Forget P2P. Now ISPs Really Hate Netflix

Oh Netflix, for $8 a month I can watch hours of online video in high-definition — sometimes streaming multiple movies to different devices in my home. I love you, but it’s clear my Internet Service Provider would rather see you throttled, or quite possibly set up a toll to make sure those precious bits you’re streaming don’t fall in cost too rapidly.
Last October, Sandvine reported that 20 percent of the web’s traffic is generated by Netflix (s nflx). That’s just the tip of the iceberg; ISPs are faced with the possibility that online video streaming subscribers will only continue to grow and consume ever-more ’90s sitcoms or indie documentaries. Culturally this is dire, and yesterday, Mu Dynamics, a company which aims to provide some tools to help ISPs anticipate how specific applications will affect their network at scale, released data showing the Netflix threat is so much worse.

Mu measured Hulu, YouTube (s goog), Amazon (s amzn) and Netflix based on how many bits each service delivers and by how many connections back to their home servers the services required, and created a chart which shows Netflix may not be in the axis of evil, but it’s certainly in the wrong quadrant. However, to be fair, these are only for the high-definition versions of each service. When viewing standard-def video, the positions shift a bit, although Netflix is still delivering a ton of bits per second. That keeps it from being consumer-friendly, although it does shift to a more favorable position for operators, who have fewer connections to fret over.

Mu provides an intriguing service with its technology, which can look at an application like Angry Birds and extrapolate how a sudden adoption of that app might muddle the network. However, it misses a huge point in its analysis by naming Netflix bad for consumers as ISPs begin implementing broadband caps. This isn’t a problem created by Netflix or any of these video services, but by ISPs themselves. In fact, Netflix recently decreased the quality of its streams in Canada to help consumers affected by bandwidth caps.
Frankly, the hubbub and attacks around Netflix are getting tired. Years ago, Google was the favored Internet devil, and then P2P file sharing bore the brunt of the vitriol. But now that P2P usage has waned and Google is a huge company and somewhat willing to play the ISP game, it’s time to find a new scapegoat for why the telecommunications industry needs to institute caps and tiered pricing on wireline networks (wireless is different). Netflix is that scapegoat, and today’s “data” from Mu provides an easy visual for ISPs to flash around in their quest to demonize Netflix.