Netflix' Paid Peering Deals with Comcast, Verizon Aren't Paying Off

By Tara Seals June 10, 2014

Just as it publishes its May data for the ISP Speed Index, Netflix has agreed to comply with Verizon Communications’ request to stop displaying messages blaming the telco for bandwidth congestion when video quality for a Netflix stream isn’t up to snuff.

Netflix noted in a blog this week that it has been conducting “small scale tests” since May for letting consumers know, while they’re watching Netflix, that their experience is degraded due to a lack of capacity into their broadband provider’s network. It’s a test that it now says will end on June 16 while the company evaluates rolling it out more broadly.

In the meantime though, Verizon sent a cease and desist letter last week demanding that it stop showing the messages, saying that its last mile connections weren’t really the culprits for the quality issues.

“Some broadband providers argue that our actions, and not theirs, are causing a degraded Netflix experience,” Netflix spokesperson Joris Evers noted. “Netflix does not purposely select congested routes. We pay some of the world’s largest transit networks to deliver Netflix video right to the front door of an ISP. Where the problem occurs is at that door –the interconnection point—when the broadband provider hasn’t provided enough capacity to accommodate the traffic their customer requested.”

The streaming giant is referring of course to the paid peering arrangements that it has inked with Comcast and Verizon in order to ensure uninterrupted service at those interconnection points.

The May information shows that, ironically, Netflix’ paid peering arrangements with Comcast and Verizon aren’t really paying off when it comes to Quality of Experience (QoE). Verizon and Comcast both slipped in the major ISP rankings in May, after signing those deals earlier this year. Verizon FiOS, a fiber-fed service, is down two slots and now ranks behind DSL providers Frontier and Windstream, at No. 10. Comcast dipped two spots as well to No. 5, while Verizon DSL is down one to No. 16, making it the worst major ISP in the U.S. for streaming speeds.

“Some large US ISPs are erecting toll booths, providing sufficient capacity for services requested by their subscribers to flow through only when those services pay the toll,” Evers said. “In this way, ISPs are double-dipping by getting both their subscribers and Internet content providers to pay for access to each other. We believe these ISP tolls are wrong because they raise costs, stifle innovation and harm consumers. ISPs should provide sufficient capacity into their network to provide consumers the broadband experience for which they pay.”

Cablevision continues to dominate as No. 1, with the average prime time stream coming in at 3.03Mbps—the only one to crack the 3.0 threshold. The average Netflix stream is about 2Mbps (the range is 256Kbps to 5.8Mbps), which, as Netflix points out, is a fraction of the bandwidth most consumers purchase from their broadband provider.

Other notable data points include the fact that Charter Communications has entered the top three ISPs.

Internationally, TekSavvy, Allstream and Rogers all climbed two spots in the Canadian rankings, with Rogers showing the biggest average speed improvement. In Latin America, Live TIM has unseated GVT as leader in Brazil, while in Costa Rica Cable Tica has taken second place from Japi, which saw its average speeds decline. And in Europe: Get has taken over the top slot from Altibox in Norway, while UPC has unseated Magnet as the top ranked ISP in Ireland. In the UK, Virgin Media took back the No. 1 slot from BT after ceding the lead in February.

Edited by Maurice Nagle

TechZone360 Contributor

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