Someone please clarify my doubts. When I run a server, I have to pay for bandwidth costs. For eg. My website hosted on linode gets me 20TB of data transfer limit. I expect end users to be able to view content worth 20 tb of up/down data transfer. Netflix runs its own servers but the ISP providing connectivity must be already charging Netflix for a certain bandwidth and data transfer limit. If the ISP is charging for data transfer already, I expect the ISP to provide the entire service. For eg. Let us assume that Verizon charges netflix 1 usd per tb of data transfer. And Netflix uses 20000tb of data in a month. Then Netflix owes Verizon 20000 usd a month. And Verizon has to serve the data according to the bandwidth agreed to.
Is Netflix not paying Verizon for the bandwidth and data transfer?
If Netflix is not paying Verizon then why does my hosting provider charge me for bandwidth and data transfer?
I'll let you in on a little secret: paying for bandwidth per usage is for suckers. People think this is the only way to pay for bandwidth, but it's really only cloud providers who charge like that (and make a fortune off the racket). If you buy bandwidth from upstream IP transit providers, or rent a server in almost any non-cloud datacenter, you pay for capacity (e.g. $0.50 / Mbps), not usage. That is, you pay for the size of the pipe, not the amount of data going through it. Once you factor in optimizations like peering with ISPs and cross connect caching, bandwidth costs go way down.
Also, in Netflix's case, they have a box containing terabytes of their most popular content sitting in almost every datacenter and peering with all major ISPs and backbone providers sharing the cross connect: https://openconnect.netflix.com/en/
Cool, let's be partners. I'll provide a service you want to access at 10Gbps, for an hour a week. I've got no connections to Comcast. I'll call up my brother, who runs a little ISP. I buy 10Gbps from him, and so have 5 other customers. You try to access my site. Packet loss ensues.
Since you've paid Comcast, they're now required to go to my brother's ISP and arrange more peering, right? Also, since you're paying, I shouldn't have to pay my brother, and he shouldn't have to pay anyone else, right?
Come to think of it, why isn't all hosting bandwidth free? Why do Azure and AWS charge for outbound bandwidth, but not inbound?
Is it just me, or is charging pennies per gigabyte usurious? If I paid even a penny per gig on my home internet, I'd have nearly a $150 bill just in gig charges, and I know I'm one of the lower bandwidth customers on my block.
Why stay with a host that bends you over a barrel for transit? Even Netflix doesn't use Amazon to deliver their data heavy content, as their pricing is pie in the sky high.
This is probably a reasonable assumption coming from the world of ISP "all-you-can-eat" packages where they're saying "unlimited" but in reality it's not, because unlimited starts affecting other customer so it's "unlimited (T&C's apply)"
This is a completely different scenario though:
* Transferring stuff to linode isn't generally an end in and of itself. There are far fewer use cases for it. At the end fo the day you probably need to get data back out of it.
* The vast majority of cloud hosting and hosting providers in general's bandwidth is outbound. People download from the web. These hosting companies provide a lot of the web's main infrastructure. You're probably looking at a ratio of 20:1 or 30:1 here.
* Linode doesn't pay for uploads and downloads with it's carriers / ISPs. It pays for circuits capable of synchronous upload and download speeds. Using the ratios above, if they, for example, have 300Mbps of traffic outbound, then they have a lot of spare inbound capacity.
* Abuse here is difficult. Downloading movies, music etc. are consumed at home. It's difficult to imagine so many usage scenarios where huge data volumes would be consumed so easily on a linode server without having to be downloaded again. Maybe someone can come up with some creative suggestions here though? :)
* Bandwidth allocation and contention is very different within a hosting providers access network than an ISPs access network. ISP last miles, local DSLAMs, AP's etc. are huge points of contention. Inside the data center, I imagine most hosting providers "last mile" are 100Mb or Gig/E here straight to the servers with gig or 10gig/e uplinks from access switches.
The basic crux really is though, they have shedloads of free inbound bandwidth and why not give it away for another USP.
In North America, bandwidth is becoming more expensive in the form of overage charges for exceeding your bandwidth cap. My ISP charges a ridiculous $2 per GB for anything past 90GB.
Because that's how things work in a lot of other services?
For instance, if you sign up for shared hosting and go over your alloted bandwidth, they may charge you $0.50 a gigabyte or so. That is linear and it seems reasonable.
What would happen if you could stream high-quality video from mobile phones? With large data transfer capabilities would come interesting new possibilities for markets, companjies, and customers.
I really don't understand this thing about charging bandwidth. In France we are used to the free and unlimited bandwidth for all providers and hosters (see OVH, Gandi, Dedibox... but also all ISP), and the rare cases when I had to pay my bandwidth (Hertzner), the service was quite bad (routes issues, ipv6 issues, and the throughput was very inconsistent).
It really seems to me like some providers are trying to charge for anything in order to extract value.
Bandwidth charging models from hosts are crazy. They don’t model their upstream costs in any way. Transit providers charge based on 95th% and ports scale based on highest burst not volume passed. I’ve always hated it.
Most of the big operators have peering agreements in place, but that doesn't mean every participant has infinite bandwidth. Google Global Cache and Netflix Open Appliance go a long way to reducing costs by avoiding interconnect where possible.
Storage, transcoding/encoding, and any other compute operations (rendering, etc) are small compared to data transfer costs.
At the scale of the largest streaming apps (Disney, Netflix, YouTube, etc) you are moving petabytes of data PER DAY. At that size, you have access to significant savings on CDNs, backbone providers, etc. in many cases the discounts will be 90% - I have seen as high as 99% - or higher off the “list” price (which are usually never paid by anyone anyway).
You also tend to own your own backbone and can link in whichever ISP wherever you want for the “final mile.”
Final note, when you have been doing this long enough, you can start shaping the traffic based off previous patterns. I remember an eBay listing years ago for a Netflix local storage device that was meant to store shows at an ISP’s data center.
Cloud hosting things like google or AWS that bill end users by the GB or TB are always significantly higher priced than the actual cost of bandwidth as an ISP.
This is simply untrue for bandwidth charges if you're pushing a lot of data.
A streaming video service, for example, might end up paying $0.10/user/hour. So a movie-a-night customer would cost $6. What multiple of reasonable do you think that is?
It doesn't cost them anything to transfer some amount of data, but it does cost them in the total amount of bandwidth they have left to sell to other customers.
At some level transfer quantity and rate are the same thing. A bit sent for customer A takes up space on the wire that can not be used for customer B, no matter how it's measured.
It's also unclear which line would be measured for purposes of Netflix's transfer rate. That's one of the beauties of the cloud... specific line transfer rates are abstracted away into an aggregate quantity of data.
If you're selling lines, you charge by rate. If you're selling transfer, you sell by bits.
It's quite common datacenter prices to incl. bandwidth and data.
Netflix/youtube cases it's the content providers that server the traffic, so most of it is generated by them. The client requests are tiny in comparison.
Is Netflix not paying Verizon for the bandwidth and data transfer?
If Netflix is not paying Verizon then why does my hosting provider charge me for bandwidth and data transfer?
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