Originally Posted by Brian Conrad
I think it would be more likely that Netflix just can't keep up with the demand. I've seen that mentioned on other forums and in articles. And if they also only see this say during school vacations they may not feel it worth build out to expand coverage or the schedule for built out is still a little behind demand. And investing in more build out might be disastrous when there seems to be more competition coming online.
I would agree that it is likely, or at least not unlikely. But it would be no surprise if some Netflix performance issues are due to limited last mile bandwidth or a bottleneck between the ISP and the network on which the CDN resides.
As for other forums and articles speculating on the cause, I have never seen anyone do a deeper analysis than the speculation in this thread. Most never get past the simplified perspective of what matters in the end to most users. What matters in the end is if it is possible to watch netflix without quality degradation or other streaming problems. From that simplified perspective, sure, if netflix streaming is having problems, netflix is overloaded.
If anyone knows of actual research or analysis on this topic, please call it to our attention. I for one am quite interested.
A more technical analysis would attempt to determine where the bottleneck is. If it is the peer connection between ISPs, then generally the cost of increasing bandwidth is split between the entities at each end. Note that at least Comcast has been playing hard ball and is refusing to pay for their end of the connection. This is for obvious reasons. If Comcast can make it such that netflix streams poorly during peak usage periods, they succeed in harming products (such as netflix) that compete with their cable television services.
In regard to investing in increased streaming capacity... As I understand it, Netflix doesn't own the network or servers that host their service. I think this is currently contracted out to Level3. That raises the question of how that contract is structured. L3 may simply be providing a fixed total bandwidth. Or they may be required to upgrade as merited by congestion.