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While it's not clear how much Netflix is paying Comcast, the new deal will span several years

Comcast recently cemented its dominance as the top broadband provider in the U.S. after its planned acquisition of Time Warner Cable (TWC). And with a customer base that large, Netflix doesn't want to miss out.
 
According to Comcast, Netflix has agreed to pay the big cable provider to ensure that its movies and TV shows stream easily without traffic jams on Comcast's broadband network. 
 
While it's not clear how much Netflix is paying Comcast, the new deal will span several years and Comcast said it would connect to Netflix's servers at data centers operated by other companies. 
 
This means a less-congested streaming experience for Netflix customers using Comcast cable connections, and Comcast gets to collect fees for providing the service.
 
Before this agreement, Netflix wanted to connect its own specialized servers to the networks of big cable providers in order to improve streaming. But Netflix didn't want to pay for such connections, and big cable like Comcast wanted fees because they'd be carrying Netflix's heavy traffic.  

So Netflix traditionally used middle companies for connections, but it had to pay these middlemen to do so anyway. There were also traffic congestion problems with this route, which slowed connections for customers. Netflix likely thought it made more sense to just give in and pay the big cable company (Comcast) for direct connections to its broadband network, and to ensure that Netflix content is delivered smoothly. 
 
This is a big step between big cable and internet streaming companies, as it means Netflix is more likely to offer similar deals with other major cable companies. 
 
Comcast, which acquired TWC earlier this month for $45.2 billion, serves 32 million households in the U.S. With the company having such a dominant position in the U.S. cable market, it could be a good idea for Netflix to jump onboard and please both current and potential customers with better service. 
 
Netflix has over 30 million subscribers in the U.S. 

Source: Comcast



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I swear
By jjlj on 2/24/2014 10:13:02 AM , Rating: 5
This is double dipping.

On one hand I'm ok with this because it means potentially better quality streaming. SO I darn well better get a stream in 1080 with DD 5.1 all the time.

On the other hand I'm paying Comcast for internet access and I expect to get access to anything on the internet at the best possible speed available. If you're selling 50mbps connections to everyone why the ... should I get penalized for accessing content that everyone else is accessing too? I am paying a reasonable price for broadband.

I wish they, ISP's, would stop trying to be content providers.

Oh well, we'll all end up paying more in the end because of this and there's nothing we can do to stop it, especially if Netflix has already agreed to the payments.




RE: I swear
By jjlj on 2/24/2014 10:16:20 AM , Rating: 3
I just had a thought. Should I call Comcast when my Netflix show doesn't stream in Super HD?


RE: I swear
By Motoman on 2/24/2014 10:46:15 AM , Rating: 4
No...you should call your elected representatives.

When ISPs got caught throttling traffic in the past, it was illegal because of Net Neutrality.

With Net Neutrality out of the way now, it's perfectly legal for them to throttle whatever they want - or just block it.

The one and only hope the internet has for survival is the re-enactment of Net Neutrality - with teeth.

Any resolution other than the 100% guarantee that ALL content will be served without prejudice or preference by ALL ISPs at ALL times is a horrific abuse of the peoples of all nations. Welcome to the Great Paywall of Amerika.


RE: I swear
By TheDoc9 on 2/24/2014 10:56:15 AM , Rating: 5
It took less than a week for Comcast to take advantage of their net-neutrality win. All of the false promises of not raising prices, not throttling or blocking were just bold face lies.


RE: I swear
By Motoman on 2/24/2014 10:58:44 AM , Rating: 2
And look at who was doing the lying. The very fact that anyone on DT even reads the posts those horribly deficient trolls post is stupefying to me.


RE: I swear
By Cypherdude1 on 2/25/14, Rating: -1
RE: I swear
By jjlj on 2/25/2014 11:08:16 AM , Rating: 2
quote:
Even then, the video quality during prime time was very poor. The picture was very pixelated and I was only viewing it on a 24" screen!


Were you using a browser to view it? If so the video and sound quality is limited. I recently installed windows 8 and downloaded the netflix app. I can tell you that you will be impressed with the picture and sound quality, on content that can stream at HD or better when using the netflix app. Even at prime time I was streaming at 5mbps which is good enough for their super hd.


RE: I swear
By Milliamp on 2/24/14, Rating: -1
RE: I swear
By Milliamp on 2/24/2014 11:33:19 AM , Rating: 2
>When ISPs got caught throttling traffic in the past, it was illegal because of Net Neutrality.

I want to add that this simply is not true. Net neutrality was shot down and was never actually passed into law. Take a look at attempted regulation under the net neutrality wiki: http://en.wikipedia.org/wiki/Net_neutrality_in_the...

Comcast was smacked down for filtering/resetting bittorrent without net neutrality so if anything it even further brings into question the necessity of the new law.

If Google fiber were to start blocking Yahoo search engine today without Net neutrality it's still illegal and they would still get sued for it.


RE: I swear
By Milliamp on 2/24/2014 11:33:20 AM , Rating: 2
>When ISPs got caught throttling traffic in the past, it was illegal because of Net Neutrality.

I want to add that this simply is not true. Net neutrality was shot down and was never actually passed into law. Take a look at attempted regulation under the net neutrality wiki: http://en.wikipedia.org/wiki/Net_neutrality_in_the...

Comcast was smacked down for filtering/resetting bittorrent without net neutrality so if anything it even further brings into question the necessity of the new law.

If Google fiber were to start blocking Yahoo search engine today without Net neutrality it's still illegal and they would still get sued for it.


RE: I swear
By room200 on 2/24/2014 8:06:11 PM , Rating: 2
I would think that YOU would be all for this. They own it, you want it, so you pay what they ask. Isn't that what you "freemarket" people always tout? Oh, I get it; if the free market hurts YOU, then you need the gubment.


RE: I swear
By brasstax on 2/25/2014 1:52:51 AM , Rating: 2
Except Comcast doesn't own it in the traditional sense. Their monopoly is enforced by governments, attaching strings to their product that wouldn't normally exist.

In this sense, government is part of the problem, but it's arguably a necessary problem.

Do you think "freemarket" Americans are hypocrites if they complain the price of a stamp at the Post Office? In some ways, Comcast is a similar entity.


RE: I swear
By sgestwicki on 2/28/2014 3:07:56 PM , Rating: 2
I don't want all the bits on a network being treated equally. That completely eliminates any attempt at quality of service with the exception of bigger more expensive pipes. I think everyone should agree that voice over IP traffic should be given a higher priority than bit torrent or some other download traffic.


RE: I swear
By tayb on 2/24/2014 10:52:00 AM , Rating: 3
Call your representatives and demand net neutrality. This is what happens without net neutrality. Online services that threaten core businesses of broadband providers are relegated to slow network paths... unless they pay up. When Netflix pays up YOU will pay up.

The inevitable outcome of an internet without net neutrality is the same outcome we currently have with television. Pay for internet packages that include fast access to certain things and slow access to others. Pay more for faster access to more things. It hasn't taken long for Verizon and Comcast to start throttling and it will only get worse.

This is going to destroy the internet. We need to demand that broadband providers be classified as common carriers and treat all traffic equally.


RE: I swear
By sgestwicki on 2/28/2014 3:13:41 PM , Rating: 2
A much better idea than net neutrality is competition. Comcast has lost millions of subscribers in the north east to Verizon FIOS because people are fed up with the company. Instead of sticking more government rules that run the risk of unintended consequences we should be demanding that the government sponsored monopolies be destroyed.


RE: I swear
By jimbojimbo on 2/24/2014 11:26:00 AM , Rating: 3
Also, in some cities Comcast has data caps and is constantly saying that it may be enabled in my city. If Netflix is paying for this Comcast better damn well not count my Netflix streaming data towards my caps!! That's total BS if they do.


RE: I swear
By jjlj on 2/25/2014 11:09:03 AM , Rating: 2
I agree!


RE: I swear
By FishTankX on 2/24/2014 12:34:02 PM , Rating: 2
You're not seeing the charges to Netflix because of throttling, I imagine it's because Netflix wants to directly connect it's servers into Comcast's network so you can bypass all of the links between Netflix's servers and Comcast's pipes. This will probably reduce Netflix's ISP bills as well because they don't have to pay any extra bandwidth charges to reach Comcast's customers. They'll be wired straight into their data centers and everyone will get buttery smooth connections without Comcast having to upgrade any of their outbound pipes.

Comcast just charges because they know this will generate oodles of traffic on their network, and I think Netflix and other streaming networks account for a major portion of world internet bandwidth consumption. This means Comcast will eventually need to upgrade it's pipes and boxes to keep up with demand.


RE: I swear
By Motoman on 2/24/2014 1:00:11 PM , Rating: 3
http://consumerist.com/2014/02/23/netflix-agrees-t...

You're missing the point. A content provider agreeing to pay an ISP for port-peering is a horrible precedent to set.


RE: I swear
By Concillian on 2/24/2014 1:28:45 PM , Rating: 3
Double dipping has been happening for years on cable/sat. We pay for cable TV channels. Those channels get money from the cable/sat companies, AND they get advertising revenue.

I wish as much as anyone else that the ISPs weren't content providers, but not gonna happen without strict government oversight... which has it's own pitfalls. There is no "good" alternative unless you assume either the government or large corporations to be altruistic... heh.


RE: I swear
By artemicion on 2/24/2014 8:10:00 PM , Rating: 2
I'm not sure enough details of the deal have been revealed to be outraged. It sounds like Netflix is paying Comcast for internet access, which *may* result in a superior quality connection between Netflix servers and end-users simply because you're eliminating possible bottlenecks in the routing if Netflix were going through some other service provider. If that were the case, who really cares.

If, on the other hand, Comcast were to throttle Netflix bandwidth to non-Comcast end-users, that would be troubling. But nothing suggests that is the case (so far) and frankly it'd be pretty stupid on Netflix's part if their contract with Comcast didn't have some sort of net neutrality clause.


RE: I swear
By jjlj on 2/25/2014 12:06:37 PM , Rating: 2
Well, a quick tracert revels that I hit 5 comcast routers before I leave comcast and I hit 3 Quest routers before I get to netflix.com. So There isn't a direct connection yet...


Beginning of the end
By Motoman on 2/24/2014 10:43:32 AM , Rating: 2
...to think there were people so abysmally deranged to insist that such things would never happen.

Guess who's actually going to pay for this? Netflix? No. Netflix customers.

Are Comcast customers going to get Netflix usage deducted from their bandwidth usage, since that bandwidth was already prepaid? No. Comcast gets to double dip.

What about other video streaming services? What if they *don't* agree to send payola to Comcast?

And look at the precedent that was just set. Any content provider that wants unfettered data transmissions through an ISP has to pay up. News...sports...education...porn...gaming...whateve r. Suddenly you, as the consumer, will have what content you can reliably have access to dictated by which service chose to purchase your eyeballs.

Who needs Big Brother when you have Large Comrade?




RE: Beginning of the end
By ebakke on 2/24/2014 11:48:32 AM , Rating: 2
I'm not sure what you think is happening here, is actually happening here.

From my understanding, Netflix isn't paying for unthrottled data on Comcast's network. They're merely paying for direct connections to Comcast's network to remove intermediate steps and provide shorter paths to Comcast customers (resulting in faster speeds).

Per the PR memo (emphasis added by me):
Working collaboratively over many months, the companies have established a more direct connection between Netflix and Comcast , similar to other networks, that’s already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic. Netflix receives no preferential network treatment under the multi-year agreement, terms of which are not being disclosed.


RE: Beginning of the end
By Motoman on 2/24/2014 12:02:15 PM , Rating: 4
http://consumerist.com/2014/02/23/netflix-agrees-t...

There's a good synopsis of what's happening. Read about port-peering and how the ISPs of the world are stopping the practice with regards to certain services...like Netflix.

Netflix is now *paying* for port-peering. Meaning the entry point for being a streaming service probably just amped up to include paying ISPs for port-peering service.

And if you think it will stop at Netflix...I have a nice bridge for sale.

The linked article notes that the previous Net Neutrality regulation wouldn't have precluded paid-for port-peering anyway - but that's amongst what I'm referring to when I call for a new Net Neutrality...with teeth.


RE: Beginning of the end
By ebakke on 2/24/2014 1:25:28 PM , Rating: 2
Thanks for the consumerist link. As you said, that was a nice synopsis.

I still don't agree that a problem exists, though. If someone wants to push a ton of data down my network, and I'm not getting a reciprocal benefit by pushing a ton of data down theirs, I'd want to be compensated for the added burden to my network.

I'm also not sure that the entry point for a streaming service was just amped up. But certainly once the service becomes popular enough to have a noticeable impact on the ISPs' networks, there will be added costs.


RE: Beginning of the end
By Motoman on 2/24/2014 1:59:34 PM , Rating: 2
I can't disagree more.

Now that the precedent has been set for a content provider to pay for port-peering, it will spread. Is Redbox going to have to cave to the same thing? What about if Fox Sports does and ESPN doesn't? Or if Origin does and Steam doesn't?

So on and so forth. The ISPs don't *have* to play nice with port-peering. And now that they've proven that they can force a content provider to pay for port-peering...there's a line in the sand. Either pay up, or get left in the slow lane.


RE: Beginning of the end
By ebakke on 2/24/2014 2:30:24 PM , Rating: 2
I agree with your description on how things could likely play out. I disagree that the scenario is problematic.


RE: Beginning of the end
By Motoman on 2/24/2014 2:57:26 PM , Rating: 2
quote:
I agree with your description on how things could likely play out.


:D

quote:
I disagree that the scenario is problematic.


>.<


RE: Beginning of the end
By ebakke on 2/24/2014 3:09:40 PM , Rating: 2
After re-reading the Consumerist article, I'm not sure Netflix has actually agreed to pay for port peering as you claim. It states port-peering was their original bottleneck, and it says they've entered an agreement with Comcast. But it doesn't say they've paid to open that bottleneck. It says they "established a more direct connection between Netflix and Comcast" and that they've removed the bottleneck all together by getting Netflix content directly on the Comcast network at 3rd party data centers. Maybe it's a distinction without a difference. But technically they haven't really paid for port-peering.

Even if they were, though... [shrug]. The end result is that those who use the network more, have to pay more for that usage. I have no objections to that.


RE: Beginning of the end
By Motoman on 2/24/2014 3:33:10 PM , Rating: 2
The problem you're not seeing is that they've established a precedent where a content provider is paying an ISP for better throughput...period.

Frankly there's nothing else that needs to be known, or said, about the issue. That is 100% of the problem, right there.

And left unchecked, this (and probably other traditional Net Neutrality issues) will be what ends the internet.


RE: Beginning of the end
By ebakke on 2/24/2014 3:57:03 PM , Rating: 2
I'm not an ignoramus. I see it; I get it. We've merely evaluated the information differently and I don't think it's a problem. I think an ISP should be able to charge for access to its resources. I think a content provider should be able to spend money to increase the quality of their product for their customers. If that means paying for better throughput, or co-located severs - great, fine, whatever.

Your doomsday prediction seems overblown. Making a mountain out of a molehill. Will things change? Sure. Will it "be what ends the internet"? Hardly.


RE: Beginning of the end
By Motoman on 2/24/2014 4:11:58 PM , Rating: 2
smh


RE: Beginning of the end
By ebakke on 2/24/2014 7:16:42 PM , Rating: 2
Just be careful. If you shake too hard, you might lose control and fall off that high horse. ;)

Bookmark this thread. If you're right and I'm wrong, find me in another thread, put the link back to this conversation, and rub my face in it.


RE: Beginning of the end
By AntiM on 2/24/2014 11:51:50 AM , Rating: 2
I don't see anything from stopping Comcast from having their own video streaming service. If the FCC and FTC aren't going to stop the TWC acquisition, then there certainly won't be any eyebrows raised when they either buy out Netflix or start their own streaming service and put Netflix out of business.


RE: Beginning of the end
By augiem on 2/24/2014 9:42:11 PM , Rating: 2
You've never heard of Xfinity? Been around for years.


Does it matter which company paid who?
By BRB29 on 2/24/2014 10:12:58 AM , Rating: 2
Basically, in the end, the customer foots the bill.

If netflix pays...you pay more for your monthly subscription

if the ISP eat the bandwidth expense...you pay more for your internet bill

if netflix doesn't pay and ISP refuse to upgrade connection with netflix...you get loading screens and has to downgrade to SD to get a steady stream.

What happens when netflix starts becoming unaffordable? more pirating!!!! these companies start suing people left and right again.

Yay! it becomes full circle. The customers pay, the big corporations take your money, the lawyers have the most to gain.




By lagomorpha on 2/24/2014 10:16:57 AM , Rating: 2
Don't forget about all the small ISPs that have an even harder time competing with Comcast because they can't negotiate contracts to be subsidized by content providers as well.

Oh who am I kidding, they're an endangered species already.


RE: Does it matter which company paid who?
By augiem on 2/24/2014 9:59:24 PM , Rating: 2
I've been saying for years Netflix's prices are totally unrealistic long-term and it's all coming along nicely. First we'll get ads on Netflix to help foot the extra costs and increase profits, then they'll add several tiers of service with no ads and access to premium (newer) content. They HAVE to do it this way. Consumers will kick and scream and have conniption fits if they raise the upfront price, but taxation, the shrinking size of food at the grocery store (along with fancier, more wasteful plastic bottles!), the fremium game industry, subsidized phones, and the rise of Google make it crystal clear that the consumer is more than happy to be tricked out of their money. As long as the big bold numbers on the price tag look small, they're okay. Ignorance is bliss. What you don't know can't hurt you, etc.

Netflix is far too cheap for what it offers. They've already killed blockbuster and most local movie rental outlets. They've done their job. Now its time to return to equilibrium. The cost of making all this entertainment hasn't dropped, yet somehow people think its realistic they can watch as much content as they want for $8/mo forever, AND demand newer content to boot. LOL!


By Reclaimer77 on 2/25/2014 12:11:36 AM , Rating: 1
quote:
First we'll get ads on Netflix


No, fuck that.

That would be the end of Netflix. EVERYONE would drop their subscription.


Better idea
By dgingerich on 2/24/2014 11:18:49 AM , Rating: 2
I have a better idea for Netflix, if they're willing to listen: create a VM or appliance (I prefer the VM route) that could cache certain videos on a customer's local network during low traffic times. Then the traffic wouldn't matter too much and the movie playback would be much better. They'd have to cache it locally with some sort of massive encryption so that hackers don't steal the movies so easily. The movie companies would insist on it. (As if Netflix even serves out movies before they're already old.) I'd like to see Amazon and Hulu do the same. We could have home servers to run the various caching VMs and better routing and firewall security than those crappy home routers. I'd be able to start my business of building home servers for people. (Right now, it's $700 for the server and $700 for the OS to run it. Hopefully, MS will make a home version with Hyper-V, DHCP, DNS, routing, and file services for cheaper.) It could be a boon for the economy to do such things, but I'm sure the movie and TV people would fight against it.




RE: Better idea
By FishTankX on 2/24/2014 12:38:12 PM , Rating: 2
If people balked when streaming only service started to cost more, why would they want to pay for a local caching server?


RE: Better idea
By Rukkian on 2/24/2014 3:40:57 PM , Rating: 2
I would have to be streaming an aweful lot and get crappy connections to shell out $1400 to then turn around and pay Netflix for streaming.


Nice euphemisms
By superstition on 2/25/2014 3:34:51 AM , Rating: 2
Is it so difficult to say throttling , or are you stuck in some Orwellian trance created by a corporate press release?




I Don't See The Problem...
By aldenf on 2/25/2014 12:34:45 PM , Rating: 2
If port-peering is the issue, then bypass it completely in a way that negligibly effects consumers...

Netflix already assumes the costs for the bandwidth from/to its data centers and pays to install, maintain and upgrade them. Most ISPs offer paid hosting in their data centers.

If Netflix pays an ISP to host their content, it bypasses port-peering to the ISP's customers and takes the traffic off the internet as it never leaves the ISP's network. Netflix frees up resources it currently assigns to their data centers (including bandwidth costs) and reassigns said resources to pay the ISP.

The ISP makes a fair profit for the hosting and bandwidth. Netflix improves its services at a nominally higher cost to its customers.

As 4K content proliferates, customers pay a premium to access it.

There is usually a win-win solution to most problems. When individuals or businesses succumb to ugly greed, those win-win situations tend to evaporate.




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