Which Analogy for ISP Interconnection: Retransmission or Carrier Interconnection?

Netflix and major U.S. ISPs use different metaphors to describe the process of interconnecting Internet domains.



Verizon, AT&T and Comcast, for example, use the analogy of carrier interconnection, where the amount of traffic exchanged determines whether any particular bilateral interconnection is settlement free (roughly equal amounts of traffic exchanged) or requires payment by the network delivering much more traffic than that network is accepting.



Netflix uses a different analogy, that of broadcast TV "retransmission fees," the fees paid by video subscription services to TV broadcasters for the rights to retransmit off-air signals as part of a video subscription.



Whatever one thinks of the reasonablenes of those analogies, there now is a huge traffic imbalance between "eyeball networks" that terminate Internet traffic for consumers, and "content networks" that deliver traffic to eyeball networks, but accept only modest traffic from the eyeball networks back to the content networks.



The reason is simple enough: content networks send video and other content to end users, but generally do not need to accept much upstream traffic from consumers, whose operations are generally confined to ordering a movie to watch or updating a play list.