor!

Finally, I'd like to point out that there's an ISP in New Zealand called
slingshot that popped up on my radar. Transit in NZ appears to be expensive
as hell ($20+/Mbps for bulk buys from competitive PoPs) yet this ISP,
Slingshot, encourages customers to use their VPN to access Netflix.

This is notable to our conversation because when any ISPs are proposing
whats essentially a "Netflix tax" another one, who pays 20x or more for
transit and cannot cache Netflix are encouraging use of Netflix. Why?
Publicity.

Brett, you might like a look at that because they charge $10 more than the
cheapest competitor, but the proxy service they provide (which probably
costs them pennies) keeps customers flowing like water for its ease of use.
In a age where internet is becoming a commodity these are the types of
services that can keep you afloat.

Alternatively, use this debacle as advertising! I've seen many cable users
complain about Netflix being very slow, could advertising that you don't
throttle Netflix give you a competitive edge in cable territory??