The FCC Is Investigating The Netflix-Verizon Scrap

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The FCC is investigating the fight between content companies and ISPs, which has seen Netflix warn its customers that Verizon’s network is “crowded” at certain times, Verizon fire back that the fault is Netflix’s, and the content company respond by making a Chris Christie-esque pronouncement that the ISP is closing lanes during rush hour.

This is one front of the wider net neutrality struggle. ISPs are irked that certain content companies take up much of their capacity and thus want to extract revenue from them. Content companies, in contrast, find that ludicrous, as they are merely providing content to paying customers of both parties, customers to whom ISPs sold faster connections using the promise of smooth video delivery.

The FCC isn’t picking a side yet. FCC Chairman Tom Wheeler said the following this morning in a statement:

Consumers pay their ISP and they pay content providers like Hulu, Netflix or Amazon. Then when they don’t get good service they wonder what is going on. I have experienced these problems myself and know how exasperating it can be.

Consumers must get what they pay for. As the consumer’s representative we need to know what is going on. I have therefore directed the Commission staff to obtain the information we need to understand precisely what is happening in order to understand whether consumers are being harmed.

The arguments above deserve a squaring. If we don’t find some sort of working order, we’ll see endless sniping among parties that have countervailing economic interests, with consumers — that would be you and me — caught in the middle.

When asked for comment, Verizon provided TechCrunch with the following statement:

Internet traffic exchange has always been handled through commercial agreements. This has worked well for the Internet ecosystem and consumers. We are hopeful that policy makers will recognize this fact and that the Internet will continue to be the engine of growth of the global economy.

Netflix also provided TechCrunch with a statement:

We welcome the FCC’s efforts to bring more transparency in this area. Americans deserve to get the speed and quality of Internet access they pay for.

Both statements essentially re-indicate their already stated views.

Update: Comcast reached out TechCrunch with a detailed statement Sena Fitzmaurice, its VP Government Communications that is worth reading:

We welcome the Chairman’s attention to these important issues in the Internet ecosystem.  Internet traffic exchange on the backbone is part of ensuring that bits flow freely and efficiently and all actors across the system have a shared responsibility to preserve the smooth functioning and highly competitive backbone interconnection market. We welcome this review which will allow the Commission full transparency into the entire Internet backbone ecosystem and enable full education as to how this market works.

We have long published our peering policies for example, and are open to discussions about further disclosures that would benefit consumers. We also have voluntarily shared a vast array of information about our peering and interconnection practices with the FCC. We also agree with the Chairman that the broadband consumer should be the focus of this inquiry and not any particular business model.  We look forward to continuing to work with the FCC on these issues.

As a final note, Chairman Wheeler cited a consumer note sent in via email as thought-provoking on this issue. So if you did have a view, one way or the other, sending it to the FCC might be a decent use of your time.

IMAGE BY FLICKR USER ERIC HAUSER UNDER CC BY 2.0 LICENSE (IMAGE HAS BEEN CROPPED)