Netflix and Verizon Dispute Reviewed by the FCC

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Netflix and Verizon have been stuck in a dispute over video streaming speeds, which is now being reviewed by the Federal Communications Commission (FCC). Both companies have willingly agreed to the process. The FCC may also be talking to other cable companies, as well as taking in customer feedback in order to help resolved the issue. The agency has not yet passed any regulations, focusing on gathering information about the situation first.

Netflix is one of the biggest on-demand digital video streaming services available, nearing 50 million subscribers worldwide. It has signed a deal with both Verizon and Comcast to pay an extra charge in order to improve the speed of streaming videos on their networks. However, not seeing much of a change, Netflix started showing a notification to its users whenever a video was having trouble playing, stating that the Verizon network was crowded. It did not take long before Verizon sent a cease-and-desist letter, asking the video giant to take the negative message down.

Netflix’s General Counsel David Hyman responded with a lengthy letter, stating that Verizon has “mischaracterized” the message and that it was not targeting the particular ISP, and that any service provider that could not keep up with the bandwidth demands would have been treated the same. A followup speed test further revealed Verizon to perform poorly compared to other top ISPs in the United States. Netflix also explained that the whole initiative was part of their campaign for transparency. They alluded to concerns of net neutrality, claiming some ISPs, such as Verizon, are setting up virtual toll booths in order to throttle and make extra money from bandwidth they already promised.

The heated dispute between Netflix and Verizon is now being reviewed by the FCC, which is taking an unbiased stance. Tom Wheeler, the Charimanthe of the agency, stated they are “not suggesting that any company is at fault.” He explained it is necessary for the consumers to understand why the internet service they are paying for may not be delivering the content in an adequate manner. He also admitted to experiencing some of the problems himself, sharing the frustration of many of the viewers.

For now, the FCC is only gathering information and “looking under the hood” as Wheeler explained. The agency is also collecting comments and feedback from concerned consumers, taking steps to adopt a new net neutrality. Once again, Netflix was happy to embrace more transparency about the ongoing situation.

USA Today explains that, before the videos go from the ISP to a user’s computer, they first must travel through other networks and third-party distributors that contain the actual video data. Netflix has worked out a deal with a number of cable companies to move their servers directly onto the particular cable’s network, thus cutting down on the third party distributors and improving streaming speeds overall. Comcast and Verizon refused to do this until Netflix paid them a fee. However, despite the new setup, the streaming speeds did not significantly improve on the Verizon network.

The back-and-forth communication between the ISP and the video streaming giant shows that neither side is willing to budge on the issue. Having the Netflix and Verizon dispute reviewed by a separate party, such as the FCC, could help resolve the conflict. If the agency can remain as transparent as it is currently attempting to be and take in consumer feedback, this case could set a strong precedence for all net neutrality efforts in the future.

By Jakub Kasztalski

USA Today
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