Netflix, which streams nearly 1 billion hours of video monthly over the Internet, is shifting to deliver data directly to broadband service providers via its own content delivery network at no cost to ISPs.
Today the company delivers most of its video through commercial CDN providers, including Level 3 Communications. Moving forward, Netflix will connect to Internet service providers through its own Open Connect CDN, which will provide streaming video at no cost at locations selected by ISPs or through common Internet peering exchanges, vice president of content delivery Ken Florance wrote in a blog post Monday.
Google's YouTube, the largest video service on the Internet, has long operated its own CDN, Florance noted. "Given our size and growth, it now makes economic sense for Netflix to have one as well," he said.
About 5% of Netflix data is already being served by Open Connect, according to Florance. Netflix will continue to work with its commercial CDN partners for the next few years, Florance added, "but eventually most of our data will be served by Open Connect."
In late 2010, the cost of delivering Netflix's video over the Internet flared into a political issue.
Level 3, which two years ago won contract from Netflix to be a primary CDN provider, accused Comcast of violating the FCC's network neutrality principles because the MSO was charging interconnection fees. Comcast responded that Level 3 was trying to avoid paying standard CDN fees under the guise of a settlement-free peering arrangement, even after Level 3 began pumping a disproportionately greater amount of data onto the MSO's networks.
Netflix's streaming-video traffic in North America represents 33% of all peak-hour downstream bandwidth over wireline broadband networks, according to study released in April by Sandvine, a provider of bandwidth-management equipment.
Under the Open Connect program, Netflix is offering settlement-free peering connections in seven U.S. cities: New York (Equinix Internet Exchange, Telx Internet Exchange and NYIIX); Los Angeles (Any2 Internet Exchange); Chicago (Equinix); Ashburn, Va. (Equinix); Atlanta (Telx); Miami (NAP Of The Americas); and San Jose, Calif. (Equinix). Netflix also has a presence in London's LINX and LONAP exchanges.
Netflix developed a hardware design for a PC-based server that can accommodate 100 Terabytes of storage into a 4-rack-unit chassis that is less than two feet deep. The Open Connect Appliance, which also includes 10 Gbps optical network interface, runs on the FreeBSD operating system.
The company has published more info on the Open Connect initiative at: http://openconnect.netflix.com.