good FUD-dispersing coverage of the Comcast/Netflix deal...

[Rob Seastrom]

Alex Fraser <beatnic at comcast.net> writes:

> When does this stuff come up for a vote?  Is the setup of the net too
> important to be left up to the market place alone?   There can be problems
> getting the trains to run on time. 
> Thanks for posting this Rob, it is a very meaty site indeed.   Wasn't there
> some battles over peering before Worldcom went down?

There have been peering battles for ages.  First ones I remember were
in the late 90s.

Basically, there's no such thing as "free peering" at scale.  There's
a cost to both networks to move the bits, and they sit down and
negotiate who pays for what.

It might be "you pay for your router ports facing me, I pay for my
router ports facing you, and we split the cost of the cross-connects
in the datacenters where we interconnect, and are each responsible for
our own networks and no money changes hands".  That would be
settlement-free, but it's certainly not free - a 10 gigabit ethernet
port on a core router has a budgetary capital cost of $5k and a pair
of single mode fibers intra-datacenter is about $300/month.

See above comment about negotiation though.  It might be asymetric, as
in you pay for some of my ports, or I pay for the cross connects, or
something like that.  Still no cash changing hands month over month though.

But maybe the interconnection is much more beneficial to one party
than the other, so beneficial that the difference can not be absorbed
in the mechanism I described above.

In the case of Comcast, a sizeable percentage of peak hour traffic is
Netflix - between 30 and 40% which is more than any other single
source.  This forces upgrades all the way through the network.  There
was a growth curve anyway; Internet traffic continues to go up and you
get higher speed data from your cablemodem than you did a decade ago -
but Netflix is increasing the slope.  The difference between the
integrals of the two curves is something that properly ought to be
borne by Netflix (and I'm not sure that is sustainable at $7.95 per month).

If it's not paid by Netflix it'll get paid by the cable customer...
but without usage-based billing there's no way to make sure that the
proper people pay.  My parents do not do Netflix or Bittorrent, yet
their cable internet bill is artificially high because they're
subsidizing the family down the street that does both.

The market may not be perfect, but be careful what you ask for.  The
current situation at the FCC (all lawyers, no engineers) should serve
as a cautionary tale in the regulatory arena.

-r