[AusNOG] Netflix, AWS and Softlayer vs. Australia

[Joshua D'Alton]

There is a couple reports I can't seem to find in my bookmarks, but they
detail that backhaul costs have been the majority for at least the last
decade (iirc one from iiNet back in 2003 or so). And certainly when
compared with transit "internet" costs, something like a factor of 5 if I
remember.

So really these ISPs are already dealing with these kids, and others, who
do multiple TB per month already. And they allow it because of how the
overselling works out, they budget on X users using Y backhaul on average,
and they provide Z bandwidth quota to all of them knowing only 5% will ever
use more than 10-20% of it. Netflix coming probably wouldn't affect it
much, after all the people using 10-20% do already have access to youtube
and other high bandwidth sites.

And if they ever faced massive congestion they'll just shape them, as
you've experienced yourself. Or offer some cheap all-you-can-eat netflix
package as ISPs around the world have handled it (actually with more than
just netflix, in EU Usenet caused similar issues 15 years ago, then
ISP-offered TV streaming 10 years ago, again to combat lack of multicast
otherwise).

Likewise with SL, they won't actually allow a bunch of kids paying $200/mo
to push Gbps of traffic even over peering. You'll probably find the 20TB
currently being offered in Melbourne is just there so it looks seemless
with their other locations (ignoring the +$50 for it), if it gets abused it
will be back to 2TB for +$50, or 20TB for +500 which they've done before
when people abused them.

On Tue, Dec 2, 2014 at 4:42 PM, Oz Nog <oz.nog at yandex.com> wrote:

> A fat load of good your excellent interconnectedness is going to do you
> when all the costs are in last mile backhaul.
>
> How many kids like that can your ISP business take?  Where's that money
> going to come from? Your fat cat ISP margins?
>
> To add insult to injury, in addition to the kid and his 1Gbps server, you
> already know that you are in for minimum 30% base rate increase in domestic
> backhaul costs as soon as Netflix lands.
>
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