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The Great Peering War Rages Again

Carol Wilson
2/19/2014
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In the wake of last month's court decision overturning the Federal Communications Commission's authority to impose open Internet rules, we speculated as to how long it would take for a Net Neutrality dust-up to occur. Now we have the answer: Not long. (See Net Neutrality Fight Not Over and Survey Says: Net Neutrality Debate Rages On.)

UPDATE: Nor did it take the FCC long to decide to wade back into the fray, as the agency has now announced plans to try once more to create rules that prevent broadband ISPs from blocking or slowing down Internet traffic from any content provider. Whether this latest attempt will address the current Netflix problems remains to be seen.

Netflix Inc. (Nasdaq: NFLX) tells The Wall Street Journal that broadband ISPs and Verizon Communications Inc. (NYSE: VZ), in particular, are slowing down its video traffic. At issue, however, isn't whether the ISPs are discriminating against the Netflix traffic, but whether they will favor Netflix by providing direct connections to its video distribution network, currently managed by Cogent Communications Holdings Inc. (Nasdaq: CCOI).

So, what it comes down to is an old battle: Do networks agree to direct "peering" when there is a very one-sided distribution of traffic? Or do they expect the network generating a much higher volume of traffic to pay extra?

This is hardly the first time such a battle has been waged. In fact, such battles date back almost a decade, and Cogent, which prides itself on doing a high volume of traffic at very low cost, has often been in the middle of them. At one point way back in 2005, Level 3 Communications Inc. (NYSE: LVLT) actually cut off Cogent from a peering agreement, sending the latter's Internet traffic into a void, because the two couldn't reach what Level 3 thought were equitable terms.

In mid-2013, Cogent reported similar peering issues with Verizon, and obviously they continue. The only difference now is that the service being affected is an Internet-based video service on which millions of Americans have become dependent, and not merely (?) Internet access.

So who's being stubborn here? Should Netflix pay for additional bandwidth, or point fingers at Verizon for treating the video distribution company like an unimportant customer whose traffic doesn't deserve special treatment?

— Carol Wilson, Editor-at-Large, Light Reading

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gconnery
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gconnery,
User Rank: Light Sabre
2/20/2014 | 1:26:15 AM
Re: Hard data
Well if the WSJ interview with Dave Schaeffer Cogent CEO is any indication, you'll be wasting your time talking to him.  He's just going to spout the party line with no proof or data of any sort that he's right rather than Verizon.  Jeez, and I'm kind of on the guy's side but he just talks like a politician. 
gconnery
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gconnery,
User Rank: Light Sabre
2/20/2014 | 12:31:51 AM
Hard data
Like others I'd be most interested in any hard data you can get out of Cogent.  Like Netflix is growing at X% rate and that's what our traffic increase to Verizon looks like and yet the slowdowns shown in these graphs are at a much larger percentage dropoff or whatever.  Anything hard that he can lay at Verizon or Comcast's door.  Seriously.
gconnery
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gconnery,
User Rank: Light Sabre
2/20/2014 | 12:26:18 AM
Re: Talking with Cogent
I don't understand how that's relevant.  Verizon, like all other ISPs, sells customers internet service with much lower upload than download speeds.  Why?  Because most customers CONSUME a lot more data than they CREATE.  So Verizon sells them a service based on that.  Yet when oddly enough Verizon doesn't have as much data to UPLOAD to Cogent as Cogent has for Verizon, they don't accept that and expect to be paid more. 


What is it we're paying Verizon for again?  Access to the internet as long as it is from peering locations that haven't sent Verizon too much data recently?  Is that really what they want us to understand?
Trevh
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Trevh,
User Rank: Light Beer
2/19/2014 | 6:47:35 PM
Re: Talking with Cogent
It might be worth asking Mr Schaeffer about the degree of overall asymmetry here. Peering is not supposed to be about the balance of traffic for a single customer (Netflix) but about the balance of aggregate traffic between the ISPs. If Cogent consistently sends much more aggregate traffic to Verizon than Verizon sends to Cogent, then the two companies are by definition not actually "peers", in which case a financial settlement deal would be more appropriate. This means a re-negotiation of fees for all traffic, not just Netflix traffic. But under the present system a company can't have it both ways: it can't be a "peer" and demand settlements at the same time. 

If Verizon isn't big enough to be in the same peer group as Cogent, they should admit it and sit down together to negotiate a new deal, with quality of service standards on both sides. (Any bets how long that would take?) 

There probably is a good case for reviewing the entire peering system in the light of all the dramatic changes  in traffic patterns in recent years. But threatening a specific customer is probably not a smart way of achieving that review, especially when, as robert duncan points out, the traffic wouldn't be there if Verizon's paying customers hadn't requested it. 

Under the new network non-neutrality regime in the US there is nothing to stop Verizon blocking or slowing specific edge provider traffic if they don't want to carry it. But they are required to tell their customers what they are doing. And those end customers are also entitled to claim that this is not what they signed up for and to request a refund. (How long would that class action take?)

We can look forward to this type of stuff entertaining us for years to come, so there is something to look forward to, even if we can't get Netflix. 

Also looking forward to your feedback from Mr. Schaeffer!

 
MarkC73
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MarkC73,
User Rank: Light Sabre
2/19/2014 | 6:40:21 PM
Re: Is someone missing a point?
This is the case of the Big Guys duking it out.  The Cogents, ATTs, Century Links, Hurricanes and VZs of the world agree to peer with each other without cost.  This works well until one guy feels that the agreement is lopsided, and doesn't want to provide additional peering for free.  Not wanting to set precedence the other guy adamantly disagrees.  Then traffic congestion between two big carriers begins to affect anyone who's flow goes between those routes in the direction of the congestion.

Smaller Carriers like the one I work for, must investigate our customer's complaints and piece together patterns of where the 'internet' is broken.  This can be difficult without the proper relationship and tools, as visibility into other people's network is limited even more so for traffic utilization.  Fortunately, we've got some experience on our bench and have relationships with our upstreams and typically can get enough information from the 'Big Guys' to figure out how to move our traffic around to avoid 'conflict areas' (yes it does sound like war).  This also helps them by alleviating traffic off the links they are having problems with.

To the customer you just see slow response to some sites at some times during the day, and you'll call in trouble.  Hopefully, the carrier you have will be willing to investigate beyond normal routing and internet connectivity as it will appear normal in general.  Because if they investigate further they'll see the effects of dropped packets and delays that you are seeing when the congestion occurs and should be able to theorize where it might be happening.

So this in my opinion has more to do with Tier 1 peering agreements and less to do with Net neutrality.  Netflix is the content that driving traffic problems but the real problem is the relationship between carriers, not necessarily about treating traffic differently.
robert duncan
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robert duncan,
User Rank: Light Beer
2/19/2014 | 5:16:56 PM
Is someone missing a point?
Isn't this a case of a Verizon end customer, who has paid Verizon for Internet service, requesting data from a site on the Internet (Netflix)? 
kjohndoe
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kjohndoe,
User Rank: Light Beer
2/19/2014 | 4:37:44 PM
Re: Talking with Cogent
Is this just another peering dispute in a long Cogent history?
 
AOL vs Cogent Communications
Teleglobe vs Cogent Communications
France Telecom vs Cogent Communications
Level 3 Communications vs Cogent Communications
Cogent Communications vs TeliaSonera
Sprint-Nextel vs Cogent Communications
 
And why these new ones - Cogent vs Verizon and many others...
Carol Wilson
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Carol Wilson,
User Rank: Blogger
2/19/2014 | 4:37:30 PM
Re: Talking with Cogent
Seven,

Good ideas, thanks, adding those to the list. 
brookseven
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brookseven,
User Rank: Light Sabre
2/19/2014 | 4:36:47 PM
Re: Talking with Cogent
Carol, Perhaps you can ask some load percentage questions. How unbalanced is the traffic? Also, I might look at updating pering agreements in the future to cover the assymetry up front. That way costs are known to both parties and cogent can present a good business case in the future. Seven
Carol Wilson
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Carol Wilson,
User Rank: Blogger
2/19/2014 | 4:14:10 PM
Re: Talking with Cogent
Karl,

That's exactly what I want to know. How much of this is rational business behavior (I don't want to invest where I don't earn a return on that investment) and how much of this is calculated anti-competitive behavior, and how the heck we figure out which is which.

And is it even reasonable not to invest in upgrading peer connections when the traffic seems to demand it. 
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