Earlier this year Netflix customers started to unsubscribe because of slow speeds that they complained made Netflix unacceptably unusable. There was a lot of speculation if Netflix’s readiness to pay Comcast for premier bandwidth would make a different. Recent studies by the FCC have confirmed this speculation.
The World has fallen in Love with Online Streaming
The world is falling in love with online streaming services like Netflix, and ISPs have to face the brunt of this romance.
Netflix recently celebrated when it hit the 50 million subscriber mark. Considering the fact that Netflix is a US based online streaming service that primarily caters to the US market, this means that there are 50 million people who can stream the favorite content 24/7. That is a lot of traffic load that ISPs will have to consider in their bandwidth management.
Netflix was Growing Desperate
Netflix was growing desperate! It had to reach an agreement with a third party that could help ensure quality streaming services free of lag and latency. The tough part was that it couldn’t increase its fees because that would mean losing current and potential customers.
On the other hand, ISPs like Comcast are still running into bandwidth congestion issues because of the streaming traffic. Expansion of bandwidth means the diversion of capital and ISPs are not willing to bear the full brunt alone.
Companies like Google and Amazon (who are also major members of the online entertainment industry) were quick to agreements with Comcast to ensure that users are able to get priority speeds when they use their services over Comcast. Netflix insisted that the slow speed and bandwidth congestion is the ISP’s (Comcast in this case) problem and responsibility, while Comcast insisted that Netflix should take responsibility for its user base.
ISPS Might Over-Charge Streaming Customers
There is speculation that ISPs like Comcast will soon charging streaming customers more based on streaming buckets to handle the extra data load from streaming customers. ISPs will have the option to either charge the customers; or online streaming service providers; or both, for the extra load that this will place on their bandwidth.
Advocates who are calling for a charged system are quoting examples from across industries where (in a hypothetical scenario) a service provider will go bankrupt if every customer decides to refund or en-cash at the same time.
ISPs Blame Streaming Services (including Netflix)
ISPs and streaming services alike have the right to charge whatever they want. But ISPs believe that the cost of the extra traffic that originates from streaming services (which has been estimated to account for around a third of all traffic) should be shared by the streaming services.
Others insist that Comcast throttled streaming speeds on purpose so that Netflix had no other option but to follow Google’s and Amazon’s footsteps and pay Comcast.