US cable giant Comcast has announced a deal with Netflix allowing Netflix’s video-streaming service a more direct route through Comcast’s network, which should improve streaming video quality for viewers. The first indications of the new deal between the companies came last week after App.net founder Bryan Berg observed more direct routes for Netflix data through Comcast’s network. The Wall Street Journal reported on Sunday night that the change was the result of a formal, paid agreement between the two companies, but Comcast does not specify how much the deal is worth.
Officially, Comcast’s deal with Netflix is about interconnection, not traffic discrimination. But it’s hard to see a practical difference between this deal and the kind of tiered access that network neutrality advocates have long feared.
Dan Rayburn has a contrary take:
Today’s news is very simple to understand. Netflix decided it made sense to pay Comcast for every port they use to connect to Comcast’s network, like many other content owners and network providers have done. This is how the Internet works, and it’s not about providing better access for one content owner over another, it simply comes down to Netflix making a business decision that it makes sense for them to deliver their content directly to Comcast, instead of through a third party. Tied into Netflix’s decision is the fact that Comcast guarantees a certain level of quality to Netflix, via their SLA, which could be much better than Netflix was getting from a transit provider. While I don’t know the price Comcast is charging Netflix, I can guarantee you it’s at the fair market price for transit in the market today and Comcast is not overcharging Netflix like some have implied. Many are quick to want to argue that Netflix should not have to pay Comcast anything, but they are missing the point that Netflix is already paying someone who connects with Comcast. It’s not a new cost to them.
As does Marc Andreessen:
The venture capitalist argued that too much of the discussion about net neutrality assumes that the internet is a static thing, rather than something that is likely to increase exponentially in terms of its demand for bandwidth, and that a strict or dogmatic adherence to net neutrality would likely “kill investment in infrastructure [and] limit the future of what broadband can deliver.”
Update (2014-02-27): Ben Thompson:
What Netflix is most concerned about from a non-discrimination standpoint are broadband caps, and, more broadly, usage-based broadband pricing. It’s not that their position differs on a point-by-point basis from most net neutrality advocates; rather, the priorities are different.
That leaves unlimited access on the chopping block. While I love the idea of unlimited data, I also am aware that nothing comes for free; in the case of unlimited data, the cost we are paying is underinvestment and/or discriminatory treatment of data. Therefore I believe the best approach to broadband is usage-based payment by both upstream and downstream, with no payments in the middle.
While we have not witnessed a change in peering dynamics as a result of the Netflix/Comcast transaction, a trend we have seen over the past few years is the degrading quality of bandwidth from conventional “tier 1” ISPs, where peering edges have become congested due to the games described above. Network operators commonly discuss on mailing lists how the big four access shops all maintain edges which are boiling hot unless you pay them, or buy from an intermediary paying them. Where it was once possible for an enterprise or content shop to enjoy “good enough” connectivity purchasing from these providers directly, one now must enter the complex game of multi-homing to a half dozen or more providers, or purchase from a route-optimized “tier 2” like an Internap, in order to enjoy a positive and congestion-free user experience.
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