May 19, 2011, 6:02 PM — A report issued Tuesday showing Netflix makes up a third of total Internet traffic is inaccurate enough – or at least the reports about it are inaccurate enough – to show not very many people in either the press or vendor marketing understand the network they base their business on.
There are two important points here, both relevant to people who do IT for a living, not just those who either dislike data caps or do like Netflix:
First, the report didn't say Netflix eats a third of the whole Internet; that assumption was off base enough to prompt Forbes to run a piece trying to correct it, but not quite succeeding.
Sandvine – an Ontario-based networking vendor – issued a report Tuesday estimating that streaming media from Netflix make up 30 percent of downstream traffic during peak times.
What Sandvine meant was that Netflix traffic spiked heavily during prime time – when most people are home and watching something other than what's on TV – but only across the last mile.
TechCrunch posted some graphics showing what's travelling across the nation's networks during peak times, and in what volumes. Netflix comes out on top, but only with the caveats below.
Netflix uses content-distribution services to make sure its content is located close to customers, so when you click Play the file you see is being downloaded from somewhere nearby, not from Netflix' central database.
The portion of the network Netflix hogs is only the ISP's edge connections – from a distribution hub to the house of Netflix' subscribers.
The heaviest traffic is in spikes during one part of the day, which is irrelevant from a network-infrastructure standpoint. Even if the spike is only an hour, the network segment through which the spike passes still has to have enough capacity to handle it.
For the ISPs that is the good news, though they already know this and simply leave the good news out when complaining they must be allowed to throttle Netflix to avoid having their networks swamped.
Netflix doesn't swamp the ISPs' backbones or even their high-volume network spokes because its content is distributed and cached ahead of time. When it launches it travels only across the edge, vastly reducing the logic behind arguments by AT&T, Comcast and Verizon that they have to keep adding to their core networks to keep up with bandwidth-sucking competition from Netflix.
The second point that's relevant for working geeks is that the level and reasoning behind data caps from AT&T and other ISPs vastly understimates what a "normal" level of Internet use really is.
That affects consumer accounts most directly, but ripples out to business ISP accounts as well, in both data caps and data-consumption or bandwidth rates.
When AT&T announced its data caps – 150GB per month for DSL users and 250GB for broadband – it called the data levels "generous" and said limits would only affect 2 percent of its customers.
It turns out Netflix users take up an average of 40GB per month just from streaming media, according to a different Sandvine report (PDF),
Users that stream data through a device other than a PC – an Xbox or other game console, for example – use twice that amount of bandwidth for the same content.
That puts DSL users who stream movies through their Xbox 360s two-thirds of the way to their data cap every month before they download a single app or send a single email.
It also doesn't include downloading YouTube videos or games, even the demos of which can rush anyone toward the data-cap limit without realizing it.
The Nazi zombies map for Call of Duty alone is 1.4GB.
Download the demo for Office 2010 Professional and you're on the hook for another 688MB.
It eats up the bandwidth quickly, but your ISP will be there to make sure you don't go over, or that you pay $10 for every 50GB you go over the limit every month.
That's the cost of allowing the FCC to avoid limiting the price-gouging plans ISPs impose on consumers and small businesses, rather than see through the smoke and realize it's not compensating for Netflix that is taking up most of the carriers' R&D and network-upgrade work.
It's the effort to upgrade the nets to support their own streaming-media services, which not only compete with Netflix, but also come supported by internal business cases that have to show how quickly each new major upgrade will pay for itself through new services or the ability to support more subscribers.
Upgrades justified to regulators by saying Netflix is about to bring down the Internet go into the books under the category Gravy, and slide straight down to Net Profit at the bottom of the page.
