AT&T to Netflix: if you don't bribe us to do our job, you're asking for a "free lunch"



AT&T or Insurance companies - Who are the biggest assholes on the planet ?

Unfortunately, we will all find out the hard way,.


And of course he is wrong about his USPS example too. That neighbor did help pay for the delivery of the piece of mail because his taxes went to the upkeep of the roads that USPS uses. This actually fortifies the Netflix argument even more.


My understanding is that part of the problem is NetFlix’s ISP, Cogent, is just a crappy peering partner with ATT sending way more data into ATT’s network for delivery than they ever receive back from ATT for delivery to the Cogent customers.

Peering arrangements are voluntary at major exchange points. If you are peered with a network operator but not holding up your end of the peering arrangement either party is free to dissolve the arrangement or offer to move the arrangement from free peering to a paid for transit agreement.

It should also be pointed out that an ISP like ATT that has a great number of household/retail customers might by definition be expected to have difficulty finding peering partners that are truly symmetrical peers because household/retail customers are consumers of media and content, not producers.

This is obviously not the whole issue for ATT, but it is part of it.


I understood the problem the same way you describe. But a recent post elsewhere was enlightening. I can’t remember where, so pardon me while I mangle the facts and logic.

Netflix contracts with Cogent, which is notorious for being the “Walmart of ISP’s.” Cheap, low quality, etc. Cogent insists on a peering relationship with AT&T and others. i.e. free connections back and forth.

Peering makes sense if you are sending and receiving similar types and amounts of data. But the data between Cogent and tier 1 ISP’s is asymmetrical. So AT&T feels like they are doing the bulk of the data hauling relative to Cogent, but Cogent is the one getting paid.*

In response, AT&T doesn’t give their best effort to building or maintaining connections with Cogent. They see them as a parasite and do the bare minimum. Netflix service suffers and they complain.

So when AT&T and others say Netflix is trying to get something for free, they honestly believe it and don’t think it has anything to do with net neutrality. In a sense, they have a point. It’s not Netflix data that is being throttled, it’s Cogent data because Cogent isn’t paying enough.

  • Analogy time: Peering is like two trucking companies agreeing to haul each others’ stuff, but not charge each other. In this case, Cogent is like a short haul company charging its customers short haul prices, but expecting AT&T to handle the long haul end for free. Same kind of work, but more expensive. One party feels ripped off, so supplies smaller, slower trucks.

You beat me to it. Sorry to everyone for being an echo.

That’s easy: the politicians they empower to let them be even MORE of an asshole, and get away with it. . .

1 Like

It’s pretty interesting how this argument is heating up. Should make 2014 pretty interesting for the internet in the US.

I’d really like AT&T or Comcast to detail what it is customers are actually buying when they sign up for internet access, but they’ve been very careful to not mention that at all in the communications released to date.

Here’s hoping the FCC acts like the regulatory body they’re supposed to be and avoid having policy purchased by the “last mile” ISPs.

I see it a lot differently…

Through most of the 90’s I was a co-founder and chief technologist for an ISP – the business that ATT claims to be in.

Our business model was pretty simple: people would pay us money every month, and in exchange we would try to deliver them the content that they wanted. If some great “killer app” of the Internet would have been devised, we would have wanted really good connection to that app because that would make our service better and more valuable to our customers (the folks who were paying us for service).

Granted I haven’t been an ISP for a long time, but the arguments of asymmetry of traffic are IMO disingenuous. Back in the early days of CLECS (Competitive Local Exchange Carriers) that argument could be made: a payment was made from one carrier to another when a voice call was passed between networks, and asymmetric traffic could result in asymmetric payments. Some smaller CLECS made a killing on this (a friend of mine bought a phone switch was was rinding high on the hog for a while…). But given current peering – where no money is exchanged and given the fact that high-speed data lines are inherently asynchronous, that argument doesn’t really hold water.


I think the better analogy here is that AT&T owns a parking lot. They charge monthly fees for people to park there anytime they want, but they sell passes to more people than there are spots. Then they bitch when The Police have a reunion tour at a park nearby, and every one of their customers wants to park there.


Not only that, but: say you’re using FedEx’s SmartPost service (which hands off delivery to USPS for the final delivery to the recipient). I haven’t used the service myself, so I could be wrong here, but… if the USPS was not getting enough out of the deal to handle that, I’m pretty sure they wouldn’t be able to go direct to the sender and demand more money. That deal’s between FedEx and USPS.


That’s very interesting context, thanks.

From what you said, it seems like AT&T is grumpy about their arrangement with Cogent, but depends on them enough that they choose to maintain the peering relationship.

Since they can’t boss around Cogent directly (because they’re mutual peers), instead they want to change the definition of peering from “I route all the traffic you send to me, and vice versa” to “I’ll pick and choose what traffic from you I want to route, and vice versa”. Which is pointless for Cogent, since the traffic they get from AT&T would be random small consumers, none of whom are important enough to filter or throttle. But very useful indeed for AT&T, since it gives them the power to extort major Cogent customers directly under whatever terms AT&T wants, rather than having to negotiate with Cogent on the terms of the peering arranagement.

It’s remeniscient of union-busting, when I think of it in those terms…


Why so glum? I thought this was just part of the much lauded “American way” we keep hearing about.



the biggest issue here is that AT&T refuses to break their peering with cogent and instead is throttling CERTAIN traffic, but not ALL. it’s picking and choosing what it sends unmolested and what it doesn’t. if cogent was causing trouble they could depeer cogent and force them to pay to route traffic but they won’t instead they choose to bully netflix directly, because it’s not about cogent it’s about extortion.


Your understanding seems to be correct as far as peering agreements go, but the implication that this is what is being disputed is incorrect.
If it was correct, then AT&T (and Comcast) would be saying that Cogent wants a free lunch.

Netflix has an agreement with Cogent (No free lunch there), and Cogent has an agreement with AT&T that AT&T is not happy with. That’s as close to objective truth were going to get here, and it needs sorting out but that’s really a matter between Cogent and AT$T, what follows is what we should really be discussing:

If the issue is Peering, then its a Cogent-AT&T issue. Why is AT&T PUBLICLY SHAMING Netflix? And Just who is responsible for Netflix traffic?

Netflix doesn’t just “flood” AT&T’s network with data, rather, its AT&T’s customers who request data from Netflix isnt it?

The fact that AT&T’s subscribers are the ones that create the high demand for data is being completely glossed over here because then AT&T would have to argue that as it brings more customers on board, who came to AT&T for the Netflix BTW, then Netflix is being greedy because it won’t pay AT&T for what is customers paid AT&T for!

And if that arguments reads as tortured, you’re right, which is precisely why AT&T is framing the discussion another way!

The TL;DR:

Yes there is a peering agreement that needs to be settled. No, its not between Netflix and AT&T.
AT&T just wants to shame Netflix into entering into an agreement directly with them ($$$).
This is why net neutrality both matters and is at the very core of the argument here.
When AT&T can hold its customers hostage form a provider and claim a tithe on both, everybody suffers.


The problem is not the agreements between Cogent and AT&T and Netflix. The problem is MUCH more simple. AT&T set up a business model. Companies and customers are playing by the rules of that business model, and now that business model is not as lucrative for AT&T as traffic increases. So now they want to change the model. One more analogy - I’m playing a board game that my kids designed and then he notices that I’m winning by a longshot, so he decides that he wants to change the rules mid-game. Why not? It’s his game, right? Well, in this case, if AT&T wants to change things up and it’s within the scope of everyone’s contracts, that’s fine. They just need to be prepared if/when customers flee when they don’t get what they want.



Except customer’s cant really flee, in many cases, there aren’t any other options and other ISP’s are starting to do the same thing, this is exactly what already happened with Comcast after all.


Yep. And THAT is where the regulators need to step in. But it’s hard to understand the problem and hear counter arguments when your ears are stuffed with rolled up dollar bills.

1 Like

Yeah, I don’t think this is a situation where “the market” will resolve the problem through supply and demand. The market has been captured and monopolized by players like AT&T.

What we need is for the public (i.e. you and me) to remember that we GRANTED AT&T the right to use our public space for their telecommunications business. At base, we are all the partial owners of the physical telecom infrastructure, because those lines are strung through our property. If we don’t like how AT&T is using the privilege we granted them, we are free to change our relationship with them. I.E. take back all that fiber they stuck all over public streets, all that RF spectrum space we granted specially for them to use, etc.

AT&T is in business because the public grants them the resources they need to operate. If they’re not operating in the public interest, we should take those resources back.