"Netflix's solution is was to peer and to place a bunch of storage gear at ISP points of presence for free. That works, but may not be a solution that makes sense for the ISP for a variety of reasons."

Here's the thing. The ISP is over-subscribed, i.e. they've sold probably 25 more "contracts" for service than they can actually deliver. They advertise 25/5 Mbps service to customers but allocate perhaps only 1/0.2 Mbps (only 4% of what they're advertising for sale) across their back-haul and peering stations for their customers. This is under the premise that the network is bursty and people download webpages in a second or two and then read them for several minutes, etc. That assumption might have been valid 10 years ago. It's much less valid today.

So the situation isn't that Netflix is DDoSing the poor little ISP which is doing it's best but just can't keep up. It's that the ISP has KNOWINGLY oversold itself and it's now getting caught in the act and it's wildly pointing fingers at anyone and everyone it can. And it's attempting to re-frame the argument in a fashion that makes them look like the victims when in fact they're the villains.

In reality what Netflix is doing is bending over backwards to try and make their customers (who also by definition are an ISPs customers) get the level of service that the customer has already paid for and has a very legitimate claim against their ISP for in terms of transport from their house all the way to the ISPs peering stations. The ISP isn't upgrading their peering links unless they get paid to do so. They are holding their customers hostage and demanding ransom from people who their customers have quite literally already paid to be able to communicate with.

I can understand how this can be confusing because the ISPs are doing an AMAZING job of framing the argument in terms that make them look like the victims of horrible abuse. But that's simply not the case. They signed up for this "abuse" when they advertised certain speeds and started billing customers for it.

They're basically upset that customers are asking them to make good on their promises because they thought they'd never have to. I am sympathetic to their plight in the sense that I know how much it sucks to make a utilization assumption and to price it accordingly and to get it wrong. But having gotten it wrong in the past doesn't make it OK to continue to get it wrong always and forever.

EDIT: I just reconciled my 100x, 4% math which didn't make any sense.

Does the contract actually say they guarantee 25/5 Mbps? I strongly doubt that.

Bursty traffic and steady traffic cost different, so I think, in order to be honest, ISP should sell two differently priced 25/5 Mbps connection, one priced same as now, and one much more expensive. I predict people will not move to the more expensive pricing. So while there is some deception going on, I doubt people actually want to pay for steady traffic.

The contract says "up to" whatever because an ISP can't make any claims about how fast your link to any and all websites will be, once the traffic leaves their network.

Let's imagine for a moment a very simple case. A network with nodes A, B, C, D and E

A <-> B <-> C <-> D <-> E

Now let's suppose that (A,B) has a 1Gbps link. And (B,C) has a 10 Gbps link. And (C,D) has a 10Mbps link. Finally (D, E) also has a 1Gbps link. What is your ability at A to receive data from E?

It's the minimum bandwidth of all the links that limits your rate. So clearly we can see that the available bandwidth from (A,E) is 10Mbps because that's the limiting factor.

Let's suppose that my ISP consists of just the link (A,B) and they advertise speeds up to 1Gbps. And then let's assume that I can't (at node A) download from node E as fast as I'd like. The problem is that the ISP doesn't have any meaningful control over the link (C,D) because their network only covers the link (A,B). That's the reason that ISPs advertise "up to" a particular speed, because they have no control over what happens once you leave their network.

Now let's suppose that the ISP actually covers A, B and C. In other words they have both a consumer facing link, (A,B) which is the cable modem to POP link. And they have a back-haul link, which is (B,C) to their peering station, which is at node C. Node D is on the backbone providers network and is the other end of the peering arrangement from the ISP to the backbone provider. E is just about anyone else on the backbone network, perhaps Netflix.

In this case the ISP does have some sort of control over the bottleneck link. They can't unilaterally upgrade it like they could (A,B) or (B,C) but with the cooperation of D the 10Mbps link could get upgraded thus providing better (A,E) service to me. Ostensibly when I purchase 25/5 service I am paying to get 25/5 all the way up until the ISP doesn't have control over the network anymore. But here the ISP has DELIBERATELY bottlenecked me ON THEIR OWN NETWORK by refusing to upgrade their half of the (C,D) link.

I am 100% sympathetic to the idea that ISPs don't have any control once traffic leaves their network and thus the 25/5 isn't a guarantee. But the idea that they won't make a good-faith effort to provide 25/5 transit across their own network to a backbone provider but still advertise "up to" 25/5 to me as a customer is completely reprehensible.

If you don't have to make a good-faith effort to provide the 25/5 then why not advertise "up to" 1Gbps or 100Gbps? Customers are never going to see those kinds of speeds but by the logic that "up to" language absolves them of any and all responsibility to actually provide it, why not advertise it?

The reason is that they would get sued for fraud. They have no reasonable ability to claim the 1Gbps number over a link that can never ever get close to 1Gbps, either cable or DSL. What's the difference if they move the bottleneck a single link or two away but still inside the ISPs own network? As far as I can tell it just makes it harder for customers to figure out and thus less likely that they will get caught. The fact that it's confusing and many people don't know how networks work doesn't make it not fraudulent. It just means that it's highly unlikely that enough people will figure it out and start a class-action suit.

Great discussion, all. I wonder if the ISPs have thought about moving customers to 95th percentile bandwidth billing instead, so they can sell packages that are more honest about their overselling and actual expected speeds / usage: http://en.m.wikipedia.org/wiki/Burstable_billing#95th_percen...

Related; I haven't seen anyone point out yet that Comcast (and most other ISPs IIRC) already do have a bandwidth cap, and it looks like they're now on an even more complex model where the pricing / overage varies by market: http://customer.comcast.com/help-and-support/internet/common...

> The ISP isn't upgrading their peering links unless they get paid to do so.

At the same time NetFlix doesn't want to pay to expand their CDN capacity/diversity. Their motivations are exactly the same as ISPs -- cut costs & maximize profits.