> Because just giving everybody a connection which is twice as fast doesn't mean everybody is going to immediately double their usage.
My understanding is that peak load is the issue, not total data transferred in a month. If Netflix downloads/buffers video content as fast as it can, and people mostly use Netflix at the same time of day, then giving them more bandwidth is a potentially big problem
Peak load is what you have to design capacity for, but that is hardly unique to Netflix. They seem to have it sorted for FiOS/U-verse/etc, don't they?
The argument they might make is that their services keep the data closer to the users, but that's such a cop out. They could do the same thing for Netflix with transparent proxies if they wanted to (but the result would be to make Netflix more usable instead of less, which is adverse to their interests as competitors). And in any event the uplink to a large peer is a totally inconsequential part of the cost of operating a network. The thing which is expensive is upgrading the last mile to handle a large amount of video traffic, but that cost is the same whether the traffic is Netflix or FiOS TV.
In the UK, I believe the main practice revolves around broadband, whereas in US it's all around phone (VoIP or otherwise). If you could enable competition within the same last mile service, you'd a)give a definite incentive to make sure the entire network delivers the best experience and b)have alternate sources of revenue to maintain the last mile network.
The current duopoly that exists SoCal in most areas (1 cable provider and 1 DSL provider) is a really terrible consumer experience. For those who have access to FiOS, it's a tad better, but not by much.
If you had access to 10 providers at once with comparable services, there would be real incentive for them to offer the best possible experience and lowest possible prices to consumers... but of course that would hurt corporate profits and so on and no politician getting those donations wants that...
What we really need is the equivalent of Glass-Steagall for internet services. Prohibit the company that operates the last mile from owning or being owned by anybody that offers end-to-end connectivity or over the top services to end users.
The problem with just local loop unbundling is that the last mile provider has the incentive to favor their own services. They can operate their own ISP division at a loss or with zero margins (more than made up for by profits in the last mile division) which disadvantages competitors who have to lease the last mile and thereby maintains the status quo of no competition.
My understanding is that peak load is the issue, not total data transferred in a month. If Netflix downloads/buffers video content as fast as it can, and people mostly use Netflix at the same time of day, then giving them more bandwidth is a potentially big problem