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Net Neutrality Woes: Netflix Now Also Paying TWC

Amidst the oncoming merger of Comcast and Time Warner Cable, Netflix has now agreed to pay TWC for direct access to its servers in an effort to improve the streaming experience for its users.

The statement that the company published was rather bare, stating, "Here is our statement on the interconnection agreement: We reached an agreement with Time Warner Cable in June and began the interconnection between our networks this month." It also included a brief description of what Netflix does.

Considering how straightforward and brief this statement is, it seems that Netflix management has been very reluctant to initiate this deal. This is the fourth deal that Netflix has signed with a major US ISP, and it follows similar deals with AT&T, Comcast, and Verizon.

The superficial problem that's occurring here is that Netflix does not have sufficient access to the ISP's networks in order to fluidly stream to all of its users, and new networks have to be laid out in order to provide sufficient bandwidth. A statement we received from Netflix for a past article indicated that Netflix already placed its Open Connect content delivery system at the ISPs interconnect locations, and that Netflix is paying said ISP to "haul our bits across the country". This would lead us to believe that there is something more going on than just a lack of networking resources.

Of course, there's more going on than the need to lay networks, and that's where things start to get messy. The whole idea that a content provider like Netflix needs to pay the ISPs in order to get proper access to their networks goes entirely against net neutrality, as this is discrimination by data type. After all, ISP's subscribers (you, me, your neighbor) pay the ISP to give them access to the Internet, and thus the content providers. Who are the ISP's to decide which content providers will have adequate network access and which don't?

In the past, Netflix has offered to pay for caching servers that could be placed in the facilities of the major ISPs; however, these offers were declined.

You're probably wondering why a situation like this exists in the US; the answer to that boils down to the FCC. Currently, the FCC is at a point where it needs to choose to either allow ISPs to build these 'fast lanes' or to reclassify broadband access as a telecommunication service, preventing such data discrimination.

For the time being, such deals will be necessary in order for certain service providers to stay above water, but we can't help but think that the FCC should decide to reclassify broadband access as a telecommunications service.

Follow Niels Broekhuijsen @NBroekhuijsen. Follow us @tomshardware, on Facebook and on Google+.

  • gamerk316
    Next up: The segregation of the Internet by ISP's, just like Television. Don't laugh: Its happening.
    Reply
  • thechief73
    In short: Bend over Murica' we're %$#@&!.
    Reply
  • Osmin
    Republican Michael Powell is the son of the former Secretary of State Colin Powel and formally an FCC appointed member under the Clinton Administration. He was appointed chairman of the FCC by George Bush and currently president of the National Cable & Telecommunications Association (NCTA).

    Today we have Tom Wheeler appointed as chairman by President Obama. Wheeler worked as a venture capitalist and lobbyist for the cable and wireless industry, with positions including President of the National Cable Television Association (NCTA) and CEO of the Cellular Telecommunications & Internet Association (CTIA) (Copied From Wikipedia).
    We now have companies ruling themselves and squeezing out as much money they can from their customers.

    Except for their party rhetoric and the millionaires/businesses that buy their election for favors, there is no difference between the two political parties. Big business pays for their candidate of choice to be on TV to attack their opponents that do not have the money to respond to their negative campaign. Until we get a different forum to select our representatives, nothing will change. Paid television/Radio ads is destroying our democracy of the people to democracy for the top 1%.
    Reply
  • gm0n3y
    This kind of news sickens me. How hard is it for politicians to understand that we want internet equality?
    Reply
  • IndignantSkeptic
    So basically Internet users will instead of paying a flat rate for Internet, will pay a variable amount proportional to how much Internet traffic they cause?
    Reply
  • falchard
    If you are Netflix and account for 31% of all internet traffic. Why should every single person pay for that bandwidth? What this does is push this traffic into a separate network that Netflix pays for passing it on to their consumers. I don't think its right that Netflix users pass on the cost of their service to everyone. By doing this it really reduces costs all around except for Netflix users and increases the reliability of Netflix.
    1. It reduces 30% of costs from sharing with other ISPs since they don't have to meter bandwidth on Netflix connections.
    2. It will free up bandwidth for many regional ISPs simply because its not being consumed by TWC or Comcast.
    3. TWC and Comcast will not have to pay for Netflix's servers.
    4. TWC and Comcast customers will no longer have Netflix congesting their internet access.
    5. Netflix customers with TWC and Comcast will get their own 30mb/s connection for Netflix in addition to the bandwidth they currently pay for.
    6. Netflix customers with TWC and Comcast will have far less latency connecting to their Netflix service since its connected to the ISP network.

    Now it would be interesting if the deal goes through with Verizon and Netflix sets up at IXPs instead of at individual ISPs. This way they can say <mod edit: watch the language> TWC and Comcast while also being able to provide all the benefits I noted above to all its customers. If Comcast tries throttling again they will just be constantly fined until they comply.

    BTW I have Cox which invests in its infrastructure and releases new services only when their infrastructure can support it. Suck it all you people who have to deal with shitty ISPs like Comcast, TWC, and ATT.
    Reply
  • f-14
    If you are Netflix and account for 31% of all internet traffic. Why should every single person pay for that bandwidth? What this does is push this traffic into a separate network that Netflix pays for passing it on to their consumers. I don't think its right that Netflix users pass on the cost of their service to everyone. By doing this it really reduces costs all around except for Netflix users and increases the reliability of Netflix.
    1. It reduces 30% of costs from sharing with other ISPs since they don't have to meter bandwidth on Netflix connections.
    2. It will free up bandwidth for many regional ISPs simply because its not being consumed by TWC or Comcast.
    3. TWC and Comcast will not have to pay for Netflix's servers.
    4. TWC and Comcast customers will no longer have Netflix congesting their internet access.
    5. Netflix customers with TWC and Comcast will get their own 30mb/s connection for Netflix in addition to the bandwidth they currently pay for.
    6. Netflix customers with TWC and Comcast will have far less latency connecting to their Netflix service since its connected to the ISP network.

    Now it would be interesting if the deal goes through with Verizon and Netflix sets up at IXPs instead of at individual ISPs. This way they can say <mod edit: watch the language> TWC and Comcast while also being able to provide all the benefits I noted above to all its customers. If Comcast tries throttling again they will just be constantly fined until they comply.

    BTW I have Cox which invests in its infrastructure and releases new services only when their infrastructure can support it. Suck it all you people who have to deal with shitty ISPs like Comcast, TWC, and ATT.

    that's a good way of putting things into perspective with the exception all the telecommunications services receive tax funds for their equipment such as the lines, which they are milking every penny from the 1940's bell telephone wires with the exception of the cable companies with their private lines & satellite network and AT&T's wireless microwave towers & satellite network and Sprints fiber optic lines network and Hughes satellite network.

    AT&T's microwave tower network will handle a TeraByte connection based on U.S. Navy Aegis systems at that time (IDK if this has been improved since the '70's & 80's).
    Sprints fiber optic network will handle (IDK)
    Hughes satellite network will handle (IDK but would be 1/10th to 1/100th of cable companies direct to consumers.)

    the old 56k limit by congress on dial up should be eliminated but i am sure the bribes paid to politicians campaign donations to eliminate this competition will never be removed until it's obsolete by some newly invented wireless consumer to consumer network system.

    nobody was upgrading their lines until google started laying down lines for 1GB net connections for dialup prices while other companies were taking off the software and bandwidth chokes and regulators from their equipment or software bottlenecks to slowly stay ahead of stop losses with a few extra MB upgrades in a show of competition for over double and triple the prices of dialup connections while also receiving tax payer subsidies for these fictitious upgrades.

    the flaw in your argument is that we are all paying for a set data rate and yet when we try to use it to it's fullest every day we're being slapped on the hands and penalized for doing so.
    you don't see electric companies doing this with your KiloWatts where you max out your circuit board with every kilowatt hour you pay for but when you hit over 50 or 50,000 kilowatts you suddenly get throttled? and yet by your view point all the big businesses in the area are using 5 million kilowatts bearing 31% of the load, and yet they get a discount instead of being throttled for generating most of the load. ( i know some people will cite the rolling blackouts in california, but that just furthers my point as california is not upgrading or making new power sources to accommodate the increased load demands ) from the last u.s. census i knew america just gained 60 million new people to 310 million from the previous 250 million that i knew of. that also added to the problem.

    to top it off no nation has come up with a good system of expandibility and ease of upgrade system which i have a good idea for, but would require vast amounts more road way public property and restructuring of all current for profit company utility systems and who do you make pay for that? the utilities won't want to and would pass the cost on to the consumers anyways and it's not fair to make it a tax paid by every one, like every one paying the fuel surcharge tax for their weed whips, chain saws, lawn mowers and boats.
    i also doubt utility companies will want to help subsidize competition with a universal conduit system path that doesn't require tearing up roads or putting lines thru even non customers yards despite the fact it would decrease future costs and access simple. property owners wouldn't like it also as it would eat into real estate along postal routes.

    i think if politicians could be slowly tricked into being made to realize the internet is THEE replacement for television for their greater political forum they would reclassify the internet as a telecommunication service and thus subject all ISP's to the same anti discrimination practices as the telephone and television industry. such as Osmin said
    ....Tom Wheeler appointed as chairman by President Obama. Wheeler worked as a venture capitalist and lobbyist for the cable and wireless industry, with positions including President of the National Cable Television Association (NCTA) and CEO of the Cellular Telecommunications & Internet Association (CTIA) (Copied From Wikipedia).
    We now have companies ruling themselves and squeezing out as much money they can from their customers.

    Except for their party rhetoric and the millionaires/businesses that buy their election for favors, there is no difference between the two political parties. Big business pays for their candidate of choice to be on TV to attack their opponents that do not have the money to respond to their negative campaign. Until we get a different forum to select our representatives, nothing will change. Paid television/Radio ads is destroying our REPUBLIC of the people to ?prioritization/dictates? for the top 1%.
    Reply
  • Solandri
    14010810 said:
    If you are Netflix and account for 31% of all internet traffic. Why should every single person pay for that bandwidth? What this does is push this traffic into a separate network that Netflix pays for passing it on to their consumers. I don't think its right that Netflix users pass on the cost of their service to everyone. By doing this it really reduces costs all around except for Netflix users and increases the reliability of Netflix.
    You think Netflix users are using all that bandwidth for free? Netflix users have already paid for the 31% of traffic they're using. They pay their ISP. Netflix pays their ISP. The ISPs either pay their upstream providers or have peering agreements with them. If an ISP is having pricing issues, then that's between them and their customers or immediate upstream provider. Netflix's end of the pipe has nothing to do with TWC. Netflix's ISP says they can deliver sufficient service for the price Netflix pays. TWC says they can deliver sufficient service for the price their customers pay, but then they don't deliver it.

    What's going on here is the ISPs like TWC are double-dipping. Their users have already paid for the Internet service. But rather than provide what their customers have already paid for, they're withholding or degrading service until Netflix pays too. Netflix already offers localized streaming servers to ISPs for free. After all, it reduces Netflix's ISP bill too. But these cable companies have the gall to charge Netflix money for Netflix to give them hardware. This is like a farmer selling apples to a wholesaler, who sells it to a distributor, who sells it to a supermarket, who sells it to you. The price of the entire transportation chain is already paid for by you when you buy the apple. But then the supermarket goes and demands money from the farmer or they won't carry his apples anymore.

    BTW I have Cox which invests in its infrastructure and releases new services only when their infrastructure can support it. Suck it all you people who have to deal with shitty ISPs like Comcast, TWC, and ATT.
    The only reason Comcast, TWC, AT&T can get away with this is because they have government-granted monopolies. Frequently, they're the only source of Internet in the areas they serve. If there were competition and they tried to pull this, Netflix would say "get lost." TWC's Netflix customers would notice their Netflix speed sucked while their neighbors using a competing service got great Netflix speed. Upon seeing that TWC wasn't doing anything to fix the problem, they'd drop TWC and sign up with another ISP. And TWC would go out of business.

    Except that doesn't happen because in the U.S., the customer can't sign up with a different ISP. Most municipalities have granted a cable monopoly so there is no high-speed alternative (DSL is becoming slower as phone companies abandon copper for fiber).
    Reply
  • ubercake
    As a former lobbyist and former President of the National Cable Television Association (NCTA) and former CEO of the Cellular Telecommunications & Internet Association (CTIA), Tom Wheeler has been strategically placed (appointed by Obama) in the role of Chairman of the FCC.

    We knew before his actually start date (Nov. 2013), that he'd be the one appointed and that's when the whole net neutrality/fast lane argument started to take priority in discussions with the FCC.

    He is there not to serve the citizens of this country, but rather to serve the corporations that pay him. It's a win-win for big cable.
    Reply
  • fatalshot808
    This is just really sad... Time Warner, Comcasts, etc are internet "service providers". You provide internet to your customers but if you if your customers are using too much data add a data cap(already done...) and charge for higher tiers for faster internet larger data caps(already done....) wait what am I getting at they already have these, why is this bull$### passed onto netflix and other media services?? Just pathetic.
    Reply