Source discrimination is bad. The Internet allows applications and services to run “at the edge” of the network and not centrally; this encourages innovation [1].
Path discrimination is more complicated. Many content providers already pay private networks to transport their traffic on faster than the public internet [2]. There is even a market for traders paying tens to hundreds of thousands of dollars for low latency connections [3].
Given that ISPs charge each other for transporting traffic [4] it costs more to broker traffic across others' networks versus its own. It doesn't seem unfair for the ISP to charge less for the latter. This would allow Comcast et al to compete with the Akamais and Level3s that irk them today [5]. Sooner or later they will find it makes more sense to offer the discount for same-network traffic to everyone.
Comcast has made shitty statements about net neutrality before [1]. But it's not okay to vilify anything Comcast says by virtue of it being said by Comcast - that's straight up ad hominem.
[1] http://www.stern.nyu.edu/networks/Economides_Net_Neutrality....
[2] http://techcrunch.com/2010/11/11/level-3-lands-netflix-strea...
[3] http://www.highfrequencytraders.com/article/682/options-it-o...
[4] http://blog.teracomtraining.com/how-isps-connect-to-the-inte...
[5] http://blog.comcast.com/2010/11/comcast-comments-on-level-3....
Bandwidth is cheap. The bandwidth to give everyone in a mid sized city 100mb internet access costs around 20$/person a month + the cost of the wires. So, if Comcast provides 5mb internet for X$ they can make money providing 100mb for X + 20$. Yet, they want to both charge 3+ times that AND make money on side deals AND keep their local monopoly.
Now, latency is a slightly different issue. I would suggest that it's reasonable to either run an extra line OR host some servers locally to deal with that. But, assuming you have a sane network topology there are vary few cases where latency is actually important. Yet, if Comcast sees an opportunity to profit from the latency game they will do so. They already provide crappy DNS service to slow people down just think what they will do if they think latency is the path to extra profit.
PS: You could replace Comcast with Cox and probably just about any other local cable company and say the same things. But, I just happen to know more about Comcast and they are in the article so I stick with them.
I do not want to be in the position of defending Comcast (who I hate with fiery passion), but that sounds a bit like arguing that the cost of manufacturing an Adobe Photoshop disc is relevant to how much it can or should cost.
How does running an extra line lower your latency? I think you're confusing bandwidth and latency here. Latency would involve replacing your line with better infrastructure (small impact) or changing the route your packets would tend to take to one with fewer hops and shorter distances (big impact).
That's not for consumer broadband access. It's not even for commercial broadband access. It's a specific use, point-to-point network connection. It's important to separate general broadband access from special-purpose network connections for net neutrality purposes.
Paying a company to bring fiber into your area and then leveraging their service over that fiber is very different from consumers dealing with (typically) municipal contractually-enforced monopolies that restrict their access to the internet. I'm a capitalist kind of a guy, but monopolies destroy the dynamics of the free market and have to be kept firmly in check.
>Given that ISPs charge each other for transporting traffic [4] it costs more to broker traffi[...]
I don't think anyone is arguing that there isn't a cost motive for providing tiered pricing. Of course there is.
The issue is that monopolies must either be broken up or they must provide special protections for both consumers and the health of the free market in general. Net neutrality is that protection and it trumps Comcast's cost-based-pricing motives.
I doubt Comcast put in data caps because of interconnect costs. I would love to see what a gig of interconnect data costs them.
In the US we pay about $3/Mbps [4], suggesting a healthy minimum 1/5 profit margin. This happens to be around CMCSA's 1/5 operating margin (suggesting the transit price is lower) [5].
I couldn't find data for internal transit prices, but assuming everyone runs with about a 1/5 margin on transit costs as well (likely too dear) we can take $1.9/Mbps as being a decent relative estimate of internal costs. This is a $0.45/Mbps or 15 percentage point to revenue difference.
[1] http://drpeering.net/AskDrPeering/blog/articles/Peering_vs_T...
[2] http://drpeering.net/white-papers/Internet-Transit-Pricing-H...
[3] http://conferences.sigcomm.org/sigcomm/2011/papers/sigcomm/p...
[4] http://dailyinfographic.com/internet-speeds-around-the-world...
What does the author mean? Comcast certainly doesn't own the entire Internet, so why is it a meaningless distinction?
Standard usage of "On Demand" programming from a DVR or other set top box do not count against the existing data cap quotas.
If this app essentially allows an XBox to plug into this private network capacity like any other set top box, I think this is an important distinction.
One of Comcast's biggest (and most hated) capex expenditures are the cable boxes. They hate with an unholy passion having to upgrade boxes. In this context they're basically trying to get the users to upgrade their boxes on their own dime. When I put on my consultant hat and talk to analysts in this area we've been talking more and more about how connected tv's and OTT Boxes can be beneficial to cable operators. One of the downsides of cable cards is that you never got a guide with it. Combine a cable card and a Samsung Connected TV and you can really do both and get rid of the card all together.
Second they're quickly realizing that maintaining two on-demand infrastructures (Web and traditional VOD) the really sensible thing is to move as much as possible to delivering via your cable modem as opposed to the broadcast channels.
Of course as they do so they're going to have to do something about the bandwidth caps. Stories like this put Comcast in a strange position. They want to deliver more "TV" video content over their internet pipes but apparently can't do so and maintain a cap at the same time.
The main reason, of course, is that their biggest threat will be taken away: An ever-growing segment of their customer base cancelling $100+ TV service in favor of $50 IP-only service, with the other $50 being spent on NetFlix, iTunes, Hulu.... Required "Apple TV" plans will include whatever mix of traditional signal and IP is needed to deliver a "magical experience" and will be priced accordingly.
The fact that this private content is being delivered over an IP network shared with its "public" internet service changes things a little, but not enough I suspect.
Which brings up the question: what does net neutrality mean for the last-mile ISP? It seems not a lot. It ensures equal treatment of sites on the public internet, but if a Microsoft or whoever wants to pay for "premium" service over a private network, they'll always be able to.
I didn't give Comcast the right to dig under my house for nothing.
TV-style subscription-based services work with users as consumers: the pipes go one-way, because each subscriber is just a dumb set of eyes with a wallet. But with the internet, and new disruptive content models, everyone is also a creator. The real danger of losing net-neutrality is that individuals will become unable create new media for the internet.
So this goes over Comcast's super fast DOCSIS network and never over any internet gateways.
Not sure if this is the NN violation others are assuming it is. It seems like a simple "can we put our junk on your LAN to save bandwidth" deal.
Does Comcast allow a user to purchase additional bandwidth beyond their 250 GB cap?
If so, how much does that cost?
It's not just a cap, it's a hard limit. If you want more, you are forced to go with the ISP's own "blessed" option.
This is a significant portion of what bothers me with these caps. They are not graduated in a reasonable fashion. Instead, they are a cliff -- either entirely, or through absurdly high "addtional bandwidth" costs, limiting the service that the user can receive.
THEN, the ISP comes along and offers the user a sole way around/past this limit: Purchase whatever subset(s) of the additional service exclusively via the ISP's "value-added" content. (You can only have more bits if you buy your movies (well, movie viewings) from us.)
THAT, my friends, is a monopoly. Especially when you only have one or two ISP options, and they're all doing it. (Again, to you overseas, this is the case for much of the U.S.)
That, and the 250GB cap hasn't changed since 2008. In the meantime I can now fit 250GB into less than 1 cubic cm for around $150.
And a "soft cap" is a hard cap, if you regularly want/need more than the cap.
P.S. I agree that I may have "waffled" a bit with respect to the option to switch to business class service. However, I understand that business class service is not available in all areas, can itself be a significant price bump (i.e. not an incrementally reasonable amount for incrementally more bandwidth), and requires different equipment and an on-site installation visit -- also at significant cost. (I don't have it, though, so correct me if I'm wrong.)
P.P.S. On the other hand, I have considered their business class product to be an option if and when I need it. At least some sort of higher capacity option. Let's hope they don't take it away, e.g. from residential locations.
Imagine that suddenly your smaller, lesser-known favorite sites are all bandwidth limited. There are just a couple hundred sanctioned ones that you get "for free". Small endeavours like Reddit or HN don't have a chance to grow fast anymore. That's the future if you are ok with this.
From the customer's perspective nothing really changes. Technically your modem will probably be provisioned differently to support the extra services. So for example if you buy a 50Mbit/sec Internet package and a video package from Comcast your modem would actually be provisioned with multiple service flows -- a 50Mbit/sec for Internet traffic and another 50Mbit/sec reserved for Comcast services. That second 50Mbit/sec service flow allows you to have the same video service functionality as the 2-3Gbit/sec of broadcast video they presently waste 90-95% of their spectrum on. This will be reclaimed for the big general-purpose IP data pipe. Comcast will continue to use some percentage of that pipe for their own services but it will be a much smaller percentage than they use today.
So really everyone wins in the end. IP set tops are cheaper than traditional cable set tops. Consumers get to use Comcast services integrated into devices they already own. Comcast's competitors get a bigger dumb-pipe into people's homes to ride on. I admit it looks bad if you don't understand the technology but it's important to remember the bandwidth crunch that Comcast and other MSOs have is directly related to how they presently deliver their own services. Any effort they make to solve that problem is good for consumers in the end.
Past HN topic: https://news.ycombinator.com/item?id=3505922
The way I see it you get all their content through a cable box today without paying data usage fees for the bandwidth TV uses on their network (that's the point of the TV subscription fee). Now they're allowing that content on another "set-top box", in this case the XBox. The implementation details (the fact it uses internet streaming vs cable tuner card) shouldn't matter to the end-user. You pay the TV subscription fee, you get it without additional fees.
If the situation were reversed and they were charging data fees for accessing content you already pay for, we'd be up in arms about that, too...
And without a second lost, watch this: http://www.youtube.com/watch?v=Ik1AK56FtVc
That video has changed my point of view on the entire subject and has allowed me to start striking at the root.
"If someone's behavior is such that it degrades the quality of service for others nearby -- that's what this threshold is meant to address," said company spokesman Charlie Douglas. "It can negatively affect other people."
So you end up paying for it in the end, since say, $0.05 of every dollar (totally made up figure) ends up going to AT&T.
So, to coin a somewhat wordy phrase, it's free-as-in-jet-fuel-when-you-buy-a-plane-ticket.
What Comcast is doing is testing the waters. I personally find it just the beginning, as if this is allowed, other companies will follow suit.
I recently switched to Verizon FiOS for TV, which necessitated the installation of a FiOS branded Actiontec router, so that the cable boxes can access the Internet over MoCA. The router has QoS rules to prioritize VOD traffic over all other traffic (which is why I purchased an Ethernet to MoCA bridge, so I can use my own router).
Maybe we'll reach a point when consumer connections start to be billed like business ones are now (95th percentile, or whatever) but I don't think there's anything wrong with pricing that better reflects real usage. It may turn out to be a little more expensive for some of us, here on HN in particular, but if we want a better Internet infrastructure, we'll have to pay for it because AFAIR ISPs' ROIs aren't particularly impressive.
Net neutrality is the safeguard of many things but for entrepreneurs it guarantees they get the same treatment as big companies. In other words what matters most is the quality of your product and not the ties you have with ISP.
It works and guarantee pretty much the same thing as the antitrust laws. Fair competition is a huge source of wealth but requires constant care.
My leitmotif is always: Think about the [negative] externalities!
OK, let's imagine MS actually puts their servers in Comast's closets or arranges for some sort of direct connection(s) and it becomes cheaper for Comcast to serve Microsoft's content, now hosted on Comcast's own network or topographically close by. Should Comcast not be allowed to pass (some of) those savings to their customers just because a smaller company couldn't afford to keep their servers with multiple providers?
That's not what Net Neutrality is about.
Truly it's cheaper for, say, Comcast to send VOD data across its own network than it is for Netflix to pay for its own ISP service and the various peering agreements it needs to get its data into Comcast's network. So those differences in costs can be reflected in their respective prices and that's fine. [1]
Net Neutrality concerns come into play if/when Comcast is allowed to set additional arbitrary restrictions on competing services, to make its own offerings more effective. Either by deprioritizing Netflix traffic in favor of its own, interfering with packets connected to services or protocols it would rather Comcast customers not use, outright blocking competing services, charging Netflix an additional fee above and beyond what a non-competing service would pay for a similar amount of packets, or any number of other nefarious schemes that the operator of a network could concoct to degrade the experience of competing services or drive up their prices.
Net Neutrality isn't about taking away an ISP's home court advantage. It's about making sure they can't actively sabotage their competitors.
[1] Trick is: the difference in marginal cost is negligible compared to content costs. So there's no real room for Comcast to 'win' against Netflix on price-advantage alone. Further, Comcast's motivation to violate Net Neutrality isn't to advantage its own IP VOD service against Netflix, but to keep the price of all IP VOD services high, to avoid IP VOD from cannibalizing the profits they earn from broadcast VOD. (Which are priced high because US cable operators often enjoy a local monopoly.)
Since you're usually locked into one or at best two broadband providers in a given area, it's too easy for them to manipulate the system.
Comcast already has a pretty solid history of abusing its monopoly over cable TV. The frustration I've had just using my "digital ready" TV with Comcast when they insist on renting you cable boxes that you shouldn't need has pretty much eaten through any free market sympathy that I might otherwise have had for them.
A lot of the arguments in the article and even some in this comment thread are "imagine if"... Either something is wrong on its face or its not. You shouldn't have to come up with theoretical examples of Comcast charging for unlimited access to Youtube and Netflix in order to make your point.
My cell phone service by the way (Bell Mobility) offers free unlimited access to Twitter, Facebook and Myspace that don't count against my mobile data plan cap. If you consider that against net neutrality, then net neutrality died a long time ago.
How isn't this against Net neutrality? Suppose you run a service that competes against Twitter. With Net neutrality you must prove to the users that your service is better thatn Twitter. Without Net neutrality you must prove to your users that your service is so much better than Twitter that it is worth to pay additional money to the phone company to use it. Or you can pay the phone company to add your service to the number of non-data-cap-eating websites.
In the end the phone company is paid twice: a first time by the users and another time by the websites.
>For companies like Comcast, which has railed against the concept of being a dumb pipe, Microsoft’s decision to pay it for free access for Xbox Gold users is a major coup.
Why does the article take as a given that Microsoft is paying Comcast? What if the arrangement is that MS gets more value added to XBox Live Gold subscriptions and Comcast gets more value added to it's TV service? Now this may not be the case, but doesn't seem any less likely than the article's assertions given what we know.
What the consumer pays for the bandwidth should be based on the actual cost the ISP incurs for that bandwidth and not on the value the customer is getting. That's none of the ISPs business.
You mean like wireless carriers making in-network calls free? Or Skype making in-network calls free?
>What the consumer pays for the bandwidth should be based on the actual cost the ISP incurs for that bandwidth and not on the value the customer is getting
This is based on the costs the carrier incurs - it costs more to transport traffic through a NAP and across another carrier's network than it does through one's own [1].
Preferring cost-based-pricing, i.e. fixed margin, versus value-based-pricing says carriers are a utility. The wording used implies cost-plus pricing (which has it's own boat of troubles - witness NASA contractor costs versus SpaceX [2]) is inherently superior to market pricing.
[1] http://blog.teracomtraining.com/how-isps-connect-to-the-inte...
[2] http://www.parabolicarc.com/2011/05/31/nasa-analysis-falcon-...
Let's see if I understand this article though: I can pay $$$$ dollars a month for 250GB of dumb data transfer a month. If I go over that quota, I have to pay $$$ more or I get shut off or slowed down.
But now Comcast allows me to pay $ to get an unlimited access to certain sites like NetFlix that would otherwise eat up most my "dumb" quota (if I watched movies all day).
That sounds good to me, I'd rather pay $$$$+$ than $$$$+$$$ for the 400GB of NetFlix traffic and 100GB of other traffic I use per month.
In a way, this is the market's solution to the piracy problem. Licensed media sources are offered at a discount while torrent traffic is still allowed, but under general traffic prices. Say what you will but, if the market doesn't create a solution, the government will and I guarantee you won't like their solution.
Sorry, but that's a shortsighted view. You're now glad that you only pay +$, but a year from now you could be paying +$/4 if only the competition hadn't been crushed by these deals.
I assume you mean NetFlix's competition.
I can see your point there. In a perfect world, as a consumer I would have a choice of ISPs. I wonder if this will become an antitrust issue:
http://www.nytimes.com/2000/08/06/business/how-coke-pushed-r...