Google Backs Netflix in Epic Battle With Comcast
Netflix is now paying Comcast for a direct connection to the internet service provider, as it seeks to ensure that Comcast customers experience fewer hiccups when using its video streaming service. And it’s doing much the same with Verizon, another major internet provider. But Google believes this kind of arrangement shouldn’t involve money. The tech giant lets Netflix inside its ISP, Google Fiber, and it doesn’t charge a penny.
“We give companies like Netflix and Akamai free access to space and power in our facilities, and they provide their own content servers,” Google Fiber director of engineering Jeffrey Burgan wrote in a blog post on Wednesday. “Since people usually only stream one video at a time, video traffic doesn’t bog down or change the way we manage our network in any meaningful way–so why not help enable it?”
The post is yet another salvo in the ongoing battle over the economics at the heart of the internet. As Comcast and Verizon begin charging companies like Netflix for access to their networks, many are worried that the big name ISPs will gain too much control over which technologies succeed on the net or which don’t, and companies like Google are pushing back, hoping to prevent a future where Comcast is a de facto gatekeeper for the internet.
That said, Google may have another motivation here. The company owns YouTube, and it would be in its best interest not to have to pay companies like Comcast and Verizon to let YouTube servers inside their networks. But many believe that companies like Netflix should be able to set up servers inside an ISP or directly connect to an ISP’s network–an arrangement known as “peering”–at no charge. They see such arrangements as beneficial to both parties.
On the other hand, ISPs complain that customers who stream video can slow down the network for everyone else. Netflix accounts for over one third of all downstream, fixed-line internet traffic in North America during peak hours, according to a recent report from network equipment company Sandvine. ISPs want companies like Netflix and internet backbone operators–which also move traffic onto their networks–to help foot the bill for the infrastructure required to deliver all of this traffic.
But the backbone operators are pushing back too. Companies like Level 3, argue that ISPs should provide the infrastructure needed to deliver the traffic that their own customers request, and that paid peering deals amount to a form of double dipping in which the ISP gets paid twice for the same traffic. After all, it’s not that companies like Level 3 and Netflix are forcing traffic onto Comcast’s network. Customers are requesting it.
A Comcast spokesperson tells us that peering arrangements amount for less than one percent of the company’s overall revenues. And compared to the amount of money both ISPs and other big internet companies spend on infrastructure, the fees are probably small potatoes. But the real concern is about the long-term ability of a small number of ISPs, such as Comcast, to be able to act as gatekeepers between content providers and end users.
That’s where Google Fiber comes in. The service was originally meant as an experiment that would demonstrate the possibilities of much faster home broadband speeds. But now it’s becoming a countervaling force in the ISP market. The project is starting to turn into a real business. It launched in Kansas City, Kansas in but is now in the process of expanding into Austin, Texas and Provo, Utah. Google is also in talks with nine other metropolitan areas, and has already struck a tentative agreement with Portland, Oregon.
But while Google Fiber is a welcome competitor, its reach is still extremely limited. And Google’s ownership of YouTube will be as much a conflict of interest as companies like Comcast and AT&T owning television services. In other words, this fight is complicated–and it’s not ending any time soon.