Disclaimer: Mike’s views are not necessarily those of EB Media
Netflix is now paying certain internet providers a fee for direct connection to their internet service provider. This is in efforts to aid two specific companies: Comcast and Verizon. Imagine, having little to no errors with video playback or quality. This can be best described as lag less streaming. In addition, the thought of not having any video discrepancies, such as a black screen or loss of audio, further solidifies Netflix is making such a move. Overall, they are seeking to make sure that you, the customer, remain happy. If you are happy, you will tend to either continue the service or ramp up usage. On the other side of the spectrum, Google Fiber, doesn’t charge Netflix even a penny.
Google Fiber can best be described as the new kid on the block. They are the cool, suave, and saviors of the ISP (Internet Service Provider) wars. Comcast and Verizon are only coy in a pond compared to the whale of a size Google Fiber is. This is due to the fact that Google Fiber gives a person the best bang for their buck. Sadly, it is only in a handful of cities for now. Maybe one day, Google Fiber might invade the biggest cities of America such as New York City and Los Angeles.
“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 just another torrent in the ongoing battle over the economics at the heart of the internet. The monetization of every nickel and dime seems to be a priority. This results in a lack of quality featuring a monopolization business. 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. Companies like Google are pushing back, hoping to prevent a future where Comcast is an actual concierge for the internet.
That said, Google may have another motivation here. The company owns the wildly popular YouTube. 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.The real concern is about the long-term ability of a small number of ISPs, such as Comcast, to be able to act as concierges 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 countervailing force in the ISP market. The project is starting to turn into a real business. It launched in Kansas City, Kansas 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.
Mike has a strong fascination for all things business. He currently studies at the NYU Stern School of Business and is intrigued by Economics, Marketing, and Trading.