netflix logoJust when disputes between broadband providers and content providers about content delivery and Net Neutrality seemed to be over, along came the revelation late last week about Netflix throttling of traffic to wireless customers of AT&T and Verizon. Netflix admitted the practice in response to an inquiry from the Wall Street Journal, which had conducted speed tests suggesting that AT&T and Verizon wireless customers received lower-speed streams in comparison with customers of T-Mobile and Sprint.

Netflix said it made the decision to use the different streaming speeds because of the differences in how various wireless companies handle data overages. While AT&T and Verizon customers must pay higher rates per bit when they exceed their monthly data allotments, T-Mobile and Sprint simply throttle traffic back to a lower data rate when the allotment is exceeded.

Netflix also noted that it was working on tools that it plans to introduce to customers to enable them to make their own decisions about the speed of their stream.

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Netflix Throttling
The broadband provider industry, which is prevented from differentiated traffic throttling practices, expressed outrage at the Netflix news.

An AT&T executive reportedly told The Verge that the company was “outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent.”

The American Cable Association (ACA) took concerns a step further, calling on the FCC to initiate a Notice of Inquiry into “the practices of edge providers and how these companies can threaten the openness of the Internet.”

ACA President and CEO Matthew M. Polka noted that “ACA has said all along that the [FCC’s] approach to Net Neutrality is horribly one-sided and unfair because it leaves consumers unprotected from the actions of edge providers that block and throttle lawful traffic.”

FCC Response?
The big question now is how the FCC is likely to respond, or whether it will respond at all, to the Netflix throttling revelations. When the commission imposed Net Neutrality guidelines early last year, it noted that the guidelines applied only to broadband providers – and some stakeholders argue that the commission simply may not have the authority to impose similar guidelines on content providers such as Netflix, which are sometimes known as “edge providers.”

Where Netflix may be on shakier ground, however, is with regard to transparency and disclosure requirements. Reportedly, neither AT&T nor Verizon nor customers of either company were advised that Netflix was using a lower data rate for AT&T and Verizon customers. The NetCompetition e-forum author argued that Netflix could be in violation of FTC fair business rules by secretly throttling users’ streaming rates.

If nothing else, the FCC may need to rethink how it investigates Net Neutrality complaints.

“Until now, the expectation was if there was traffic throttling detected on the network, it was presumed to be the work of an ISP,” notes NetCompetition. “Now the FCC knows that is not necessarily true.

“Now when an edge platform seeks to accuse an ISP of a net neutrality violation, the FCC’s investigation should responsibly cast a wider net than before we learned of Netflix’ duplicity, and investigate if an edge provider has been throttling or blocking the Internet traffic in question.”

Join the Conversation

2 thoughts on “Netflix Throttling: What (If Anything) Will the FCC Do?

  1. Why would the FCC do anything?

    As your article states, the FCC's Open Internet rules apply only to ISPs. Netflix is not an ISP, so the FCC has no jurisdiction over them.

    Now if the FTC investigates Netflix for not delivering the service that its customers paid for, that's another matter altogether.

  2. I think it’s rather disingenuous for AT&T to complain about Netflix throttling their data streams to AT&T wireless customers. After all, AT&T makes a lot of money off the fees they charge when their customers exceed their monthly data allowance, and Netflix is one of the prime reasons for such overages. But look at it from Netflix's perspective: if their customers have to pay twice, once for Netflix, and again to AT&T for the data, they may lose business. So it’s in their best interests to reduce data to ISPs that are known to charge by the byte.

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