[AusNOG] Netflix, AWS and Softlayer vs. Australia

[Mark ZZZ Smith]

----- Original Message -----
> From: Oz Nog <oz.nog at yandex.com>
> To: Joshua D'Alton <joshua at railgun.com.au>
> Cc: Mark ZZZ Smith <markzzzsmith at yahoo.com.au>; "ausnog at lists.ausnog.net" <ausnog at lists.ausnog.net>
> Sent: Wednesday, 3 December 2014, 0:40
> Subject: Re: [AusNOG] Netflix, AWS and Softlayer vs. Australia
> 
> 02.12.2014, 13:04, "Joshua D'Alton" <joshua at railgun.com.au>:
>>  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.
>       I'm sure you are right. What has changed, and I do believe this makes 
> a difference, is that domestic content origination has become affordable for all 
> traffic types including video streaming. Earlier there was back-pressure from 
> either high local costs or high latencies when hosting from overseas. Now that 
> resistance has disappeared leaving the flood gates wide open.
> 
>>  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.
>       I think you are underestimating the potential levels of traffic that 
> Netflix will likely bring. Latest reports from the US indicate that Netflix 
> accounts for about 30% of all traffic, which is huge. Since it will be all new 
> and additional traffic in Australia, that 30% of all traffic turns into 50% more 
> traffic than the current level of traffic in Australia.
> 
>       Remember, in the US they also have capped broadband.

>From the articles I've read ever since capped plans were started to be introduced in the US (by Comcast IIRC, at 250GB a few years back IIRC) they haven't been very popular at all. Here's a fairly recent article showing how 'successful' they have been:

"TWC Subs Say No to Data Caps"
http://www.lightreading.com/services-apps/broadband-services/twc-subs-say-no-to-data-caps/d/d-id/708194


"In fact, the number of subscribers taking the use-based service tier is running only "in the thousands" -- a very tiny slice of the MSO's roughly 11 million US broadband customers."

> I'm sure 
> you've all read the articles where US broadband users complain that they 
> can't watch Netflix at full quality as often as they like even with caps of 
> hundreds of gigabytes.
> 

Maybe other people on the list have, but I haven't come across any. Can you link to at least one of them? 

> 

>>  And if they ever faced massive congestion they'll just shape them, as 
> you've experienced yourself.
>       Ain't that the truth. Such a sad future, a spanking new (partial) 
> fiber NBN throttled to whatever backhaul costs the ISPs can bear. Don't 
> quite call that progress.
> 

Well, NBNco had to make the FTTN network appear to be commercially viable, so they, as the monopoly infrastructure provider, will charge and will be able to charge what they need to.

Telstra must be rubbing their hands together. They offload their copper and HFC networks, and as they've heavily and will more heavily invest in wireless, NBNco's high wholesale prices are going to make wireless broadband more attractive to consumers, despite its relative inadequacies compared to fixed line technologies. As "Most digital growth is now mobile":

http://www.businessinsider.com.au/the-future-of-digital-2014-slide-deck-2014-12#-79


and "Mobile video is booming ...":

http://www.businessinsider.com.au/the-future-of-digital-2014-slide-deck-2014-12#-82


and therefore everything is optimised for the common case of mobile, the technical benefits of fixed line lose a lot of their value.

(And here is another presentation from May from the VC firm that where early investors in Google, Facebook, Amazon, Juniper etc., etc. that says the same sorts of things):

"Internet Trends 2014" -
http://www.kpcb.com/internet-trends


>>  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).
>       I don't see how this would help the ISPs since they'd still have 
> to eat the cost of domestic backhaul for any included services.
> 
> 
>>  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.
>       This is actually news to me. Do you have any sources I can read? I've 
> had no problems so far in Singapore which also includes the 20TB per server as a 
> baseline and that's not a low cost market either. Been with SL in Singapore 
> since they opened.
> 
>> 
> 
> Cheers,
> 
> Baz
>