Netflix slams ISPs again for broadband caps

The streaming video company Netflix has said more than once that the idea of ISP putting broadband data caps on their service is little more than a money grab on their part. Now the company is using the editorial pages of a major newspaper to get their point across. The Wall Street Journal has an opinion piece today written by Netflix's general counsel David Hyman where he writes, "Bandwidth caps with fees piled on top are a lousy way to manage traffic."

In his editorial Hyman targets AT&T in particular for its use of broadband caps. Earlier in May AT&T announced that users of its DSL service would only get a 100 GB broadband cap while uses of the company's U-verse service get a 250 GB. AT&T charges its customers for going over that cap. However Hyman states that AT&T and other ISPs who have such caps claim that " ... bandwidth is a scarce resource and that imposing caps and overage fees will relieve pressure on high-speed networks."

Hyman, however, says that claims is simply not true, stating, "Wireline bandwidth is an almost unlimited resource due to advances in Internet architecture. Adding more capacity is easy. The marginal cost of providing an extra gigabyte of data—enough to deliver one episode of "30 Rock" from Netflix—is less than one cent, and falling." He adds, "All of the costs of supplying residential broadband are for supporting peak usage. Bandwidth consumed off-peak is completely free. If Internet service providers really wanted to manage traffic efficiently, they would limit speeds at peak times."

Netflix would obviously like to see ISPs do away with such data caps so its customers would not have to worry about overage fees or possibly being banned altogether while watch movies and TV shows from its service. A recent survey showed that Netflix is now the single biggest source of net traffic in the US.

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Bandwidth capping should be for major businesses not residential people. Major business or big Corp. are the one who use the most traffic. This is just like Republicans make the people who are poor to pay more tax where as the rich can just enjoy themselves.

Some ISPs here in Australia has gotten a lot better in the capping department but not so in the pricing dept. I'm on 200GB a month ADSL2+ for $70 and that's with $30 off for being a Telstra customer. The good thing about this is, I being a heavy Steam player, they have unmetered servers for Steam meaning I can download hundreds of GB of data on Steam without it counting towards my monthly usage. I'm sure your ISPs in the US would have similar things.

You're lucky. Here in Canada my ISP also make available most of the TV channels that you have subscribed to online (streaming), but it still counts toward your monthly data plan, even though the data is going through their intranet.

I find that hard to justify..

If you watch 2 movies a day I would say no matter how fast your connection or unlimited your data...get a life and go outside!

dancedar said,
If you watch 2 movies a day I would say no matter how fast your connection or unlimited your data...get a life and go outside!

What people want to do with their life is not your business "homoso" Provide the servers, is up to the user on how and how much they want to sit and use the bandwidth. Data is digital, it's unlimited, use that revenue we customers pay them to upgrade their networking equipment and hardware.

Well...the average usage for playing a high end game like Call of Duty or something like that uses on average 40MB an hour.

Even if you played games for an average of 5 hours a day...and downloaded on average 2 movies a day...you would be hard pressed to reach 100 GB in one month.

Not saying it isn't reachable..but you would have to be a very serious internet user to end up going over 100GB in a month.

If you are going over that number every month...might be time to get outside more.

texasghost said,
If you are going over that number every month...might be time to get outside more.

What about services like Steam, OnLive, and Roku? Add that to your monthly browsing/downloads/gaming and getting past 100GB a month is EASY as pie. Some games on Steam are close to 20GB's. Heck even Bluray movies I watch connect to the internet to download extra content for movies you're watching!

Pretty much everything social these days uses the internet in some form or another. It's really impossible to escape.

Plus, I don't know what type of movies you download but anything I download off PSN that's HD quality is over 4GB per movie. Two of those movies a day would put me at 240GB's in a 30 day month. That's not even counting anything else.

Edited by HolyLiaison, Jul 9 2011, 8:58am :

Geniusguy said,
Glad to be living in a country with no data cap
So your connection is infinitely fast eh?

No? Then you are capped.

God, people whining about three figure caps. Try living in a country (say nz) where a service like Netflix wouldn't be remotely viable because even a 40GB cap will cost you around $100 a month, and that's one of the bigger offered packages.

Cry me a river.

Walrush said,
God, people whining about three figure caps. Try living in a country (say nz) where a service like Netflix wouldn't be remotely viable because even a 40GB cap will cost you around $100 a month, and that's one of the bigger offered packages.

Cry me a river.


God, people whining about 40 gb for $100. Try living in a country (pick any in Africa) where you're born with HIV, ruled over by warlords, and have a life expectancy of 50 years.

Cry me a river.

Memnochxx said,

God, people whining about 40 gb for $100. Try living in a country (pick any in Africa) where you're born with HIV, ruled over by warlords, and have a life expectancy of 50 years.

Cry me a river.

God, people whining about living with HIV and still having a life expectancy of 50 years. Try being DEAD! Oh wait, I forgot, you're too chicken **** to try it.

Cry me a river.

Two tier internet. The rich get fast unlimited connections and the poor get dial up. I been saying this for a while (Not on here but to myself with my tinfoil hat on)

Stup0t said,
Two tier internet. The rich get fast unlimited connections and the poor get dial up. I been saying this for a while (Not on here but to myself with my tinfoil hat on)
Unlimited is going bye bye. Good luck getting unlimited right now in many parts of the worlds. Won't happen!

trashoner said,
Charging more for faster internet connection is one thing but charging for data caps are just ridiculous.

+1

150GB cap is horrible, especially if you live in a house with 5 people.

Sadly the pay per use model works well in the USA so the companies thrive by using it and the taxman don't care because at the end of the day its more $$ in their pockets.

Honestly they should sell you a 'bulk' data amount or sell you a speed. Not sell you a speed and charge you for using it.

You know what else doesn't make sense? An HD digital cable channel requires a constant stream of 5+Mbps to the cable box. Leave the box on for a couple hours and calculate that bandwidth. Yet with the Internet, your full connection is not being fully utilized most of the time, and they act like they can't handle it.

I hope Netflix will specifically point this out soon.

Trueblue711 said,
You know what else doesn't make sense? An HD digital cable channel requires a constant stream of 5+Mbps to the cable box. Leave the box on for a couple hours and calculate that bandwidth. Yet with the Internet, your full connection is not being fully utilized most of the time, and they act like they can't handle it.

I hope Netflix will specifically point this out soon.


Don't think about it man! You might commit suicide...

I seems like if AT&T and other are using monthly total caps to manage bandwidth, they don't understand the concept. Bandwidth has to do with how much all combined customers are using at the same moment in time, not how much total individuals use in a given time frame. WTF. If they are running out of bandwidth, then stop accepting new customers until you upgrade or reduce. Even if a company only offers a 10mb service instead of 40mb, that STILL won't help bandwidth because if enough of those users are downloading something at the same moment in time it will be the same affect on their bandwidth. Speed and bandwidth aren't the same thing. Either you have enough bandwidth for X number of customers to be downloading/uploading simultaneously or you don't!

Xenosion said,
Precisely what I've been saying.

Good because it seems everyone who has a B.S. opinion on this topic doesn't seem to know and we need to spread the word lol. I mean this is A+ computer stuff here and SOOOO many people are not making the connection. No wonder governments can re-write history and control populations so well.

I canceled my Comcastrate cable and I couldn't be happier. Netflix (and the occasional Hulu) is really all I need.

They need to stop offering speeds and then not expect people to try to use it. Comcrap seems to be the only one actually saying "UP TO".

ensiform said,
They need to stop offering speeds and then not expect people to try to use it. Comcrap seems to be the only one actually saying "UP TO".

They say up to "X"Mbps. This is different than what they are combating which is overall usage. That's the problem that a lot of people just don't understand. The problem is with congestion at peak hours which would be a speed issue, not an overall usage issue. All the companies are pretending to be combating the issue but are just limiting usage to get those fee dollars rolling in.

If Internet service providers really wanted to manage traffic efficiently, they would limit speeds at peak times

This times a billion. I have said this so many time even here on Neowin. Some people seem to get it, others not so much. The later just allow companies like AT&T to bend them over in the name of "customer service".

Bandwith throtting should be left to the user not the ISP. Your supposed to be providing a service of ##MB, what we do with it should be our choice.

Simply put - and thats the problem..............its not simple

(plus when someone from one company attacks another companies policies (a company that has an effect on the said persons bottom line), reguardless of if you personally agree and/or if its a legitimate claim, you have to factor bias in there - I'm on his side to a point, but my cynical meter is going nuts at the mo).

duddit2 said,
Simply put - and thats the problem..............its not simple

(plus when someone from one company attacks another companies policies (a company that has an effect on the said persons bottom line), reguardless of if you personally agree and/or if its a legitimate claim, you have to factor bias in there - I'm on his side to a point, but my cynical meter is going nuts at the mo).

FWIW I agree.

I don't see this as one good company fighting a bunch of bad ones, but rather several bullies fighting over how much of your money they each get to take. Netflix is no stranger to making deals -- they proved that getting their hands on the movies & shows they stream -- so if the issues are really as claimed, why aren't they pursuing deals with ATT etc? If the expense at the heart of it really is trivial, why doesn't Netflix offer to pay that? The worst that could happen is providers asking for outrageous amounts of money, proving Netflix' point that these companies are just ripping everyone off, & providing them with a much stronger argument, a much stronger case in the court of public opinion.

(relevant repost from Apple thread)

The next step after net neutrality legislation is to deal with the consequences of net neutrality, including how caps can artificially restrict one web site vs. another.

This is the real reason the ISPs are fighting net neutrality.

They want to force bandwidth fees on both ends of the stream, we the end-user and the upstream providers like Netflix.

This way, they get to double dip on what is actually the cheapest part of what they do...bandwidth. It only costs them a penny per gigabyte.

And they don't have to spend on their real hard costs, necessary infrastructure improvements (you know, to remain COMPETITIVE).

Profit+Profit+Profit = PROFIT

And is doesn't matter that the rest of the world will pass the US by...again...because of their never-ending ultimately self-defeating "bleed the country dry at any cost" mentality.

+1 to Netflix for being so open and not beating around the bush. It's absolutely true. Instead of paying for cable television a lot of folks pay for Netflix service, or something similar, and stream their television shows and movies through their computer or their console system, such as a Playstation 3 or Xbox 360 (I assume the PS3 has Netflix support similar to the Xbox 360).

With bandwidth caps people are scared to even use their service half the time in fear of bandwidth cap fees.