Fed up with transit slow downs impacting streaming performance, Netflix last month struck a new interconnection deal with Comcast that effectively cut out the middle man and forged a direct connection with the nation's largest cable giant. Comcast, eager to have their attempted deal with Time Warner Cable approved by regulators, is rumored to have offered a deal that's at least as good as what Netflix was getting from Cogent.
While that's all well and good for the short term, Netflix pretty clearly feels that other ISPs, not feeling pressure to look their best during regulatory review, aren't going to be quite as hospitable in resolving ongoing
Netflix streaming performance problems on reasonable terms. In a
blog post, Netflix CEO Reed Hastings called for a "stronger form of net neutrality" that would cover peering and interconnection agreements:
quote:
Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service. The big ISPs can make these demands -- driving up costs and prices for everyone else -- because of their market position. For any given U.S. household, there is often only one or two choices for getting high-speed Internet* access and that’s unlikely to change.
Hastings is entirely ambiguous as to what kind of "stronger net neutrality" he'd like. Does he want ISPs classified as common carriers giving the FCC greater regulatory power? He doesn't specify.
What is clear is that Netflix has realized they've opened a potential Pandora's box courtesy of their deal with Comcast. What's also clear is like Level 3 and Cogent have recently, Netflix is accusing some ISPs of intentionally letting peering relationships with transit providers deteriorate in order to purge the Internet of payment-free peering and raise rates on anybody that wants to connect with an ISP's users:
quote:
Some big ISPs are extracting a toll because they can -- they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay. Though they have the scale and power to do this, they should realize it is in their long term interest to back strong net neutrality. While in the short term Netflix will in cases reluctantly pay large ISPs to ensure a high quality member experience, we will continue to fight for the Internet the world needs and deserves.
On the one hand, I think some of what Hastings is engaged in is simply hyperbolic posturing intended to get government help in business disputes. Netflix wants AT&T and Verizon to strike deals similar to what they signed with Comcast, but that's not going to happen without government intervention. Again, Comcast only signed a reasonable deal to begin with because they wanted to quickly eliminate any perception of network problems or contentious relationships with content companies by merger reviewers.
The problem? Netflix could choose not to pay, stick with any number of traditional core transit options, and publicize the data proving precisely what ISPs like AT&T and Verizon are doing. Why aren't they? Could Netflix also be sticking with Cogent's congested links in order to keep performance poor so that ISPs are forced to join Netflix's Open Connect content distribution network? Without seeing the raw data, nobody knows.
On the other hand, anybody familiar with the way a company like AT&T does business knows they're happy to abuse their gatekeeper power to "creatively" raise prices in any and every way possible. Anyone who thinks companies like this won't abuse a growing role in peering and interconnection relationships to unreasonably offload normal network costs on to content companies has been asleep for a decade. That's been a publicly stated AT&T goal since they threw gasoline on the net neutrality debate back in 2005.
That said, I'm not sure there's any truly innocent parties here.
The biggest obstacle in understanding this issue is a lack of transparency in the agreements being signed by all parties involved. There continues to be oodles of analysis about what all of this means without a single soul having access to the actual data. A reasonable first step to me is for everyone to start pushing for more transparency when it comes to these agreements and raw transit data, allowing regulators and consumers alike to judge for themselves precisely who's engaged in anti-competitive shenanigans.
