Recently, Verizon broadband subscribers have been running into problems with Netflix. A little digging has turned up that this is not because of Netflix’s servers, or technical problems, but because Verizon is essentially throwing a hissy.
How, precisely, is Verizon doing this? The short answer is that Verizon is arguing with Cogent, one of Netflix’s biggest data distributors, over peering, namely an agreement between two companies to “share” Internet traffic for free, using ports. Essentially, Verizon lets Cogent’s data over their pipes without a problem, Cogent lets Verizon’s data over, everybody’s happy. Except apparently Verizon has decided to get all passive-aggressive and pissy about it:
When the ports start to fill up (usually at 50 percent of their capacity), the internet companies add more ports. In this case, through, Verizon is allowing the ports that connect to Cogent to get crammed. ”They are allowing the peer connections to degrade,” said Dave Schaffer, chief executive officer of Cogent said in an interview. “Today some of the ports are at 100 percent capacity.”
Verizon hasn’t named Netflix directly, but has cited a “large video provider” as being why they’re not letting Cogent have more ports. The fact that Verizon just so happens to own its own streaming video provider is a total coincidence.
There are two problems with Verizon’s… ah… strategy. The first, and most basic, is that Redbox can’t compete. A quick browsing of the selection shows that it’s weak next to Netflix, and it doesn’t support nearly as many platforms as Netflix; the plan is clearly to close the gap by having you go to a Redbox kiosk, because we all miss having to drag a movie back to the rental place, and that idea worked so well for Blockbuster.
Secondly, when Netflix inevitably takes the biggest cable providers in the nation to court over stunts like this, said providers are going to have a very difficult time explaining how, precisely, their behavior isn’t anti-competitive. It’s going to be pretty hard to spin it as anything else. And that’s not even getting into net-neutrality rules, which we’re fairly sure the FCC will be eager to discuss at some point.
Some would argue that they don’t have to carry Netflix’s data, or that Netflix should pay for the infrastructure, which is hideously wrong. In many areas of the country, there’s only one or two broadband providers. To say that Netflix should have to pay for Internet infrastructure is like arguing that since that new McDonald’s franchise is so popular, the company should pay for a new Interstate for people to go there… or get a nasty visit from the health inspector.
ISPs have an obligation to keep up with the demands of their consumers and not to artificially limit them. The consumer has chosen to use the Internet they pay for to watch Netflix, and thus the ISP is obligated to bring them Netflix. Verizon (and Comcast, and Time Warner) may want to compete with Netflix, but they have to do so fairly, and part of that is ensuring that the consumer is able to make a choice… even if that choice isn’t one they like.