Re: Verizon Public Policy on Netflix

[Mark Andrews <marka () isc org>]

In message <alpine.DEB.2.02.1407140734410.7929 () uplift swm pp se>, Mikael Abraha
msson writes:
> On Sun, 13 Jul 2014, Brett Glass wrote:
>
> > My customers do not want me to "creatively" find ways to extract 
> > additional money from them so as to cover expenses that Netflix should 
> > be covering. Nor do they want me to subsidize Netflix subscribers from 
> > the fees from non-Netflix subscribers. They want to pay a fair price for 
> > their Internet that does not include paying ransom to third parties.
>
> The Netflix users either have to pay to you, or they have to pay to 
> Netflix. Now, if you're paying $20 per megabit/s/month then you and your 
> users are victims of lack of competition in your area.
>
> In properly developed places in the world with working competition, 
> bandwidth prices are around $0.5-5/megabit/s/month. With those levels, you 
> would have much less problem covering the cost of transit and your 
> customers could use the service as much as they want because on margin, 
> producing more bandwidth doesn't cost too much. At $20, I can understand 
> that you're hurting. However, you paying $20 isn't Netflix problem. I 
> don't see how Netflix could be re-imbursing you for your bandwidth costs, 
> because it's not their fault either.
>
> So, the real problem you should spend your energy on is why are you paying 
> so much for bandwidth, not going after Netflix.
>
> Since this is probably not something you can fix short term, I see no 
> other option than to externalise your high margin cost to customers by 
> imposing a monthly cap on usage and charging more for the people using the 
> service more. You need to make sure your reveue model matches your 
> expenditure model.

And in some parts of the world bandwidth caps are the norm even for
terrestial lines.  My DOCIS home line has a 120G (down + up on this
plan) limit then it is rate limited for the rest of the month.  I
don't hit the 120G limit though I regularly go over 60G.  If I need
more bandwidth I would go up to the next tier.  This gives me a
fixed price as well as well defined service expectations.

> -- 
> Mikael Abrahamsson    email: swmike () swm pp se
-- 
Mark Andrews, ISC
1 Seymour St., Dundas Valley, NSW 2117, Australia
PHONE: +61 2 9871 4742                 INTERNET: marka () isc org