The explanation by Verizon about the recent dispute between Netflix and Verizon highlights the problems of inadequate ownership rights [2, 3, 4] and lack of commonly accepted sustainable practices with internet. Another unrelated factor that is making things even more complicated is that internet was not designed to carry video streams.
There are historical precedents for the conflicts we are witnessing with internet — “Tragedy of the Commons” [2, 3, 4, 5, 6, 7, 8, 9, 10]. In medieval England and Europe there was a practice of sharing a common parcel of land as grazing grounds for cattle. Herdsmen will bring their cattle to the common grass fields. The tragedy is that benefits of bringing an additional cattle belong solely to the herdsman, but the problems of over grazing are shared by all.
The ownership issues related to internet are complex. The Internet Transit Map provides a logical overview of the internet. The connections marked Cloud Access (4) and LAN Switching (7) are the areas of this conflict. The logical structure of the conflicting area is shown in Internet Commons Architecture (below).
The conflict arises due to the multiplicity of ownership, and lack of commonly accepted sustainable practices.
Unlike the medieval grasslands, different parts of internet commons are owned by different parties. The Internet Commons Architecture is one instance of a simplified logical representation of connections in a data center that is shared.
This is how the ownership in a Commons Data Center may be distributed. The Data Center (1) building and land is owned by an internet landlord. The high speed communication lines (2) and the Transmission Switch (3) are owned by Internet Service Providers, who provide connectivity for that facility. The ownership of the Cabinets (5) belong to different Data Center Operators. Within the Cabinets (5), there are Servers (8), LAN/SAN Switches (7), and Distribution Switches (6). In addition, there is cabling connecting these communication systems and servers. The cabinets and the systems within the cabinet may be owned by the same company. Or, the space within a cabinet may be leased out to several companies, who in-turn own the systems within the cabinet.
“Cloud Services” or Software as a Service (SaaS) [2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15] (10) is another innovation in the Data Center. Without having any type of ownership of anything in the Data Center, SaaS allows running software on the servers only when needed, and paying only for the usage.
The companies leasing space in cabinets may use their own cables for connections or the Data Center operator may provide some of the cables. And “Cloud companies” do not own anything in the Data Center, but use the services of “Cloud Providers,” and generate internet traffic.
In the case of the Netflix-Verizon conflict, the communication lines (2) and Transmission Switches (3) were installed by Verizon. Netflix was using “Cloud Services” (10) provided by Amazon.
About the economics – Adding servers (8), LAN Switches (7) and related cables (9) are relatively inexpensive, compared to the Transmission lines (2), Transmission Switches (3), Distribution Switches (6), and associated cabling (2, 4).
As time went on Netflix usage of “cloud services” increased, even though they had no ownership of the systems in the Data Center. The resulting increase in internet traffic made it necessary to upgrade the Data Center (1) infrastructure facilities that include Transmission lines (2), Transmission Switch (3), Distribution Switch (6), and associated cabling (4). The dispute is who should pay for the upgrade.
The Netflix-Verizon dispute illustrates the need for better clarity on ownership rights, responsibilities and usage rights at various transit points on the Internet — since competing commercial interests are involved.
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