In a statement [PDF] released Friday afternoon, Wheeler cites one of the many e-mails he’s received about this issue of interconnectivity.
“Netflix versus Verizon: Is Verizon abusing Net Neutrality and causing Netflix picture quality to be degraded by ‘throttling’ transmission speeds? Who is at fault here?” reads the e-mail from a consumer named George. “The consumer is the one suffering! What can you do?”
Technically, George is misstating what Verizon has done to Netflix’s data. Throttling would be in violation of the recently gutted neutrality rules, which the major ISPs have promised to abide by pending approval (and inevitable, eventual legal challenge) of the new ones.
What started happening last summer is that Verizon and others began allowing Netflix data to bottleneck. See, Netflix pays a lot of money to bandwidth providers to carry their streaming videos. But in order to reach the end-users, that data has to be handed off to ISPs who pipe it into your home. Until last year, when Netflix’s downstream connection started to get congested, the ISPs would open up more connection points. Think of it like the supermarket that temporarily opens up a register or two to keep the checkout lines moving.
Feeling that they weren’t getting the money they deserved for providing a service that consumers already pay good money for, ISPs simply stopped opening these extra lanes and allowed Netflix to back up. This put Netflix in the position of having to choose: Lose customers who don’t care or understand why their streaming episodes of Burn Notice look like 8-bit video games, or pay the ISPs for better access to their networks.
And in February, Netflix agreed to pay Comcast an undisclosed amount for a more direct connection to the Comcast network. Almost immediately, speeds improved. Then a few weeks back, it reached a similar deal with Verizon, though that hasn’t really shown the desired results yet.
Netflix is certainly not the first company that has paid for this sort of connection, but since it represents the largest chunk of downstream traffic in the U.S. and has a history of being brash in its feelings toward ISPs, these deals have brought these “paid-peering” agreements to the fore.
“We don’t know the answers and we are not suggesting that any company is at fault,” writes Wheeler in his response to the e-mail. “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.”
Wheeler says he recently directed his staff to request relevant info from both the ISPs and affected content providers regarding these issues of interconnectivity and pay-to-play access.
The commission has obtained and is looking at the deals that Netflix made with both Comcast and Verizon. It has also asked to review other peering arrangements.
“To be clear, what we are doing right now is collecting information, not regulating,” cautions Wheeler. “We are looking under the hood. Consumers want transparency. They want answers. And so do I. The bottom line is that consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire, especially content they’ve also paid for.”
In a statement released to Consumerist, Comcast’s VP of Government something or other says the company welcomes Wheeler’s look under the hood.
“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,” says the statement from a company that allowed Netflix traffic to effectively grind to a halt and only changed its tune when A) Netflix agreed to pay up and B) when Comcast needed to look good before regulators in order to get them to sign off on the company’s pending acquisition of Time Warner Cable.