If Comcast CEO Brian Roberts Really Believes Netflix Gets Bandwidth For Free, Will He Pay Netflix's Bandwidth Bill?

from the just-saying... dept

So there was some buzz earlier this week when Comcast CEO Brian Roberts, speaking at the Code Conference, more or less admitted that he was seeking to shake down the entire internet:

In a series of analogies, Roberts likened his company’s role to that of a postmaster, pointing out that Netflix pays hundreds of millions of dollars to mail DVDs to its customers but now expects to be able to deliver the same content over the internet for free.

“They would like it all to be free. I would like to not have to pay for cable boxes,” he said.

Except, of course, Netflix already pays for its bandwidth. And Comcast’s customers already pay for their bandwidth. What Roberts really wants to do is to get Netflix to pay a second time for Comcast’s customers’ bandwidth, even though they’re already paying for it.

As for this argument that Netflix is trying to get anything “for free,” we went through this ridiculous argument nearly a decade ago, when the lobbyists for the telcos made the same claim (though, at that time it was about Google instead of Netflix). Mike McCurry, working as an AT&T lobbyist at the time, argued that Google “will never have to pay a dime no matter how much bandwidth they use.” Basically the same argument that Roberts is making about Netflix wanting “it all to be free.”

So as we did with McCurry, we’d like to make a small request of Roberts: if he’s so sure that Netflix pays nothing for these things, why not agree to pay Netflix’s bandwidth bill? After all, he’s arguing that it’s free, so he shouldn’t have to pay anything. Of course he knows that Netflix pays a ton for bandwidth. And he knows that his customers pay a ton for bandwidth. He’s just hoping to get them both to pay more.

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Companies: comcast, netflix

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Comments on “If Comcast CEO Brian Roberts Really Believes Netflix Gets Bandwidth For Free, Will He Pay Netflix's Bandwidth Bill?”

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78 Comments
Ninja (profile) says:

That would be very interesting considering the sheer amount of traffic Netflix uses (and would have been interesting years ago with Google as well even though today it would be even funnier to think about it). Netflix should negotiate like this indeed. We pay for the bandwidth we use in your network and you pay the bandwidth your users use outside your network and with fines if the promised speed can’t be delivered (for added lulz since Comcast is known for not delivering their services properly). The tune Comcast is singing will change fairly quickly.

Chris Brand says:

Re: Re:

That might be reasonable if Netflix was just pushing video content out to random people over Comcast’s network. They don’t do that, though. What they do is respond to the requests made by Comcast’s customers – the ones who paid to use that bandwidth. Just because Netflix is sending the data, doesn’t really mean that it’s them that’s “using a lot of bandwidth”. It’s all driven by Comcast’s customers.

Jason Tylor says:

Re: Re: Re:

If Netflix is that innocent, then why is it paying Comcast, huh? By the way, they are not just Comcast’s customers, but they are Netflix’s customers also. In essence, to give best experience to its customers and thereby to get more customers and earn more money, Netflix is paying Comcast a small piece of its cake.

Jason Tylor says:

Re: Re: Re:4 Re:

“They’re neither guilty nor innocent? Strange.”

Mr. nasch, what is it you are not understanding? I said Netflix is not “that” innocent as projected by Mr. Chris Brand where one would get a feeling that Netflix is just responding to Comcast customers as a voluntary service. I said Netflix is not “that” innocent, as they are Netflix customers also. You went into court’s legal language of ‘guilty’ and ‘innocence’.

Even now if you don’t understand, then there is no point in discussing it further.

nasch (profile) says:

Re: Re: Re:5 Re:

You went into court’s legal language of ‘guilty’ and ‘innocence’.

That’s not legal language, it’s English. “Guilty” is the opposite of “innocent”. “Not that innocent” implies “somewhat guilty”, but you then said they’re not guilty of anything. So if they’re “not guilty at all” how can they be, at the same time, “not that innocent”? But if you don’t feel like responding that’s fine, I don’t really care.

RD says:

Re: Re:

“Hate to say it but he’s right. When you’re using a lot of bandwidth on an ISP’s service, then you have the responsibility to pay for that traffic.”

Reported for sheer STUPIDITY.

The USER ALREADY PAYS THE ISP FOR THE BANDWIDTH. Get this through your thick, entitled skull.

I pay $50 a month for a connection to the internet. I get X-bandwidth for that price. I am the one “responsible” for using “all that bandwidth” on my ISP’s service. Not netflix. Not google. Not Techdirt. Not anyone. ME. And I ALREADY PAY FOR IT.

Read that paragraph over and over until it sinks into your thick skull.

Anonymous Coward says:

Re: Re:

Netflix doesn’t use that bandwidth, Comcast’s customers (who also happen to be netflix customers) are using that bandwidth.

If Comcast dislikes how their customers use their bandwidth, maybe they need need to change their pricing accordingly (which they won’t, because then nobody would pay for it).

Greevar (profile) says:

Re: Re:

You pay Netflix and they pay Cogent to deliver your stream to Comcast. You also pay Comcast to deliver it the rest of the way to your PC. So, you’re paying Netflix, Cogent, and Comcast for that video stream. Comcast wants Netflix to pay for what you’ve already paid Comcast to do!

What Comcast is trying to do is like Fed Ex charging you and Amazon to deliver your purchase. That’s double dipping. In the end, the customers end up paying twice.

John Thacker (profile) says:

Re: Re: Re:

Of course, if you have a smaller ISP, not AT&T, Verizon, or Comcast, then your ISP probably pays Cogent or Level 3 for Internet transit. Double dipping by Cogent and Level 3. I haven’t heard any announcement from Cogent and Level 3 that they’re going to be offering free peering with smaller ISPs.

Cox Communications, a cable ISP, pays Cogent for transit for things you request from Cox. That’s the same kind of double-dipping.

Cogent and Level 3 want to charge smaller networks for transit, but then get annoyed when the bigger networks try to turn it around on them.

John Thacker (profile) says:

Re: Re: Re:

What Comcast is trying to do is like Fed Ex charging you and Amazon to deliver your purchase. That’s double dipping.

It’s pretty common to have payments on both sides in two-sided markets. American Express and other fancy credit cards have annual fees– but also charge merchants on purchases. Newspapers have subscription fees– but also charge advertisers. Cable TV has subscription fees– but also charges advertisers. Sony and Microsoft take cuts from both developers and end users to sell games on their services.

At the same time, considerations can also mean that it makes sense to charge one side zero, or not.

Greevar (profile) says:

Re: Re: Re: Re:

No, that entire argument is an equivocation. Comcast is charging two parties (subscribers and Netflix) for the exact same service. Comcast customers are already paying Comcast for the bandwidth for the purpose of accessing sites like Netflix. What’s more, Comcast is degrading service purposely to make Netflix lose business and make the customers’ experience poorer. That’s flat-out extortion.

The Fed Ex analogy applies. Would you want Fed Ex to delay the delivery you paid for because Amazon didn’t give them a kickback to not delay it? What if Fed Ex was making it look like the delay was Amazon’s fault rather than Fed Ex purposely delaying it?

Michael (profile) says:

?They would like it all to be free. I would like to not have to pay for cable boxes.?

First, you don’t. Your customers pay for those stupid things.

Second, I’d like to not have to pay for a Roku, or the “smart” part of my smart TV, or a computer. THAT is the equivalent to the cable box – not the internet connection being used.

We need smarter people running these companies…

pixelpusher220 (profile) says:

Re: Re:

“I would like to not have to pay for cable boxes”. Great! neither do we. Since you’re the one who added them to the system, you can take them out…

What this moronic CEO just asked for was a GOVERNMENT internet equivalent of the USPS so that Netflix will pay for delivery and users only pay for data they send out, not for data they receive.

I’m good with that, though I’m not sure he is…

Rich Kulawiec (profile) says:

Let's use that analogy

“In a series of analogies, Roberts likened his company?s role to that of a postmaster, pointing out that Netflix pays hundreds of millions of dollars to mail DVDs to its customers but now expects to be able to deliver the same content over the internet for free.”

And who really pays those hundreds of millions of dollars in postal fees?

Netflix customers. (Surely Roberts isn’t dumb enough to think that Netflix, a for-profit corporation, is simply going to absorb those costs.) Netflix customers pay those fees to the postal service, who is of course then responsible for delivering the goods.

Just like Comcast customers pay Comcast (1), who is of course then responsible for delivering the goods.

(1) FAR too much, by the way, given Comcast’s insanely high prices, ridiculously low bandwidth, worst-available customer service, surly technicians, lying lobbyists, invasive practices (like forging DNS responses) and incompetent network staff (“we’re taking the spam problem seriously” — Comcast, 2004. Yeah. Right. Sure you are. That’s why it’s still a problem a decade later).

Andrew D. Todd (user link) says:

Re: Re: Let's use that analogy (to: Nasch, #50)

Let’s take the analogy to reality. Netflix really does send disks back and forth through the mails. Netflix mails disks at about two hundred Sorting Post Offices, in presorted batches of envelopes, and establishes return P.O. Box addresses at each of these, and sends out pre-paid mailers with the disks, with bar-codes, so that the customers can return the disks. For doing all these things, Netflix gets discounts according to published schedules, for saving the Post Office work. Netflix arranges for couriers to deliver and pick up stuff at the post offices, and carry it to and from a Netflix processing facility. This is standard bulk-mailing practice. It’s cheaper to do all that kind of thing in-house, rather than pay for the Post Office’s specially trusty public servants to do it. By that logic, Comcast ought to be paying Netflix to install its Content Delivery Network in Comcast’s switchrooms.

Another level of postal service is that between countries, as organized under the International Postal Union. If you want to mail a letter to someone in England, you buy the appropriate stamp from the United States Post Office, for about three times the cost of domestic mail, and put it on your envelope. The Post Office collects the mail, sorts it out, and hires an airline to carry sacks of mail to Heathrow, outside London, where it hands the sacks over the the Royal Mail, without any money changing hands. If your English correspondent wants to reply, he does the same thing in reverse, and the Royal Mail doesn’t pay to have the mail distributed inside the United States. I don’t know whether the architects of internet peering consciously copied the postal peering system or not.

If Brian Roberts wants to call himself a postmaster, he should be aware of the case of David L. Carslake, of the Frosty Treats company, back in 2007. Reduced to essentials, the defendant, Carslake, recruited Russian guest-workers on false pretenses, employed them as ice-cream-truck drivers, housing them in apartments controlled by a confederate (six of them in a one-bedroom apartment), and, by fraud and terror, sought to reduce them to a condition of slavery. When the immigrants filed for working papers, in order to find another employer, they were obliged, presumably for want of any alternative address, to use their employer’s address. Carslake intercepted mail sent to the immigrants by the United States government, in order to hang onto his labor force. There are serious penalties attached to diverting mail. Carslake thought his Russian guest-workers had no rights he was bound to respect. The FBI had to teach him different. He pled guilty to Obstruction of Mail, presumably in a plea bargain to avoid more serious charges. The prosecutor accepted the plea as the most expedient means to ensure that the Russian guest-workers didn’t have to go back to Russia with nothing to show for their summer’s work.

http://www.fbi.gov/news/pressrel/press-releases/fbis-top-ten-news-stories-11
http://freshare.net/article/kcs_frosty_treats_to_pay_47555_to_foreign_student_workers_in_obstruction_of/
http://www.law.umich.edu/CLINICAL/HUTRAFFICCASES/Pages/CaseDisp.aspx?caseID=392
http://www.unodc.org/cld//case-law-doc/traffickingpersonscrimetype/usa/2007/united_states_v._carslake.html?lng=fr
http://www.justice.gov/usao/mow/news2007/carslake.ple.htm
http://www.pitch.com/FastPitch/archives/2007/09/11/federal-heat-melts-ice-cream-man
http://www.semissourian.com/story/1434794.html
———————————-
See also my comments on this History New Network thread, back in 2011, about a University of Wisconsin professor who was threatened with having his e-mail spied on when he criticized the governor of Wisconsin.

http://hnn.us/blog/137919
——————————————–
Parenthetically, I see some posts from John Thacker, regurgitating Comcast talking points. I would suggest that he read the prior discussion.

http://www.techdirt.com/articles/20140516/12271727260/comcast-says-its-going-to-slap-all-its-customers-with-data-caps-makes-half-hearted-attempt-to-walk-back-earlier-statements-when.shtml#c549
http://www.techdirt.com/articles/20140514/06500227230/cable-industrys-own-numbers-show-general-decline-investment-over-past-seven-years.shtml#c467
http://www.techdirt.com/articles/20140502/07095427095/interconnection-how-big-broadband-kills-net-neutrality-without-violating-net-neutrality.shtml#c129
http://www.techdirt.com/articles/20140502/07095427095/interconnection-how-big-broadband-kills-net-neutrality-without-violating-net-neutrality.shtml#c160
http://www.techdirt.com/articles/20140502/07095427095/interconnection-how-big-broadband-kills-net-neutrality-without-violating-net-neutrality.shtml#c244

Michael (profile) says:

In a series of analogies, Roberts likened his company?s role to that of a postmaster, pointing out that Netflix pays hundreds of millions of dollars to mail DVDs to its customers

So what he is really saying is that Comcast is totally screwing their customers. Netflix sends DVD’s in the mail using pre-paid postage and their customers don’t pay a dime. When Netflix streams a movie, Netflix pays for the bandwidth to send the movie to the customer and the customer still has to pay for it when they receive it.

Isn’t he saying we should all get to stream Netflix without paying for the bandwidth it uses?

kitsune361 (profile) says:

A better analogy...

… would be that both Comcast and Netflix have to pay the US Postal Service to deliver the mail, but Comcast wants Netflix to also pay for all the overtime their mail room guy is having to put in because the quantity of letters they’re getting from Netflix.

Note, they aren’t HIRING a new mail room guy (adding more bandwidth) to offset their current mail room guy’s work, just asking for more money so he can work harder on Netflix’s mail instead of everyone else’s.

Anonymous Coward says:

Netflix apparently said to the Comcast at one point that since they’re 30% of Comcast’s network traffic and Comcast wants them to pay for upgrading Comcast’s networks to handle Netflix that Netflix will glad pay the costs, if they can take 30% of Comcast’s revenue.

Comcast of course greedily refused.

Anonymous Coward says:

Re: Re: Re:

The content is in direct competition with Comcast’s other product, cable service. Broadband providers and cable providers need to be forcibly split apart by the FTC as local and long distance phone service were. There is a conflict of interest today that is driving prices up for all consumers.

Nick (profile) says:

Their own analogy actually disproves their argument they are trying to make.

In their analogy, Comcast isn’t the Postmaster. They are more like a owner/organizer of a mailsystem for an apartment complex. Mail comes in and goes out through their office, but they are not at all responsible for making sure the mail from another apartment complex down the street is delivered to the other side of the country.

Shel10 (profile) says:

We don’t pay for bandwidth, we pay for access (connectivity). Brian – the robber baron – is claiming that we should pay extra for faster access. Theoretically, we are paying extra money to be able to download at 50mbps, however, most of us rarely get better than 30mbps. So much for net neutrality!

Brian – the robber baron – wants Netflix to pay for actual bandwidth used. Most enterprise (Netflix, GM, Walmart, Maryland Department of Transportation, etc.) users pay for access, and bandwidth usage.

Brian – the robber baron – is actually not delivering on promises to the home user. He’s stealing from us!

John Thacker (profile) says:

Re: Re:

Theoretically, we are paying extra money to be able to download at 50mbps, however, most of us rarely get better than 30mbps. So much for net neutrality!

Theoretically, as you point out, we’re paying for access, not guaranteed bandwidth. The only way to pay for actual or guaranteed bandwidth is to be metered, like businesses (and networks paying each other for Internet transit). But no one likes metering (I don’t either), so we’ll be stuck with paying for access and theoretical maximums we don’t get.

Digger says:

Better idea...

Tell Roberts that if he doesn’t back off and remove the fees and return any and all payments to Netflix that we’ll match the cost of Netflix’s ISP fees for 1 month, and then publicly put that amount up as a Reward for his dead body.

If it’s nothing, no one will go for it, if it isn’t – he’d better put up or run for the hills.

Whatever says:

Issue

The issue at hand is that while Netflix pays at their end, they do no pay at the receiving end. The middlemen transit providers charge at both ends, not just one. It’s not like Netflix pays and everyone gets the content for free. Both ends pay.

So the problem of heavy bandwidth use companies like Netflix is that they are also driving ISPs to have to increase the amount of bandwidth they pay for, without actually being able to pass that cost on to the end users. This is where all of your complaining about capping users adds to the squeeze that ISPs feel.

Unless you understand that the internet is both “sender pays” and “receiver pays”, then none of this makes sense.

techflaws (profile) says:

Re: Issue

It’s already been passed on to the end consumers in form of the flat fee they pay for their internet access. If that calculation is off, the ISP needs to rethink it.

And it’s not like the customer’s to blame either. The ISP initiated the move from volume based billing to flat rates and apparently they had no problems with the majority of users not using their contracts full capacity.

Spaceman Spiff (profile) says:

Netflix vs. Comcrap

Instead of folding into Comcast’s extortionate demands, Netflix should have told their Comcast customers that they could no longer get Netflix until Comcast restored a level playing field. Guess how long Comcast would have kept throttling Netflix content under a deluge of millions of customers threatening to drop their service?

Unfortunately, most of those customers have few (if any) options other than Comcrap for internet access in their area… 🙁

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