This is a disappointing move by Netflix, which sadly is setting a dangerous precedent with what appears to be a pay-to-play between ISPs wanting to get paid on two fronts. Already saw that both AT&T and Verizon are in "negotiations" with Netflix to strike a similar deal.
traffic from Netflix during peak times accounts for around a third of all Internet traffic.
That's why this deal happened. Netflix is requiring a ton of bandwidth and Comcast is responsible for providing it. When internet connections slow down because of high traffic Comcast will get the blame, and they will have to pay for the upgrades and the maintenance on the networks Netflix is using so much of. I'd much rather Comcast go after Netflix for this cost rather than it's customers.
From what I understand this appears to be a peering and transit issue between three parties (Netflix, Comcast, and the transit/CDNs) and the unwillingness of Comcast and other ISPs to properly invest in upgrades between themselves and these transit/CDNs, resulting in the degraded performances, forcing Netflix to deal with them directly. Customers and Netflix already pay, but the content isn't being properly delivered to us, even with ISPs consistently raising our rates.
In the short-term this may look like a good deal, but I fear this will result in higher prices when the uproar dies down. Not to mention the long-term impact this could have on minor players or new startups who may never get off the ground.
Terms of the deal were not disclosed although there’s no doubt that Netflix investors will be clamoring to know how it will affect the company’s bottom line. What’s more, it will be interesting to see how the costs are passed along to subscribers.
We'll never know if any price change is because of this. Netflix would charge us more if they believe people will still pay for it. Remember when streaming was a free add-on to your DVD mail service? As they acquire more content and produce more of their own (House of Cards etc) they're going to charge more anyway. $8/month is a steal for what we get.
Netflix is going to start charging more regardless due to content providers pushing higher and higher costs onto them, which Comcast, with NBC Universal is now a part of by the way. It sadly won't get any better if they are forced to pay-to-play with every major ISP to deliver meaningful streaming quality.
Knowing Comcast, they will go after Netflix AND the customers.
Check out this story on Yahoo calling this deal a
win for customers. The long and short of it is that customers won't get any rate hikes from Netflix because the deal allows Netflix to bypass intermediaries in their network. Netflix was paying them to get it's content to the ISPs and now they won't have to anymore. Instead (it sounds like) they're going to be paying Comcast for a direct connection.That means better Netflix service for the customers and no price hikes. The ones who get the short end are these intermediaries... whoever they are.
According to the same story, Comcast won't be raising any rates for any reason because of the acquisition with TWC. Because of all the scrutiny with regulators they are being extra careful not to upset anyone.
Netflix already has
Open Connect which allowed willing ISPs for free to cache content locally but most major ISPs, especially those who compete with Netflix, including Comcast rejected. This deal forces Netflix to pay, and at least to me appears to be some form of bullying/extortion. But I'm sure Comcast was being more flexible with their negotiations due to their current acquisition of TWC to show regulators that they aren't using their market dominance, which will grow significantly with TWC, especially on the ISP level, to degrade a competitors service.
What everyone should be concerned about is the long-term and how that might impact you. We may eventually see higher prices being passed on to consumers, fewer choices with a pay-to-play scheme, possibly fragmented markets and a hit to future innovation.
ghasmanjr said:
Amigosdefox said:
It shall be missed. Just wait until XBLive and PSN work better with specific providers. There will be an uproar.
If anyone is to blame for castrating Net Neutrality, it is those lousy Republicans. Damn them to hell!
I'm not sure if this is a clear cut case of violating net neutrality as defined by the FCC (or was at least), but it's surely troubling with end-users receiving degraded performance, and the players each blaming one another for it. And don't believe the Republicans are the only ones who bear responsibility. Democrats may speak highly of net neutrality, but their actions haven't always aligned themselves with their rhetoric (shocking!). Both surely receive contributions from these industries so few ever directly challenge them unless public outrage outweighs said contributions. If we want something done, enough of us will have to stand up and say something before it's too late.
- My Incredible Long Two Cents
