t-mobile unlimited data planFCC Chairman Tom Wheeler said Friday that the commission will investigate a dispute between Verizon and Netflix which, according to Netflix, has caused Verizon broadband customers to sometimes see a lower resolution version of Netflix streaming video content. Comcast and Netflix have had similar disputes, which Wheeler said the commission also will investigate.

“At my direction, commission staff has begun requesting information from ISPs and content providers,” said Wheeler in a statement. “We have received the agreements between Comcast and Netflix and Verizon and Netflix. We are currently in the process of asking for others.”

Wheeler made a point of distinguishing the Verizon/Netflix and Comcast/Netflix disputes from the issue of Net Neutrality, also known as the Open Internet.

Wheeler referenced the Open Internet order that he has proposed, noting that “if adopted the new rule would prohibit bad acts such as blocking content or degrading access to content.”

He noted, however, that there is “another area” of Internet access, and that, he said, is “the exchange of traffic between ISPs and other networks and services.”
This is an important distinction for Wheeler to have made, because it suggests he is not buying Netflix’s argument that exchange of traffic between operators of Internet networks is an element of Net Neutrality.

And although Netflix has argued that Verizon is not giving its broadband customers the service the customers have paid for, Wheeler also noted that “consumers pay their ISP and they pay content providers like Hulu, Netflix or Amazon.”

In what he called a “bottom line” summary of the commission’s actions, he reiterated the notion that both ISPs and content providers can impact streaming media quality. “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.”

The Verizon/ Netflix Dispute
Traditionally Internet network operators have exchanged traffic for free if the amount of traffic they send to and receive from each other is roughly equal. If not the operator that receives more traffic from the other typically receives compensation from the operator that sends more traffic.

Netflix and other content providers initially connected to companies like Verizon and Comcast through other network operators. More recently some of them, including Netflix, have established their own content delivery networks to bring content to storage servers at geographically disperse locations, where they connect to broadband service providers such as Comcast and Verizon, provided that the broadband service providers agree to this arrangement.

According to Netflix, some broadband providers do not charge for interconnection when traffic is exchanged in this manner. But reportedly both Comcast and Verizon agreed to this arrangement only if Netflix would pay for a traffic imbalance – and Netflix did so begrudgingly.

But although these agreements were expected to relieve congestion that had occurred on connections between Netflix and the broadband providers during previous disputes, problems reportedly continue.

When Netflix reportedly informed some of its customers who use Verizon broadband that Verizon was responsible for the congestion, Verizon sent Netflix a cease-and-desist letter. Netflix refused to buckle for about half a day but eventually complied. In the cease-and-desist letter, Verizon hinted that Netflix was not using the content servers that were the focus of the companies’ negotiated deal but instead was delivering content to Verizon through other network operators. Netflix did not respond to an inquiry from Telecompetitor if Verizon’s claims were accurate.

Traditionally details about Internet interconnection agreements between network operators and between network operators and content providers are closely guarded. It will be interesting to see how willingly Verizon, Comcast, Netflix and others provide the information Wheeler has requested – and even more interesting to learn what is actually going on with regard to the various interconnection agreements.