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