FCC Begins Investigating Comcast And Verizon Making Netflix Pay To Avoid Congestion

from the but-still-won't-call-it-net-neutrality dept

Throughout the most recent version of the net neutrality fight, Tom Wheeler and the FCC has worked hard to keep interconnection issues a separate debate, even though interconnection is likely where the real fight has moved. In short, if you haven’t been following this closely, net neutrality has historically been about discrimination on the last mile — from your broadband access provider to your home — but over the past couple of years, the big broadband companies (mainly Comcast) have realized they can get the same basic result (getting big internet companies like Netflix to double pay for your bandwidth) by clogging up the transit, and getting Netflix to pay up to interconnect directly. However, in the minds of most people, it’s the same thing. Even while the congestion is happening on the network, the end result for everyone is effectively the same: Netflix has to pay to get a quality stream to you, your connection sucks if they don’t pay, and Comcast collects all the money. So, when John Oliver did his piece on net neutrality, he actually illustrated it with the interconnection battle. And that’s because it’s really the same thing.

Well, it’s really the same thing to just about everyone… except the FCC. The FCC’s request for comments explicitly tries to avoid delving into the interconnection fights, but thanks to things like John Oliver’s coverage, many of the comments the FCC has been receiving have been about those issues anyway. Apparently realizing that he can’t avoid the issue, FCC boss Tom Wheeler has announced that he’s now “gathering information” on these interconnection fights and has specifically asked Comcast, Verizon and Netflix to hand over the details of their arrangement. Wheeler even quotes one of the comments that the FCC has received during the NPRM comments that talks about the interconnection battle, and notes that there are many more like that.

In reading the emails I receive, I thought this one from George pretty well sums up public concern:

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? The consumer is the one suffering! What can you do?

We don’t know the answers and we are not suggesting that any company is at fault. But George has gone to the heart of the matter: what is going on and what can the FCC do on behalf of consumers? 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. Recently, at my direction, Commission staff has begun requesting information from ISPs and content providers. We have received the agreements between Comcast and Netflix and Verizon and Netflix. We are currently in the process of asking for others.

To be clear, what we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I.

That sounds good, but we’ll see what actually comes of it. The fact that Wheeler has tried hard to separate interconnection from net neutrality hasn’t been particularly encouraging. The personable “I’ve experienced these problems myself” is nice, but it means little if the FCC doesn’t actually realize what’s going on here. Also, the quote at the end about transparency also sounds good, but we’ll have to see if the FCC actually lives up to it and shares the details or keeps the whole process secret.

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Companies: comcast, netflix, verizon

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Comments on “FCC Begins Investigating Comcast And Verizon Making Netflix Pay To Avoid Congestion”

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Anonymous Coward says:

I’m going to be outraged if the Tom Wheeler says dividing the internet into fast lanes and slow lanes, is perfectly fine.

It’s not fine, because in the end fast lanes hurt residential customers. If companies such as Netflix are charged for fast lane access over the last mile, they’re going to end up passing those costs onto their customers.

That means higher subscription costs for Netflix customers, all thanks to fast lane price gouging.

zip says:

freeloading bandwidth hogs

The other alternative would be for ISPs to charge Netflix users extra for their heavy consumption of resources (or even to block Netflix completely just like ISPs have historically done with P2P networks).

Is it fair that a person who uses the internet only for email and occasional light browsing should have to pay the same price as a large household, with multiple computers, who watch numerous hours of Netflix daily?

The additional price charged to bandwidth hogs (in whatever form) can help pay for the capital improvements needed so they can keep being bandwidth hogs.

No matter how costs are distributed among customers, some people will always think it’s unfair to them. But I think the fairest way would be to charge according to bandwidth used. (having throttled tiers can be a major pain, though) But rather than logging every customer’s bandwidth usage and billing accordingly, a less privacy-invasive way to achieve the same goal is to charge the major bandwidth-hogging companies like Netflix directly.

Anonymous Coward says:

Re: freeloading bandwidth hogs

‘freeloading’? If they didn’t pay for it, then that’s appropriate. But why should people who pay for a set internet speed pay more for actually using said internet speed? If you’re upset that you pay for internet speeds you don’t use, complain to your ISP for not giving you the choice.

And you know what else can help pay for capital improvements? the tax breaks and benefits that ISPs are given for the purpose of improvements that they don’t actually do, or the already massively inflated prices we already pay, or not risking being fined for fraud or deceptive practices.

zip says:

Re: Re: freeloading bandwidth hogs

On the contrary. Rather than metering and billing customers according to their personal use — bill the companies such as Netflix who are the chief enablers.

It’s more like the idea of taxing tobacco companies or gun manufacturers to pay for health care costs … caused directly by their products.

Chronno S. Trigger (profile) says:

Re: Re: Re: freeloading bandwidth hogs

It’s quite obvious that you have no idea how the Internet works. Bandwidth and bytes downloaded are two completely different things.

Bandwidth is the amount of information that can pass threw a connection at any one instant. Bytes downloaded is a count across a set amount of time. Counting bytes is not going to fix the imagined bandwidth issue, it’s just going to shift where the problem is.

I pay for bandwidth, not bytes downloaded. If you think you pay too much for your bytes downloaded, maybe you shouldn’t have agreed to pay for bandwidth.

Anonymous Coward says:

Re: Re: Re: freeloading bandwidth hogs

the companies ALREADY PAY for their bandwidth, to their own ISP’s. Same as the customers already paid for THEIR traffic.

What the ISP’s want here is getting paid twice for the same service.

Considering your analogy, I will not even comment on this, since I can’t imagine any reality where this would be even in the ballpark of being comparable.

jupiterkansas (profile) says:

Re: Re: Re: freeloading bandwidth hogs

When you charge Netflix more all you’re really doing is taking money from Netflix customers who are already cable customers. Where do you think Netflix’s money comes from. It the public that’s paying at both ends. You pay for cable so you can use Netflix, then you pay for Netflix.

Why should all that money end up with the cable company as if Netflix provides nothing of value and the only thing that matters is the transmission of data. The data’s just as valuable as the wire it’s carried on.

zip says:

Re: Re: Re:2 freeloading bandwidth hogs

I have the same complaint about cable TV. I rarely watch television, and even then, I primarily only watch 2 or 3 channels. I would much rather pay individually for the 2 channels I watch than for the 200 channels I never watch (mainly because 99% of cable TV is garbage)

Cable TV is a huge ripoff. There’s no option to pay for what you actually consume — it’s either all or nothing. I hate the idea of having to pay for channels (and shows) that I not only don’t watch, but would gladly go out of my way to keep my money out of their slimy pockets. It’s no less than disgraceful what passes for “entertainment” these days. And sadly, “news” as well.

RD says:

Re: Re: Re:3 freeloading bandwidth hogs

“I have the same complaint about cable TV. I rarely watch television, and even then, I primarily only watch 2 or 3 channels. I would much rather pay individually for the 2 channels I watch than for the 200 channels I never watch (mainly because 99% of cable TV is garbage)

Cable TV is a huge ripoff. There’s no option to pay for what you actually consume — it’s either all or nothing. I hate the idea of having to pay for channels (and shows) that I not only don’t watch, but would gladly go out of my way to keep my money out of their slimy pockets. It’s no less than disgraceful what passes for “entertainment” these days. And sadly, “news” as well.”

So to use this as an allegory for “Bandwidth hogs” – thats like selling the customer “200 channels! Pay one price!” and then when the customer actually watches most or all of those channels, the Cable Co. comes along and says “hey now, you are watching WAY too much of the channels available to you! Why are you being unfair to others who only want to watch a few channels? Don’t you know there is a limit on how many channels can be watched at any one time? Those channels take resources to broadcast! If you insist on HOGGING all the channels, we will have to either charge you more, or limit how many channels you can watch in a day/month. It’s only fair.”

In other words, they advertise and sell you on the BANDWIDTH (speed) of your internet connection, then turn around and try to limit you on the DATA you transfer using the bandwidth THEY promoted the package to you with. It’s a bait-and-switch, and they have the entire Congress, FCC, and most of the seriously ignorant and uninformed public going right along with them that this is all somehow “unfair” and people are “hogging” the very connection they pay for and was sold to them as “unlimited” at a certain speed.

SPEED != (thats not-equal for you luddite-types) DATA TRANSFER.

Please, people, try to understand how this works. Also see the post a couple above me that shows the cost (which is PENNIES PER TERRABYTE) they pay to then resell you at 1000x markup, then set you against your neighbor and fellow man when they OVERSELL their lines and, instead of investing the 75 BILLION they want to buy Time Warner with into, you know, actually IMPROVING their capacity, they instead spend it on lobbying Congress and pay their CEO and executives fat bonuses (in the double-digit MILLIONS of dollars… PER YEAR.)

Anonymous Coward says:

Re: Re: Re:3 freeloading bandwidth hogs

Cable TV is a huge ripoff.

That is the elephant in the room, cable companies wish to keep selling their program packages, and Netflix,Hulu and Amazon etc. are encouraging cord cutting by providing a better service. It seems to me that the cable providers are trying to replace lost revenue by charging the companies that are doing a better job competing for TV viewers.

Anonymous Coward says:

Re: freeloading bandwidth hogs

just for your interest, the price for traffic volume an ISP has to pay is about 5-10 US cent per Terabyte. TERABYTE. the actual cost for transfer volume for an average internet user is less then 5 cent from your monthly bill, for powerusers it is in the majority of cases still less than a dollar.

The whole idea of justifying caps with the “huge” cost for the data that is transferred is ludicrous.

The issue here is, that the ISP’s are unwilling to set up the network to cope with the concurrent bandwidth that is used, because they prefer overselling their network multiple times over. They promise bandwidth (not transfer volume) to their customers that their network can’t reliably supply, because they refused to update said network.

That they now turn around and complain that the customers actually want to use what they pay for is disingenuous at best. “Poweruser X is hogging bandwith” is a cheap excuse, because user x PAID for it. Demanding payment from services the customer accesses with HIS bandwith that HE paid for is akin to blackmail (nice business you have here, wouldn’t it be a shame if something happened to it…)

Let me put it bluntly, the ISP’s are at fault and if they are unwilling to actually provide what they sell, I can only see this as fraud.

zip says:

Re: Re: freeloading bandwidth hogs

“just for your interest, the price for traffic volume an ISP has to pay is about 5-10 US cent per Terabyte. TERABYTE.”

The real cost comes in laying cables, of course. Once the considerable cost of infrastructure is paid for, all bandwidth is essentially free.

But judging by the prices charged by ISPs in truly competitive markets, it would seem that bandwidth may go for considerably more than 10?/TB.

Note the prices in Utah’s Utopia, municipal network that connects to eight different ISPs.


Although a relative bargain, gigabit broadband, the top tier, still costs considerably more than the lowest tier. And I’m going to assume that gigabit customers, on average, don’t use anywhere near their full potential.

It is, of course, quite annoying that these kind of multi-ISP situations are so rare. This should be the standard of service, not the rare exception, and it’s such a disgrace that an important utility as broadband internet has turned out to be a single-company (unregulated) monopoly (or at best, duopoly) for the vast majority — with all the inherent problems that lack-of-competition predictably brings.

Anthony Etter says:

Re: Re: Re: freeloading bandwidth hogs

You do know that the cost of laying the original cables came from tax paying dollars? The government funded ISPs for their infrastructure. They have barely spent a dime on it. So dont say it is costly. It is actually quite cheap. Farmers somewhere in the united states got together and decided to lay their own line down and didn’t spend that much on it. Guess what they have a shit ton faster internet than the rest of the United States.

Google is another example of this. Offer gigabit lines for a fraction (about half) of the top tiered broadband lines (~$200). They are able to offer a shit ton faster speed for 75ish and arent claiming bandwidth issues.

Anonymous Coward says:

Re: Re: Re: freeloading bandwidth hogs

“Once the considerable cost of infrastructure is paid for, all bandwidth is essentially free.”

Wow. Are you actually that ignorant or just spewing bullshit?

“in truly competitive markets, it would seem that bandwidth may go for considerably more than 10?/TB.”

Please explain the relevance of comparing the cost of infrastructure to potential market prices.

“broadband internet has turned out to be a single-company (unregulated) monopoly “

In that case it should be regulated like a utility, (not that such regulation achieves anything).

Anonymous Coward says:

Re: freeloading bandwidth hogs

Get this… There are no bandwidth hogs. That’s a red herring.

You pay for a set package. That’s what you give the money for an internet connection. You can not exceed that speed or amount. You are regulated to what you pay for. If you are not getting what you pay for, it isn’t because of someone else taking what you are supposed to be getting; they can’t.

It’s because the ISP has over sold its resources and has not put the money into upgrading.

Put the blame where it really lays.

Anonymous Coward says:

Re: freeloading bandwidth hogs

If I pay for 20Mb/sec then I am paying for (20 Mb/sec) * (60sec/min)(60min/hour)(24hour/day)*(~30days/month)

According to Google (I will just use its estimates) there are

2.62974e6 seconds in one month

(just Google Seconds in a month).

So I am paying for (2.62974e6 seconds/month) * (20 Mb/sec) = 52,594,800 Mb/month = 6,574,350 MB/month

So if the ISP wants to set the cap at ~6.6 TB/month for a 20 Mb/sec connection I’m perfectly fine with that. Anything else is false advertising. For them to set a cap at 600Gb/month would not deliver me an (average) bandwidth of 20Mb/sec but, instead, would deliver a much much smaller average bandwidth (~0.23 MB/sec) which is a whole lot less than what I’m paying for.

Imagine if the ISP gave me 20Mb/sec but limited my bandwidth usage to 100 MB/day. Except instead of doing that they’re setting the caps on a per month basis. To me, as a consumer, if I’m paying for 20Mb/sec I want a reliable 20m/sec (which is not what the ISP is offering me). If I decide to pay for more bandwidth than I use that’s my problem.

zip says:

Re: Re: freeloading bandwidth hogs

“If I pay for 20Mb/sec”

Why should anyone be limited to only 20 megabit speeds? That’s another thing I dislike about today’s broadband internet: tiered speed-caps. Although I rarely download anything, when I do, I hate waiting for it. So should I pay for the fast tier that I’d rarely ever use, or the slow tier that occasionally has me pulling my hair out waiting? I would lose either way. Personally, I’d rather have truly unlimited speed with a fairly low monthly cap (and ideally ‘rollover’ gigs) Or just pay per gigabyte (in addition to a low monthly service charge). That’s what I love about Usenet and VPN ‘block’ accounts — I only pay for what I actually use (and for the months when I use nothing, I pay nothing)

There are many different types of ways that costs can be divided up between the various users on this shared resource we call ‘the internet’ – but one thing I would especially like to see is anything that contributes to more people getting into having internet service that would not otherwise, because to them it’s just not worth the high monthly price — a price that is certainly not helped by the segment that consumes bandwidth voraciously.

Anonymous Coward says:

Re: Re: Re: freeloading bandwidth hogs

…and? There are very few powerusers that have residential broadband requirements. Remember that the end-line ISPs are charged on a GB/s basis. Consumers are charged the same. It is not the consumers’ fault whent he end-line ISPs are breaching their contract. So stop blaming the consumers of what is being paid for and start poking the end-line ISPs asking them why they are being charlatans.

CrushU says:

Re: Re: Re: freeloading bandwidth hogs

“Personally, I’d rather have truly unlimited speed with a fairly low monthly cap (and ideally ‘rollover’ gigs) Or just pay per gigabyte (in addition to a low monthly service charge).”

First problem: There is no such thing as unlimited speed. We are restricted to how fast the electrons (or photons if you’re on fiber) can travel at the very least. In reality, it’s slower because whenever the data needs to be routed, a computer has to do the routing, which slows it down. So, we can’t have unlimited speed, which leads us into the second problem…

Since we can’t have an unlimited speed, perhaps we have a really really high speed, say 100GB/s for sake of a simple number. (I don’t really know what the actual speed is.) This is the speed of the entire network at once. To simplify, we can assume any one end-user could get this speed to another end-user at any time. (Because remember, if you’re downloading the data, someone else is uploading the data. It doesn’t just come out of a water main somewhere.) Now say two people queue up a download at the same time. Who gets the 100GB/s connection? The ISP’s answer is to divide the connection; each person gets 50GB/s of bandwidth allocated to their connection. But we have way more than two people… Lets say we have 100,000 people. If we were to divide this evenly, each person would have a DEDICATED 1MB/s bandwidth they could use whenever they wanted. And now we’ve finally gotten to the reason why this whole setup doesn’t work at all the way you want it to, and never will…

The network would never dedicate any strict amount to any subscriber, because no subscriber uses exactly the same amount at all the time. So instead, they pretend to allocate 10MB/s to each person, even though that’s 10x the capacity of their network. The trick is that as long as not everyone tries to use their full capacity at once, no one notices. This is known as the Banker’s Algorithm, because banks do it, too.

TL;DR: Actually there’s not a good way to condense it further. Go take a Networking 101 course at a community college for more info.

Anthony Etter says:

Re: freeloading bandwidth hogs

You are very wrong sir or madam. We already have a tiered system. My household pays 200 bucks for the top tiered offerd in my location. Consisting of 50mb/s down and 5 up. We have heavy use for multiple users, Netflix, Amazon On Demand, Gaming, Youtube, etc. Now think of it this way. On top of paying 200 a month I would have to pay extra for extra use of bandwidth. You believe ISPs are running out of bandwidth. They arent at all. Even if they are, the government has given them money (tax paying money) for infrastructure upgrades. AT&T for example spent that money on exclusive rights to the iphone for the first few gens. Billions in tax money, so we paid them twice. One was without our consent, the other was.

Say you are a heavy UPS user, ordering and selling a lot and using them as your preferred shipping and delivery method. What ISPs are doing would be the samething as UPS charging you more for the inconvenience in gas for the excess shipping and delivery. They arent the same, they are polar opposites of one another, ISPs charge you once and then the other side too. UPS cuts the pricing when you do more bushiness with them. The more business you bring to an ISP, the heavier the cost is going to be.

Now think of it this way, bandwidth is bandwidth. What you dont get is ISPs are throttling netflix, because more people use it, not because any single person uses it more than another. It is because more of their consumers use it. Now take a 10gb game and a 10gb netflix movie. They will throttle the netflix movie and not the game, regardless of them being both 10gb. How is that right at all? It isnt, it is supposedly illegal but cant be enforced.

If you think a single movie a night from netflix isnt bad you are right, but ISPs dont see it that way. If you are capped at 300gb as Comcast supposedly is, you would only be barely be able to watch a movie a night for an entire month. Why? Because the bandwidth allocated to netflix for 30 movies would be 300gb. Then you have no room for youtube, email, facebook, gaming, etc.

Bandwidth is not an issue at all, we arent running out of it. If we are it is the ISPs fault for not using their record profits for the upgrades supposedly needed.

Bandwidth refers to two different things: the speed you are allocated (50mb/s down and 5mb/s up) and the amount you are aloud to use on a monthly basis (300gb cap). Most people I know get their speed throttled and are capped even though they might go through that cap in a weeks time. Especially if you are in a heavy internet household.

One final thing. Why doesn’t comcast throttle Amazon On Demand (same exact thing as netflix)? It is because not as many people use it, but a 10gb video from AOD is apparently different than a 10gb one for netflix. Data is data, it should not be segregated. I thought we left segregation behind in the 60s.

Anonymous Coward says:

Re: Re: freeloading bandwidth hogs

“Bandwidth refers to two different things: the speed you are allocated (50mb/s down and 5mb/s up) and the amount you are aloud to use on a monthly basis (300gb cap)”

This describes the corporate speak definition of how they bill you for your internet connection. It is not however, a correct technical definition of the word “bandwidth”.

James T (profile) says:

Re: freeloading bandwidth hogs

The idea that they should charge Netflix is wrong because Netflix is properly paying for there connection to the internet already. They are providing what the end user requested.

The end user here is initiating the movie. This is not a broadcast from Netflix to a wide range of people clogging the internet.

ISP’s happened to sell “unlimited” connections to users. These users are trying to use the connection.

If the ISPs are unhappy with their current income from their users then they need to make changes on that area. To go behind the scenes and try to get money from Netflix is a from of extortion.

Really this is less than a FCC issue and more of an FTC issue on the part of the ISP services.

andypandy says:

Re: freeloading bandwidth hogs

this is crap, people being bandwidth hogs is an ISP argument, I pay more for a faster connection with no download cap, all they need to do is have a package where people pay less for slower speeds with bandwidth caps if they want.

Nobody is a bandwidth hog, people pay for a specific package and use it , why would they be called bandwidth hogs. if i want to watch three different netflix shows in my house and my internet is capable of doing so then am i a bandwidth hog or using the internet as it was meant to be used and as i have paid for.

Maybe if the FCC sees how Verizon and Comcast have been abusing their customers by not upgrading when signing up millions of new subscribers, maybe then we will get to the bottom of the problem.

Isma'il says:

The comparison is actually quite simple here.

What’s going on vis a vis ISPs like Comcast and Verizon versus Netflix and other streaming video services is the attempt to lock competition out of the market. It’s as simple as that. Streaming services are a threat to the pay-tv market much the same as digital music sales are a threat to the RIAA-imposed album/CD sales model. It’s just simply a replay of an old battle, and cable providers don’t like competition anymore than the RIAA does.

What we have here is the market (users) deciding which direction they want to go in order to get the content they want and the ISPs throwing tizzy fits over it, whilst trying to strongarm those said alternate content providers. Ultimately the consumer loses.

Ozzy_98 says:

There’s a lot of people here who don’t seem to grasp what is going on, or what an interconnect is. Say Netflix buys 4 10 gig ethernet circuits from AT&T bundled into a 40 gig connection. What AT&T will do is rather than put the connection on an “edge” router like a normal business customer, they put them on a border router, where they peer (for free) with other customers. So they’re in a very real sense dumping their customer’s 40 gigs right onto another ISP’s interconnect, and never crossing their own backbones to get to end users. So other ISPs, say for example Verizion, is now seeing almost all 40 gigs of it’s uplink to AT&T as Netflix traffic.

Digger says:

Net Neutrality in a Nutshell...

Packets come in, traverse the network, and exit to the next network unmolested in any way.

No redirects, no throttling, no interceptions, no mangling, no changing of data (aside from what naturally occurs in the network stack, ie NAT’ing, PAT’ing).

QOS is fine, as long as it’s only traffic “type” based. No source or destination rules allowed, ever.

Any backbone provider or ISP caught modifying error codes, redirecting DNS traffic, traffic shaping, illegal QOS rules, traffic copying to the NSA/CIA/FBI/local police, log storing, etc will immediately suffer the following consequences.

100% of their infrastructure shall immediately become common carrier.

All patents belonging to the infringing entity will immediately expire and become public domain, with absolutely NO recourse available whatsoever. Any lawyer / executive for said company attempting to intercede will be summarily executed.

All copyrights belonging to the infringing entity will immediately expire and become public domain, with absolutely NO recourse available whatsoever. Any lawyer / executive for said company attempting to intercede will be summarily executed.

Anonymous Coward says:

Wheeler: Ugh these people are making me do things, guess I have to now.

Wheeler: Hey can you guys give me all the details for that deal you made with Netflix?

Verizon/Comcast: No.

Wheeler: Well I tried, guess there isn’t anything I can do. Hey you guys have any openings for a high position where I don’t have to do anything?

Newto (profile) says:

Interconnection Vs Net Neutrality

Please explain Interconnection Vs Net Neutrality.

That part really confuses me. It seems like everyone dances around this topic, but no one really clearly explains the difference and why there is so much outrage when they are thought of as two separate issues and the likes of Netflix are asked to pay ISPs for a better connection.

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