It is based on needs. A company needs to deliver their traffic to a network. That network also needs to deliver their traffic to the company. It would usually go over transit which can cost a lot of money. As a business decision, they decided to send each other's traffic and call it even. This is not rocket science people! It is business! Generating random data doesn't help, because it is not fulfilling the need of one of the networks to deliver their data. In a content to eyeballs situation it is pretty clear which way the demand is.

I read a article only recently that described Google's setup at their first colo. They needed to send data to their customers. That is what the colo normally does: host servers that send content to eyeballs. Google on the other hand needed send and receive so that they could connect to web servers around the world and index them. Google cut a deal with the colo to give them dedicated connections for their indexers at a reduced rate. Why? The colo had symmetrical links. Most content flowed out of them, with little flowing in. Google needed lots of *incoming* bandwidth. Simple supply and demand. The colo had a huge amount of incoming bandwidth that no one was using. That makes it cheap!

Does no one understand simple economics anymore?

They didn't have to "degrade" anything. Cogent was sending data at a higher rate than the port allowed causing congestion. All Comcast had to do is stand back and watch it happen. Cogent should have moved Netflix traffic to another port outside of existing peering agreements. And that is basically what happened when Netflix took over and setup their own peering agreements.

Easy! Just bring fiber to the neighborhood. Then install a box next to the PSTN punch down box for the neighborhood. Then run power to the box. Then install a VDSL+ DSLAM. Profit! This is how AT&T u-verse works. Problem is even AT&T has trouble getting permits for their boxes. Not to mention getting fiber to the box requires permits. I wonder why so few companies try this? Maybe this is easier said than done. Oh well.

If people want better Internet in their area, complain to the city. Try to make it easier for companies like Google Fiber to provides last mile. Complaining to the FCC will just make things worse. Can you imagine if the peering review process went smoother depending on political connections?

Based on what is happening with video these days, I don't know that video is all that profitable. People are not subscribing to video anymore and the content providers are raising their rates, which causes higher sub costs, which causes more people to stop subscribing. On the other hand, everyone wants Internet for their iTunes video. The only real money in video is live sports.

The main point of your response is that it isn't fair. So what? Netflix is willing to pay for now. If you want real movement on this issue doesn't wine to the FCC, get involved with your local government to encourage more last mile providers. Heck, why don't *you* buy some fiber and setup your own ISP. Setup some high speed wireless links. Join a mesh meetup or create one. Beam to a block and run fiber down the boarder of the properties. That is what we did with some high rise MDU's.

Paying for peering *never* ever happened before Netflix? Really?

Netflix paying for peering is not ransom. Paying for peering is what happens all the time. Even if you have a "settlement-free" peering link, you will still have to pay if traffic going one direction goes outside what is considered acceptable in the contract. Netflix would rather pay for peering than increase their transit costs. Simple as that. It is a business decision. It would have been interesting if Netflix decided to cut all peering so that Netflix traffic would have flooded ISP's transit links. *Everyone* would have started to complain. What would the cable companies do in that situation? If they started to shape the traffic from Netflix, then things would get interesting. This "fast lane" talk is stupid.

Probably. So what is wrong with that? "Interesting" to Google Fiber would be a content provider that is starting to use up enough transit bandwidth that it makes sense to move them to a peering port. That is always how things have worked on the Internet.

...even if some party has to pay for it. Google is an ISP so their peering traffic is not equal. It is good for them and their customers to peer with as many popular content providers as possible. Connect eyeballs to content. I keep pointing out that Yahoo! did this years ago with huge success. It was reported that Yahoo! only payed for half of their total bandwidth requirements. That is, only half of their total bandwidth requirements were going over transit. This was years ago. "Fast lanes" are not new.

The difference with Netflix is that they had to pay the ISP for their peering. This is new. Even so, it still may work out for them. The the peering costs may still be cheaper than their transit or using a third party CDN. Like Google Fiber pointed out, peering does not prioritize traffic, it just makes links to networks. If peering is an unfair fastlane, then the Internet has always been "unfair" since peering is an integral part of the Internet.

So why does Netflix have to pay? It is called supply and demand. The market pressures are such that Netflix *wants* to pay to get their data delivered directly. I suppose they could have backed off and stopped using any sort of CDN with peering to ISPs. But then their transit costs would have gone up. I suppose Netflix could have done this and really slammed the ISP's transit connections until *every* customer was complaining about terrible performance. Netflix decided it was less expensive and better for their customers to pay ISP's for peering. Is this fair? As the saying goes, "Life is not fair." Deal with it.

The best way to deal with the situation is for cities to encourage new ISP's to build out last mile connections. Make it easy without a lot of red tape. Phone companies and cable companies will yell and scream, but there is nothing they can do legally. It is up to the city to manage right-of-way so that things don't get messy. So instead of complaining to the FCC, go to your city council and see what can be done to encourage Google Fiber to come to your city.

Absolutely! But there are cases where IaaS is useful. Combining IaaS with docker by way of something like OpenShift (RedHat's PaaS) is very powerful. I think that is the direction that everything will go. OpenStack will be there, but a bit more hidden. People will use higher level API to handle deployment of their apps. OpenStack is just the API to build those higher level services. That means that something like OpenStack is still needed. That also means that hardware that works with OpenStack is very useful. It helps standardize the idea of automatically building out entire infrastructures.

To really make use of the cloud, don't put traditional apps on it. It is not designed to run things like MS Exchange.

If you work in a software development shop, especially a web app, then cloud is awesome. Think of cloud as an API. That is where the real power is!

We have a continuous integration and continuous delivery pipeline. The entire deployment is described in software using Amazon's API. We abstract our infrastructure as code so we can replace it with Openstack if we need to. Amazon's API far ahead of anything else out there, so right now we don't really need to switch. This system is extremely powerful. We can bring up entire testing environments the the execution of a script. In system configuration is driven with Chef, but even some of those scripts use the Amazon API to help discover information about the environment.

VMWare provides some of the features, but nothing like Amazon offers. VMWare is also designed for a traditional IT cycle where you can about running a VM for more than a year. Cloud thinking makes more using of disposable nodes. A machine may not last a month because it is replaced with an entirely new image.

So, IF you write software correctly, having an in-house cloud API is extremely useful. Having a cloud API that a standard is also very useful. Start small with a public provider (Rackspace), then bring in-house as the business grows (RedHat Openstack). When the business needs somethings more elastic, that same API can be used with third party providers to supply the computing when it is demanded (Rackspace).

Cloud API's are new. Give it time.

I have my doubts that more FCC control over the Internet will cause less money to flow into politics. I also have doubts that just because the government is involved that there will be less playing of favorites. I can see the disaster coming when the FCC has their say in peering because of the Netflix deal. If a company gave to the right party in power, then that company gets their peering arrangements approved faster than ones that do not. Yeah, right, the government is *never* corrupt.

That is settlement-free peering. Peering is just two networks trading traffic. It does not have to be equal. Being equal just means that it makes it a no-brainer business decision.

Ummm... No. Peering agreements have always been setup that the party that sends more than is received, pays. If they are almost equal, then it is settlement free. Netflix is doing nothing new. The article even states that the Netflix case will be looked over at a later time.

Ummmm... peering is how the Internet works. If the traffic is not equal both directions, then someone pays. This is the way it has always been. Why is everyone so worked up about it? NOTHING NEW HERE!

Yahoo! did this YEARS ago. They had their own national network for their own traffic. They would directly peer with large ISPs so their content did not have to travel over transit connections. It was stated that Yahoo! only payed for half of their total bandwidth because the peering reduced the cost of their transit.

Netflix is doing exactly the same thing. Only their bandwidth requirements are much bigger than Yahoo!'s.

Netflix didn't breach contract. Cogent did by going outside the agreed ratio for peering. When that happens, the person taking on the extra traffic gets payed to transport it. Cogent wasn't prepared to handle all the extra traffic Netflix generated. They needed to charge Netflix more for the service so they could cover their transport costs with their peers. They also needed to upgrade the links.

Again, nothing to do with net neutrality. It is just business.