Verizon is trying to extort Google by getting them to pay for interconnects and Google wants nothing to do with it.
I don't think that's right.
At its most basic, an interconnection agreement says “You carry some traffic for me, in return for which I’ll do something—either carry traffic for you, or pay you, or some combination of the two.”
With Netflix and Google, both were basically saying, "we're not going to pay you (Comcast/Verizon) for access to your network, because we're important enough that we shouldn't have to." They don't have their own ISP networks to exchange traffic at the same rate, all they have is their services, so they don't have anything to offer the ISP in return.
So it's disingenuous to say that service providers (Google, Netflix), are extorting anyone. They don't see themselves as ISPs, but they are setting up their own interconnects to provide faster access to customers, so they assume they are exempt from what were traditionally informal interconnect rules.
> So it's disingenuous to say that service providers (Google, Netflix), are extorting anyone.
I don't think anyone was saying that.
> With Netflix and Google, both were basically saying, "we're not going to pay you (Comcast/Verizon) for access to your network, because we're important enough that we shouldn't have to." They don't have their own ISP networks to exchange traffic at the same rate, all they have is their services, so they don't have anything to offer the ISP in return.
Generally peering agreements work on total bandwidth and generally you try to make it as balanced as possible, so there's no cost to either side, as traffic may traverse your network from the peer but not terminate there (it continues through another peer), and that's just a load you bear, but the other side has the same risk.
For an end service peering, that's not really as much of a risk, to my knowledge, so what you have is purely a win-win, where Netflix delivers content directly to your network so it's quicker, and you aren't using up peer bandwidth and backbone connections to serve that same content. In any market where Comcast/Verizon didn't have near monopolies over large areas, Netflix could easily charge for this access given their size and ubiquity. That some large ISPs are actually throttling the content only highlights the perverse incentives at play.
That's somewhat simplistic. Peering that's somewhat one-sided can have fees built into one side. Still, getting a large chunk of your content quicker and without overloading your other peers or upstreams means that Netflix and the like should have the power here, and if they desired could charge for this better access (it is one-sided, as mentioned before). It's totally backwards that Comcast/Verizon would be throttling them instead, and is only possible because they don't really compete in a fully open market.
And yet ISPs happily provide vastly asymmetric pipes to the end user, ergo they're _physically incapable_ of playing the peering game in fair sense of the word either.
But they still want to enforce those "agreements"... when it suits them.
I don't think that's right.
At its most basic, an interconnection agreement says “You carry some traffic for me, in return for which I’ll do something—either carry traffic for you, or pay you, or some combination of the two.”
With Netflix and Google, both were basically saying, "we're not going to pay you (Comcast/Verizon) for access to your network, because we're important enough that we shouldn't have to." They don't have their own ISP networks to exchange traffic at the same rate, all they have is their services, so they don't have anything to offer the ISP in return.
So it's disingenuous to say that service providers (Google, Netflix), are extorting anyone. They don't see themselves as ISPs, but they are setting up their own interconnects to provide faster access to customers, so they assume they are exempt from what were traditionally informal interconnect rules.
[1]http://www.interisle.net/sub/ISP%20Interconnection.pdf