Amazon's game-streamer Twitch to quit South Korea, citing savage network costs Amazon’s game-streaming business Twitch has announced it will quit South Korea, citing network access costs ten times higher than those it pays in any other nation. Twitch lets gamers stream their play in real time, with some streamers winning audiences in the millions and monetizing their channels. eSports teams and players …
I wonder how happy SK Broadband is with this?
- less traffic, less traffic cost, so ... great
- less income, but some other paying content party will take the place
- less income, "hmmm, that was not our goal!! That is so nasty of Twitch!"
- Twitch watchers need less bandwidth, get a cheaper plan, so less income for SK Broadband
- ...
Well, manglement at SK Broadband could return to the negotiating table, but if that happens, they will be no longer be in a position to mandate 10x carrier prices.
And they will lose face which, contrary to our Western civilization politicians, is anathema to many Asian cultures (painting Asian in broad strokes, here).
So I feel confident that SK Broadband is going to watch Twitch leave without flinching. I do wonder, though : how much does it actually cost to transmit a megabyte over fiber ? I mean, the router is plugged in whether or not you're transmitting. How much more energy does it take ? I realize that it should take more, but how much more ?
" ... the router is plugged in whether or not you're transmitting"
True, but someone created/maintains/expands (costing $$$) the network that the router is 'plugged' into and to a degree I can understand that they are watching the 'usual suspects' make huge profits from huge amounts of traffic which they are not being paid much for (by their estimation) !!!
:)
True, but someone created/maintains/expands (costing $$$) the network that the router is 'plugged' into and to a degree I can understand that they are watching the 'usual suspects' make huge profits from huge amounts of traffic which they are not being paid much for (by their estimation) !!!
Yes, well, that's big content for you. They'll charge their content creators 30% or more of any tips etc, plus the billions they make from inserting inappropriate ads at inappropriate points, or just randomly demonetising content creators and pocketing all the money. But of course big revenues aren't really translating into big profits, hence big content doesn't want to pay delivery costs.
But it's not really the ongoing costs that are the problem for ISPs, it's all the incremental costs that traffic creates. So back in the day, the Internet could be accessed at 1200/75bps, then it went to kbps, Mbps, Gbps.. with huge upgrade costs along the way. Content has driven that, but not really been paying for it.
If they are like pretty much every broadband provider, then its income is a fixed monthly fee that does not take into account traffic volume beyond a “fair usage” cap. On the other hand, its expenses are very much dependent on traffic volumes.
Nobody will cancel their broadband because Twitch is gone, so I think they’re happy with the arrangement, and any future streaming entrant will know that it really is the ISP’s way or the highway, so overall they’re winning.
My personal view on this is that the large corporate traffic generators do not pay their fair share for carriage, but that what the ISPs are looking for is also not a fair reflection of cost versus value - the right solution is somewhere between, but that would require big tech companies to actually pay their fixed operating costs themselves, something that their business models are designed to avoid. There’s a lot of “net neutrality” bros out there who are very vocally against the idea of charging different rates to different customers, but it’s funny that when you actually look into who’d be charged more in such a regime, it’s not the FOSS distributors or the journalists, but the big tech media companies… astroturfing is alive and well.
here’s a lot of “net neutrality” bros out there who are very vocally against the idea of charging different rates to different customers, but it’s funny that when you actually look into who’d be charged more in such a regime, it’s not the FOSS distributors or the journalists, but the big tech media companies… astroturfing is alive and well.
There is a very important principle here... the telcos cannot be allowed to charge different types of customers different rates. Telecoms is a utility, a public good. The electricity company doesn't get to charge different prices depending on how rich you are, and the highway operators don't get to charge based on the value of the content of the lorry - nor should the telcos. That model is called "taxation". It might be reasonable if the utility is a government enterprise, but privately owned utilities need to be limited by tight regulation to avoid this sort of price gouging taking money out of the economy (by mainly foreign investors).
There is a very important principle here... the telcos cannot be allowed to charge different types of customers different rates. Telecoms is a utility, a public good. The electricity company doesn't get to charge different prices depending on how rich you are, and the highway operators don't get to charge based on the value of the content of the lorry - nor should the telcos.
Other utilities do differentially charge. Want a 3-phase feed? You'll pay extra. Want bigger water pipes as well to fill your swimming pool? You'll pay extra. Pretty much every utility already charges different customers different rates based on demand & usage. Telecomms has alreay been doing the same for well over 100 years with the voice settlement systems based on originating and termination costs.
The Internet isn't really any diferent. You might get settlement free peering, if there's mutual benefit in the traffic exchanged. If the traffic volumes and costs are heavily imbalanced, you might have to pay. There's also an element of blackmail because if an ISP doesn't peer with a content provider, they may have to pay transit fees to reach that content. This is an age-old Internet issue back to the good'ol days when the Internet was more US-centric. So non-US ISPs would have to buy transatlantic and transpacific capacity to reach US content, essentially subsidising the US traffic.
Again this was solved* with voice settlement and regulatory models, which should also consider potential market power issues. So Amazon's rich enough to have it's own datacentres in Singapore, so can send a stream to it's DC, then replicate to Singapore users from there saving. Singapore ISPs of course have to pay the costs to deliver that stream to however many eyeballs they have. Basic regulatory model should be reflective of those costs, ie the incremental cost of delivering Twitch or any other content. This is normal for telco interconnect agreements, although content providers don't like it due to the cost imbalance. A 100Gbps port in a DC is a lot cheaper than distributing that 100Gbps of traffic around Singapore, or any broadband ISP.
This isn't really different to any other utility, it's just the content (and transit) providers have invested a lot of lobbying dollars in special pleading to claim they shouldn't pay any of those distribution costs, even though they're the ones imposing those costs. Usual issue arises that if content providers won't or don't pay, then the subscribers will have to. Then there's the good'ol QoS issue, which should be permitted but based on technical need, ie prioritising time-sensitive traffic during congestion.
*solved in the normal telco way, ie lots of refiling and shenanigans to try and avoid those settlement charges.
It’s not about how rich you are - that’s exactly how the likes of Netflix are framing this argument. It’s about how much of the utility you use, and the way that you use it.
To cite your two examples: the electricity companies do charge you more if you consume a lot of electricity, or use it in such a way that it places higher demand on the infrastructure - even the exact same power consumption can attract different rates depending on the type of load you’re placing on the grid. Similarly, freight vehicles pay higher taxes and road-tolls because they consume more of the road (both in terms of physical space and weight-loading). You pay for the resources that you use; what profit you make from using those resources is nobody’s business except yours.
The principle of Net Neutrality says only that one individual customer cannot be favoured over another (so, for example, Disney can’t slip a few million to your ISP to prioritise its streams over those of Netflix or Amazon), but that doesn’t mean that ISPs cannot favour one class of customers over another. Some types of traffic place higher demand on network infrastructure, and high-bandwidth streaming is one of the most demanding. Twitch is actually worse than the movie streamers, as its content is generally live, which rules out the use of an edge CDN with cached content. However, the companies that profit from these streams usually want to pay only a data-centre peering fee, which does not accurately reflect the costs of ensuring that traffic arrives at the customer premises.
The content streamer’s view of “fair” is like Steinway driving a customer’s new piano to the local postal sorting office and saying “Here you go: Get that to Apartment 6, 113 Main Street, thanks. Oh, and we’re only paying you five bucks, considering we’ve brought it most of the way for you.”.
The content streamer’s view of “fair” is like Steinway driving a customer’s new piano to the local postal sorting office and saying “Here you go: Get that to Apartment 6, 113 Main Street, thanks. Oh, and we’re only paying you five bucks, considering we’ve brought it most of the way for you.”.
Note that in this case the "post office" has entered a contract with the owner of Apartment 6, 133 Main Street, stating that they will deliver whatever is requested at no extra cost. ISP have customers, and these customers already pay for the traffic. In South Korea, that probably means they pay for optic fiber, which has no problem handling the load.
Note that in this case the "post office" has entered a contract with the owner of Apartment 6, 133 Main Street, stating that they will deliver whatever is requested at no extra cost. ISP have customers, and these customers already pay for the traffic.
Not really. The post is a series of contracts, so you'll be charged a different amount to deliver an airweight letter vs a grand piano. Amazon might get upset if you dropped off a piano at one of their distribution centres and expected free delivery because the recipient is a Prime customer. Problem is there are multiple contracts, so user-ISP that is a generic basket of 'Internet', and user-Twitch where the ISP isn't part of any realy contract to deliver the service Twitch promises the user. It gets better with paid content like Netflix where there are 2 contracts, but payment isn't shared.
Yes, the postal service has not promised to deliver any package for the same price. The ISP, in most residential cases, has done exactly that by deciding to charge one price for however many packets I choose to receive or send. If they don't want to do that, they are free to charge me by how much traffic I use, like they do for many commercial customers, or even introduce a complex setup for different destinations. They don't do that because they know that, if there are multiple options, customers will not choose the one where they need to do a lot of calculations to estimate what their bill will be and if there is not another option, doing anything too egregious is likely to result in regulatory complaints. It is not my fault that their business model doesn't let them charge people who use more, and it is not my responsibility to compensate them for that reality. If they don't like that, they are free to think up an alternative or to find a manager who understands the market they're in.
They don't do that because they know that, if there are multiple options, customers will not choose the one where they need to do a lot of calculations to estimate what their bill will be and if there is not another option, doing anything too egregious is likely to result in regulatory complaints.
.. Which is 'Net Neutrality in a nutshell. The regualtory complaints came in early and resulted in a variety of regulations to 'preserve' 'Net Neutrality, rather than introducting any cost-based settlement or interconnect regulations. It's also somewhat ironic that mobile kind of relies on user uncertainty or ignorance to generate lots of money in overage charges. There's also lots of lobbying and political pressure to keep broadband costs down given it's utility.
It is not my fault that their business model doesn't let them charge people who use more, and it is not my responsibility to compensate them for that reality
The reality is you will end up compensating them for the reality that if the only person who can be charged for the cost of upgrading and maintaining networks is you, the broadband subscriber, then your price will go up. Alternatives like going back to the days of RADIUS accounting to measure usage and charge for overage also don't really work because of the cost of collecting traffic data, producing bills and handing complaints & disputes are generally a PITA. Most consumer contracts still have the option to ToS users though for 'excessive usage'.
Again it's really simple, either content providers pay some of the costs, or all those costs will fall on the subscribers.
"The regualtory complaints came in early and resulted in a variety of regulations to 'preserve' 'Net Neutrality, rather than introducting any cost-based settlement or interconnect regulations."
Leaving the ISPs free to figure out how they'll implement the service rather than mandating that sounds fine to me. There is a reason for the regulatory complaints, namely the monopoly positions of many ISPs. People do not like being charged unreasonably by companies in such positions, especially when they have often received massive amounts of government funding, so they regulate them from the start to prevent them from causing harm. It's going to happen, so it is in the ISPs' interest to try not to anger the customers badly enough that the regulations become more extreme. If the regulators want to mandate even more, it is in their power based on the ISPs' use of public funds and market competition law.
"It's also somewhat ironic that mobile kind of relies on user uncertainty or ignorance to generate lots of money in overage charges."
Yes, many do, including mine. However, mobile companies have realized that people don't like that, meaning that most providers I know have an unlimited package available at some price and it's covering more and more customers who don't want to get overage charges. There is also a very big difference between charging me based on how much data I used altogether, something I can track and manage, and charging me and various others based on individual flows that I couldn't predict. Users would hate both, but they would hate the latter much more.
"Again it's really simple, either content providers pay some of the costs, or all those costs will fall on the subscribers."
And the solution should be simple: each party pays for their connection to the internet, as both the individual consumer and the large service provider do, and the ISPs figure out how much they need to charge to deliver the promised service. If they need more, they charge more. If there are competitors, charging more might deliver some business to a competitor who has not. Having ISPs charge both ends breaks this model and, as we all know, there's no way that my ISP will charge me less even if they manage to get the servers I connect to to pay as well.
Last time I checked, electricity companies charged me for access to electricity, and charged me for how much I used and charged me at different rates for when I used it. It also charges different rates to the small business next door and the large factory down the road so there is nothing new or original in customer based charging. The toll road doesn't charge based on the contents of the truck but they do charge based on the size and weight of the truck and sometimes on when the truck wants to travel. Telcos are not suggesting charging for the contents of your downloads (cat videos are the same price as pussy videos) but they would like a share based on the size of the download. Why should they have to bare the total cost of upgrading to 1Gig+ fibre to the door just so you can watch an 8K UHD grumble flick? Does it really look much better then 720i?
I have obviously not been clear. This reply (and most of those above it) have missed the point I was making.
Sure, the electricity company charges different rates for different services - depending on how much you use, how reliable you want it, what technology you want it delivered using (3-phase, etc), how much compensation you want in case of problems, etc, etc. But they don't charge you different amounts based on what you do with the electricity. They charge you the same whether you use it for keeping warm in the winter, or mining bitcoin.
Similarly, the roads operators charge differently for different types of vehicle, weights, etc (and could, for example, charge for the right to drive at a higher speed). But they don't get to ask the value of what you are carrying, or the value of the deal you are driving to sign.
Telcos are welcome to charge differently for different speeds, different QoS, different times of day, diverse routing, etc. But they don't get to charge differently for different combinations of bits sent down the line.
Telcos are welcome to charge differently for different speeds, different QoS, different times of day, diverse routing, etc. But they don't get to charge differently for different combinations of bits sent down the line.
Motoring analogies rarely work for the Internet, but I think you're also missing the point. So I'm Amazon, or an onshore wind farm. I decide to plonk a big distribution centre or windfarm in a field somewhere. My trucks pay road tax and fuel duty, so it's all good. Except as part of the development, I may be expected to fund road upgrades or improvements to deal with any increased traffic. Same also applies to housing developments.
So there are many examples where the generators of traffic are charged for infrastructure improvements needed to deal with the traffic they generate. It'd also be part of the costs of hooking up a new datacentre's power infrastructure. The Internet is really an exception where the traffic generators don't, and really don't want to contribute towards the cost of distributing the traffic they generate. Again it's a fairly simple choice. If there is no contribution, infrastructure doesn't get upgraded, or the end users get charged more. Solution is again simple, namely a fair, regulated interconnect model that's been successful for well over 100yrs. Well, until VoIP came along and broke that one as well..
Considering Koreans will still be able to access Twitch via a VPN, its bandwidth costs will not simply disappear. Not all users are savvy enough to do so, but those that really want to will still watch the streams, except the telco will no longer be able to bill Twitch for it.
I've no idea about the situation in S.Korea, but in the UK, for most Openreach and VM connections (ie 85% of customers) their connection is asymmetric with much slower upstream. And what that means is that Twitch users make a disproportionate use of the shared upstream bandwidth compared to most other users, even though at typical settings Twitch is using "only" 3 Mbps for 720p/30 FPS.
And what that means is that Twitch users make a disproportionate use of the shared upstream bandwidth compared to most other users, even though at typical settings Twitch is using "only" 3 Mbps for 720p/30 FPS.
Not really, unless you're a streamer. Most Internet usage is very asymmetric anway, with a small upstream request followed by a big glob of downstream data in response. The Internet is inefficient like that given pretty much all the infrastructure is symmetric, ie a 100Gbps wavelength or port is 100Gbps in both directions, but one direction is almost always underutilised. Problem is it's the downstream direction that drives the cost, ie if there's congestion, you'll need ot add another 100Gbps, even though most of the time it'll be half empty.
There is some stuff you could try to do, ie splitting out up & downstream traffic and routing that seperately, but then asymmetric routing generally makes operations and troubleshooting more of a PITA. However, I did renew my BT broadband, and was curious when the sales person asked me if I was into streaming to push me towards a tariff with a higher upload speed. Default for FTTH or FTTC is usually 10Mbps upload, which should be enough to stream with. Or make Zoom calls. Also one of those fun 'cost saving' efforts by Twitch, ie trying to do peer-peer streams generally just breaks things because of the asymmetry.
Considering Twitch apparently had the largest market share of video game streaming in South Korea, it's got to be really bad for them to decide to leave the country. Though there's also the fact that Amazon did a bunch of layoffs, which also affected Twitch. It could be that they were told to improve profitability "or else", and they are complying as best they can, even though that seems rather short-sighted.
It is also interesting they didn't simply raise the fees for SK users to compensate for network costs - suggests they are on a very marginal business anyway.
Twitch can't really as they don't charge stream watchers. Sure, they try hard to monetise them by flogging subs or bombarding them with ads, but there's no scope for differential pricing as there might be for say, Netflix. I am kinda curious how Netflix 'solved' their dispute, but then again, SK TV and movie content is probably some of the best content on Netflix, so maybe more scope to get creative with the commericals.
Netflix have a much easier job of reducing bandwidth usage. They can (and do) deliver a box to ISPs that is basically Netflix in a can (https://openconnect.netflix.com/en/appliances/).
Now that ISP’s subscribers fetch their films from that box, which means the ISP isn’t using (as much)!bandwidth from a third-party, making it cheaper and faster! Netflix provides them for free because it helps them too so it’s win-win.
Twitch can’t do that. Their content is live, so they can’t can it in advance. So yes whilst they’re both streaming services they’re both very different.
Now that ISP’s subscribers fetch their films from that box, which means the ISP isn’t using (as much)!bandwidth from a third-party, making it cheaper and faster! Netflix provides them for free because it helps them too so it’s win-win.
It's not really a win-win. The ISP still has to pay to locate that box somewhere, and all they really do is take some traffic off the peering or transit connections. Most of the costs are still within the ISP's network in distributing it to the eyeballs all around that network. So incremental costs to upgrade links between broadband aggregation points and those boxes. I did suggest once that content providers standardise their services so generic CDN boxes could be installed in aggregation points. That's kind of the way it's done with ISPs using multicasting to deliver their own video services, but mcasting has it's own headaches/nightmares.
But that could avoid the situation where an ISP has to find space/heat/power for a Netflix box, a Disney box, Amazon, etc etc. Downside is although it'd be more efficient, it'd also mean ISPs might need to re-design their networks. Most broadband networks are basically Layer-2 VLAN aggregation as well, because switching is cheap, and routing is expensive. So one of the reasons why content providers trying P2P solutions won't be very effective.
Problem is there's still no real incentive for content providers to do things more efficiently. Charging them for the traffic they generate might be a way to focus minds on developing their services based around an RFC-CDN shared platform, otherwise be charged a regulated interconnect & settlement rate. While content gets a free ride, content providers can just make the costs of delivering content the ISP and their subscriber's problem.
I would think that measuring and charging per usage might be costly as well. And you will get complaints from people who think they were charged too much. And I don’t know how much the fact that I have a connection costs my ISP.
It’s quite conceivable that correctly charging for usage would cost more than just delivering what’s needed.
I don't mean charge by usage, in broadband the actual cost of shuttling the electrons about is probably negligible. (it's 2023, not 2003, traffic shaping and throttling technologies are well developed, so a congested network can still be managed).
I mean build a network, then as demand increases, increase the capacity.
Don't charge 'per usage', but just charge what it costs to build, run and maintain, plus some profit.
Maybe I'm missing something here...Or maybe others are...
The customer of SK Broadband is surely the end user who is paying them to be there ISP? So as long as the user is abiding by there agreement (fair usage, download/upload limits, etc.), then what right do SK Broadband to demand money from Twitch or any other service sending data through?
If SK Broadband are not making enough money to cover there costs, then they need to reprice their subs to their customers (i.e the End User). Or maybe if the effect is only caused by one segment of their customers, say the uploading streamersm then they need to adjust their contracts so that those people are paying more for the usage of the service...
Going after the content providers seems well... disingenuous. I guess they seem like an easy target as opposed to trying to raise prices for the End User, who will probably just move to another provider. But the fundamental principle is that if you're not making enough money to cover your costs, you need to raise your prices for your end user...
No you're not missing anything at all. You're spot on.
What we have here is an ISP being nostalgic about the days when there used to be caps on Internet usage, go over 100GB in a month included in your package for arguments sake and they charge you a bit more for the additional. Now they can't go against the grain and bring that type of charging back in because people would leave them in droves unless they all did it which would presumably be illegal manipulation of the market. So what's an ISP to do? Go in for the double dip and try to charge the content provider for daring to provide content their users want. It's a shameless money grab because someone can't run a business efficiently.
SK tend to hobble global/foreign tech to promote local tech. The top search engine there is Naver, not Google. This allows them to maintain greater control over the internet in SK in the Korean language. So if they want to stop a scandal from leaking, they can lean on local companies in ways they could not lean on Google. Other nations will follow this if they can.
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