ISPs charge me primarily to download. Literally I can't upload as much as I download. My uploads are contractually limited to 20% of my downloads.
So does that mean there's a downloader-pays rule?
If so that means that Verizon should be paying Level3 because it consumes 3x the bandwidth that it provides.
Verizon's needs Level3 3x as badly as Level3 needs Verizon on a bit-by-bit basis. So why isn't Verizon paying Level3 for the imbalance?
There are actually two sides to the ISP game. There's the consumer ISP side and there's the commercial ISP side.
Consumer ISPs are in business to get their customers hooked up to as much of the internet as possible to enable them to consume things. And they charge their customers (normal folk like us) for this service.
Commercial ISPs are in business to get their customers hooked up to as much of the internet as possible to provide services. And they charge their customers (big companies) for it.
When commerial ISPs meet consumer ISPs typically they say "let's trade traffic for free so that way we can both keep our money and not worry about accounting"
What's happened is that a consumer ISP is trying to charge more than just it's last-mile normal customers for data that they use and which it is ostensibly contractually obliged to provide to them without further fees.
What Verizon is saying is "look they need to pay us to upgrade this link" which on the surface doesn't sound too bad. It kinda makes sense. If I used more bandwidth they would charge me more. But the thing is that I am already paying them to make sure that the connection to the internet is uncongested. They are deliberately allowing it to get congested to try and bill both sides of the transit.
They may have a peer balancing agreement, which is not being held up, but they're also still being payed by their customers to provide access to content outside of their own network and Verizon is enforcing a limitation from another agreement (the peering agreement) that is affecting their ability to provide the content their customers want to have access to.
You can't have it both ways. Or... I guess you can, as Verizon has shown.
Commercial ISPs vs. Consumer ISPs is a useful way to frame the issue. From an economic perspective, the big difference is that the Consumer ISPs generally have a monopoly over the Consumer endpoints, while the Commercial ISPs do not have a monopoly over Commercial endpoints and must negotiate a competitive market.
This obviously gives the Consumer ISPs pricing power in all of their business dealings (including any peering contracts that they force the Commercial ISPs to sign). The fact that Verizon owns RedBox (a Netflix competitor) & sells TV packages is just further motivation for hampering the interconnection.
Yes I'm well aware. A good friend of mine works on the commercial side. He is a programmer that is basically in charge of all their route-finding algorithms internal to the commercial side of the network. It is completely separate from the consumer side.
On the commercial side they provision a link from point A to point B (which is what his software figures out) and it's dedicated bandwidth. They are never over-subscribed.
I'm almost positive that this is not how they do things on the consumer side. Otherwise the Netflix debacle wouldn't be happening. But basically the consumer side is always over-subscribed and by a reasonably large factor. They're counting on consumer traffic to be bursty which it normally is. Netflix isn't bursty the way they're used to.
I sympathize with the idea of expecting one thing when building a model and seeing it play out differently. It sucks and it can cost a lot of money to make good on promises that you've made. But remember that Verizon is the one that made these promises. Their customers didn't put a gun to their head and say "promise me these crazy high download speeds or else!", Verizon did it willingly to try and steal customers from their competition.
Because they did it to themselves I have little sympathy.
Netflix debacle is Netflix choosing not to pay for CDN and instead asking ISPs to take thier CDN for free or we overload your interconnect ports and blame you for it on our site.
So does that mean there's a downloader-pays rule?
If so that means that Verizon should be paying Level3 because it consumes 3x the bandwidth that it provides.
Verizon's needs Level3 3x as badly as Level3 needs Verizon on a bit-by-bit basis. So why isn't Verizon paying Level3 for the imbalance?
There are actually two sides to the ISP game. There's the consumer ISP side and there's the commercial ISP side.
Consumer ISPs are in business to get their customers hooked up to as much of the internet as possible to enable them to consume things. And they charge their customers (normal folk like us) for this service.
Commercial ISPs are in business to get their customers hooked up to as much of the internet as possible to provide services. And they charge their customers (big companies) for it.
When commerial ISPs meet consumer ISPs typically they say "let's trade traffic for free so that way we can both keep our money and not worry about accounting"
What's happened is that a consumer ISP is trying to charge more than just it's last-mile normal customers for data that they use and which it is ostensibly contractually obliged to provide to them without further fees.
What Verizon is saying is "look they need to pay us to upgrade this link" which on the surface doesn't sound too bad. It kinda makes sense. If I used more bandwidth they would charge me more. But the thing is that I am already paying them to make sure that the connection to the internet is uncongested. They are deliberately allowing it to get congested to try and bill both sides of the transit.