‘House of Cards’ deals: Netflix, Comcast, Verizon make nice?

Kevin Spacey stars in Netflix' popular 'House of Cards' (Netflix promo image)

WASHINGTON, February 24, 2014 – Having recently kicked up the bandwidth on his Verizon FiOS service—in large part to improve the iffy quality of Netflix streaming video—the Prudent Man has found himself increasingly disgusted with the crappy (a technical term), pixelated, constantly re-buffering results which have been deteriorating since at least last fall. The new equation here seems to be more money = crummier service. Structurally and experientially, it’s almost like we’re dealing with, well, some kind of ‘house of cards’ here.

Over the past few weeks, however, the Prudent Man has found that he’s not been alone in his absolute disgust with the escalating costs and deteriorating service that have become the hallmark of the monopoly extortion racket known generically as broadband video service. Millions of users, including the vast customer base of Comcast, have been paying top dollar to Comcast (aka Xfinity), Verizon and Netflix for the same low quality garbage video output which at times looks and feels like primitive 1990s-style GIF animations.

After doing quite a bit of research on the issue before starting to file a litany of complaints with Netflix and Verizon, the Prudent Man gradually learned what the problem was, at least for most Netflix users. And for that matter, for the legions of concurrently infuriated Comcast and Verizon customers, all of whom long ago learned they’ll be fleeced early and often for the kind of “premium” TV audio-video reception they used to grab from their rabbit ears antennae for free.

The problem: Moolah. Money. It’s as simple as that. Who knew?

The tech weenies in the audience have probably figured out that all this has to do with non-layman-friendly things like peering, third party networks and services, links, connections, and so forth. To grossly oversimplify, with regard to streaming content, you get the highest quality video service from Verizon when given providers link directly to Verizon’s pipes. But that could cost you, which matters to companies like Netflix that want to maximize their own profitability.

Instead of connecting directly to Verizon’s pipes, Netflix streaming content has generally been moving from its servers through the broadband pipes of virtual middlemen like Cogent Communications (CCOI) which, BTW, is headquartered right here in Washington, D.C. Cogent, then, feeds the Netflix streaming video into Verizon’s pipes. What could be simpler?

But wait…it hasn’t exactly been working that way. Verizon doesn’t much like Cogent and likes Netflix even less, figuring this pair of interlopers simply wants to filch, for free, all the considerable fiber bandwidth Verizon has built out in recent years. So Verizon has been keeping only about one pipe (connection) open for the Netflix to Cogent to Verizon streaming content tsunami, estimated to consume anywhere between 50 and 70 percent of all bandwidth particularly during prime time.

The result—essentially the same for Comcast customers—has been worse and worse streaming quality and more and more interruptions for beleaguered Netflix customers who increasingly are finding that choosing their own video programming is a much more enjoyable pastime than surfing through the endless crap (that word again) that the likes of Comcast and Verizon grossly overcharge their customers for.

Over the past week or so, however, the new season of Netflix’ popular original political series, “House of Cards”—starring Kevin Spacey as a not-so-lovable and actually typical Washington pol—caused a humongous and continuous data dump into those broadband pipes. Netflix, as it has done before, made the entire new “House of Cards” season available all at once, enabling marathon binge-viewing by the show’s rabid fans.

That’s right, 24/7 continuous streaming downloads, one after the other, of the new “House of Cards” episodes. That really broke the camels back, as any Comcast, Verizon, or Netflix customer only knows too well. Many, perhaps most marathon viewers, as well as everyone else, also experienced a buffering and rebuffering marathon as the Netflix service continually slowed its data stream to match the few pipes available for the onslaught.

The results: constant interruption for re-buffering along with that bloody red “progress” band in the middle of the screen; and, of course, crummy, frequently square-pixellating video streams whose quality was generally worse than the fuzzy garbage you’d get on UHF channels back in the 1960s.

The Johnny-Come-Lately newspapers and financial media finally got on the story last week, particularly the Wall Street Journal. (You wouldn’t have expected CNBC to cover the story since the network’s parent company, Comcast, has been one of the villains here.) With the story moving to the front pages, it was time for the adversaries to get serious. Netflix has just inked a pact with Comcast that will give the streaming service direct access to many more Comcast pipes (connections). For a price, of course, which you can bet Comcast and/or Netflix customers will eventually have to pay more for.

Word this afternoon is that Netflix and its even more determined antagonist, Verizon, are talking nice right now and that a deal is imminent.

BTW, we should mention at this juncture that we don’t regard Netflix as an innocent victim here either. They have their own system of pipes they’d prefer that the broadband providers link to directly, for a consideration of course. Their “negotiating” tactic has been to use cheaper middlemen like Cogent or Level 3 Communications (LVLT) to carry their content close to the customer before dumping it all into the service provider’s limited number of pipes, thus increasing their own take.

Effectively, none of these people, in an ideal world, would have to pay their competitors for anything. But of course, they’d all continue to overcharge all of us for ever-worsening service. It’s become a sick joke.

Several things bug us about this wholly predictable current mess. First of all, unclear court rulings, pathologically obtuse and downright stupid Congressional committees as well as a clueless, inept, and ineffective FCC absolutely refuse to clarify what exactly is in the public good when it comes to telecommunications rules and regulations.

Consequently, the action out there in provider and ISP land is like one Wild West shoot-‘em-up battle after the other as the players in this game scramble to screw their competitors and milk their own customers for every last dollar they can extort. It’s a classic example of the way the political class and the 1% elites are screwing every single American who wasn’t a member of the Skull & Bones back in those college days of yesteryear.

Paying for crappy service is one thing. But when you have no choice other than to overpay for crappy service from one provider or the other because state and local governments have allowed broadband monopolies to predominate because they can grab lucrative fees for monopolistic “franchises,” something is really wrong here.

The general result, in some way, shape, or form, are periodic battles between broadband providers and content providers that are waged via battles during which various content providers (like sports channels) are terminated by a carrier until those providers pay up; or, as in the case of Netflix, where connections aren’t made available causing the quality of the content providers’ contents to deteriorate.

Meanwhile, of course, all the customers of all the services are expected to keep paying those over-inflated bills for under-inflated services or those customers themselves will promptly get cut off. Where’s the justice here? Right, there isn’t any, as all these players take their cue from a dysfunctional Washington which raises our taxes via subterfuge while giving us less and less for our tax dollar.

Yeah, this is a rant. But it’s probably one you’ve already had in your house already. Someday, somehow, we as a nation are going to have to take control of our lives back from the clowns we’ve allowed to run the government, the services, and the systems we’ve grown to depend on. Otherwise, we’ll continue to pay more and more and more for less and less and less. It doesn’t make a particle of sense. But as long as people react timidly to the kind of nonsense we’ve outlined here it’s not only going to continue. It’s going to escalate.

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