Good God this is dumb…

Netflix's current pricing model allows unlimited downloads for $7.99 per month. Netflix saves, with every download, approximately 40 cents that would otherwise be paid to the U.S. Postal Service. If the average customer downloads 10 movies and TV shows a month, Netflix will save $4 a month for each of its 23 million customers.

Obviously these massive transmissions over the Internet are not really free. Someone is paying for them. That "someone" is the millions of broadband subscribers, whether or not they are Netflix customers.

How is that fair?

…

The reality is that Netflix and similar services want a free ride on the networks built with more than $250 billion in design, engineering, manufacturing, construction and maintenance -- a system that now provides broadband services to 95 percent of American households.

Let me establish a few things first…

1.  What the authors think is fair doesn’t really matter to me.  In fact I’d wager it matters very little to anyone. 

2.  What matters is the agreement I have with my ISP.  I trust my ISP has made a deal with me that allows them to make a profit.  If they haven’t that’s their own fault. 

Having said that I pay Verizon for a 25 Mbps (bits not bytes) connection.  That means I’m entitled to run 3.1 Megabytes over that connection per second.  A quick look in my iTunes folder tells me an hour of HD content is about 2 Gigabytes.  So if I’m streaming that content I am, on average, consuming 555 Kilobytes per second. 

As a Netflix user I’m consuming 4.4 Mbps (bits not bytes) of a 25 Mbps connection (or around 18% of my capacity).  Also note I’m not streaming video or even using the Internet 24 hours a day.  U.S. Households average about 5 hours of TV per day.  If I were to watch 5 hours per day on Netflix my average bandwidth consumption would be 10 Gigabytes where as the capacity I’d be entitled to would be 267 Gigabytes (Meaning I use 3.7% of the capacity I’m entitled to)

So how exactly am I costing other Internet users for my massive transmissions? 

More to the point people who get very cheap connections (Verizon offers 1 Mbps for $24 a month) are bandwidth locked so they CAN’T stream HD Video.  So anyone streaming HD video is more than pulling their weight. 

Netflix isn’t getting “a free ride on the networks built with more than $250 billion”.  I am in fact paying their fare and the fare of 3 other people about their same size. 

(For the record the authors work for an organization which is backed by the Cable companies and this is a pretty obvious attempt to justify throttling other video services in favor of those services the cable companies provide)