So all those stories lately about how Comcast might be throttling Netfix service? Turns out the real story is probably a bit more complicated than that.
The Internet has historically been built on arrangements in which big networks agree to swap each other’s traffic without charge, based on the assumption that it will all even out over time. But, America’s heavy use of video services like Netflix and Amazon.com Inc., as well as expanded online offerings from TV channels like ESPN, is making these old arrangements less tenable.
Netflix's carriers send far more traffic to broadband providers' networks than they take back, sometimes accounting for a third of all North American peak Internet traffic, according to Internet traffic-management company Sandvine Corp.
OK, but why would traffic have slowed recently?
Over the past three months, starting around the time Netflix made super-high-definition video available to all its subscribers, the average speeds of the company's prime-time video streams have slowed for Verizon, AT&T, Time Warner Cable and Comcast subscribers, according to Netflix's data.
"I do believe the problem is getting worse," Cogent chief executive Dave Schaeffer said in an interview.
In other words: Netflix is stuffing ever more data into the pipes. There are things that both Netflix and Internet providers (not just Comcast, by the way) could do to resolve them problem — but each side is trying to gain the long-term advantage. "They're just waiting to see who blinks first,” said one observer.
Netflix may have the advantage: The FCC announced today it will begin work on "open Internet" rules that would prevent Internet service providers like Comcast from charging extra to companies like Netflix.
Now, even if this gets resolved, Netflix is still important to Comcast’s immediate future. How? Regulators are probably going to make sure the video streaming company doesn’t get stuck with onerous charges from the new, embiggened post-merger Comcast. Barron’s explains:
The cable companies are likely to argue that they offer the same experience to everyone and this is not an issue absent specific blocking or degradation, which does not exist. The longer-term fear by the OTT crowd is that Comcast would develop its own streaming products or just push its on-demand video products that may work better than an OTT streaming service under a given network-congestion scenario. Going further, the opponents of the Comcast merger are likely to suggest a larger compact would have motivation to simply degrade 100% of their Internet traffic, which might make its proprietary products work better. Either way, the unaffiliated content companies fear discrimination, and given the popularity of Netflix and other products, we expect the beltway crowd to use this as a club to extract crowd-pleasing concessions.
Other Comcastic headlines today:
• Hey look! It’s somebody — Larry Popelka at Businessweek — praising the Comcast merger with Time Warner! He says Comcast is the “one company” in cabledom making a real fighting effort against cord cutters.
• Comcast is part of a consortium of tech companies that wants car companies to share part of the broadband spectrum they’re reserving for future crash-avoidance systems, Bloomberg reports:
Automakers say they’ve spent tens of millions of dollars developing technology, using their airwaves, that will let cars talk with each other and with highway sensors at short range. They’ll be able to let drivers know when two vehicles are approaching an intersection simultaneously or about to collide in adjacent lanes, or if they’re approaching a vehicle ahead too quickly.
The FCC is considering a proposal to allow sharing of the automakers’ airwaves made last year by former Chairman Julius Genachowski. He called Wi-Fi congestion a problem at airports, other public venues, and in homes.
Comcast last year told the FCC that the talking-car airwaves are “functionally unused” by the automaers, with commercial deployment possibly decades away.
• Philly.com reports the merger could boost the fortunes of the Arris factory in Horsham, Pa., that makes set-top boxes and other equipment used by both Comcast and Time Warner.
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