FCC Commissioner Spearheads Flimsy Attempt To Shame And Discredit Netflix For Its Title II Support

from the faux-outrage dept

Wed, Dec 3rd 2014 10:36am — Karl Bode

Given Netflix's rather vocal opposition to usage caps and support of Title II (pdf), the company is unsurprisingly public enemy number one for many major broadband and TV companies (and their various PR, lobbying and policy folk) at the moment. There's a pretty apparent attempt on some fronts to paint Netflix as the villain in the recent interconnection feuds, in which Netflix (and companies like Level 3 and Cogent) insist incumbent ISPs are intentionally letting interconnection points degrade to extract new fees from content and service companies.

This week, Netflix's supposed villainy was highlighted by FCC Commissioner Ajit Pai, who penned a letter (pdf) to the company complaining that Netflix had abandoned its net neutrality principles and had been hypocritically encouraging the creation of Internet "fast lanes":

"Netflix has been one of the principal advocates for subjecting Internet service providers (ISPs) to public utility regulation under Title II of the Communications Act, arguing that this step is necessary to prevent the development of so-called "fast lanes" on the Internet. "The basic argument," you have said, “is that we're big believers in the free and open Internet." For this reason, I was surprised to learn of allegations that Netflix has been working to effectively secure "fast lanes" for its own content on ISPs' networks at the expense of its competitors.

What is Pai's evidence that the company is being a hypocrite on neutrality? Exhibit A appears to be Netflix's refusal to join a new coalition called the Streaming Video Alliance, whose founding members include two of the biggest players in the cable and broadband industry: Comcast and Charter Communications. One of the group's other founding members is Frost and Sullivan analyst Dan Rayburn, who has spent much of the last year telling anyone who'll listen that incumbent ISPs with thirty years of anti-competitive behavior are just misunderstood, and it's Netflix that's to blame for most of the modern era's Internet video problems.

That Netflix didn't feel the overwhelming need to join this coalition of BFFs isn't particularly surprising.

Pai's other example of Netflix's fast lane hypocrisy appears to be simply the fact that Netflix runs its own content delivery network, Netflix Open Connect. Open Connect is a free-to-join CDN that involves ISPs hosting Netflix caching hardware on their network, something that reduces Netflix's costs, but also reduces overall ISP traffic load, improving video delivery efficiency all around. To hear Pai tell it however, Netflix's CDN is a big, bad bogeyman:

"Some have suggested that Netflix has taken these actions because the company is currently installing its own proprietary caching appliances throughout ISPs' networks as part of its Open Connect program. If ISPs were to install open caching appliances throughout their networks, all video content providers—including Netflix—could compete on a level playing field. If, however, ISPs were to install Netflix's proprietary caching appliance instead, Netflix's videos would run the equivalent of a 100-yard dash while its competitors' videos would have to run a marathon."

You might recall that AT&T, Verizon and Comcast refused to participate in Netflix's CDN, instead forcing Netflix to pay them new interconnection fees to keep streaming performance from foundering. Meanwhile, Netflix makes the company's peering locations, guidelines, hardware design and the open source software components largely open to inspection, so while you can't go build Netflix CDN hardware yourself, we're not exactly talking about state secrets. It's also worth noting that small and mid-sized ISPs (usually with much better track records on consumer issues than their larger brethren and no TV revenues to protect) have wholeheartedly supported Netflix's efforts. Dane Jasper, CEO of Sonic.net, for example called Netflix's Open Connect "brilliant." George Mitsopoulos, COO of independent ISP Ikanos/DSLExtreme, also similarly notes that Open Connect is of great benefit to ISPs.

None of this is to say Netflix is a saint. Everyone is running blindly toward the Internet video cash trough, and all of them want everyone using their preferred solutions, with meaningful transparency an ongoing problem. To be sure, Netflix's ISP rankings system is also a bit of a ham-handed attempt to name and shame ISPs that don't use its CDN (Open Connect partners unsurprisingly seeing better positioning), and the company's initial decision to restrict higher-quality "Super HD" streams to just these partners was thankfully reversed. That said, at some point you have to ask yourself based on history and experience: which do you trust more on consumer issues: Comcast or Netflix?

You also have to wonder why an FCC Commissioner that has no problems with rampant media consolidation, net neutrality violations or the lack of broadband competition is just so very concerned about such a curiously specific issue. Of all the pressing consumer issues facing the telecom and TV market (usage caps, neutrality, lack of competition, sneaky fees, cramming, etc.) Pai's greatest concern is Netflix's free, entirely voluntary content delivery network? If one didn't know any better, one might get the impression that the legacy TV industry and its loyal politicians and pundits are putting on a political dog and pony show to punish Netflix for standing up to companies with thirty years of anti-competitive behavior under their belts.

Pai Netflix (PDF)Pai Netflix (Text)

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Filed Under: ajit pai, content delivery networks, dan rayburn, favoritism, fcc, net neutrality, open internet, standards, streaming
Companies: charter communications, comcast, netflix

33 Comments

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lucidrenegade (profile), 3 Dec 2014 @ 10:51am

"FCC Commissioner Ajit Pai"

His parents should have named him Idjit. It fits.
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Anonymous Coward, 3 Dec 2014 @ 10:52am

FCC Commissioner Ajit Pai
Ajit Varadaraj Pai
Ajit Pai is a Commissioner at the FCC. He was nominated for a Republican Party position on the United States Federal Communications Commission (FCC) by President Barack Obama. He was confirmed unanimously by the United States Senate on May 7, 2012 and was sworn in on May 14, 2012 for a term that concludes on June 30, 2016.
. . . .

Career accomplishments

Between 2007 and 2011, Pai held several positions in the FCC’s Office of General Counsel, serving most prominently as Deputy General Counsel. . . .

Pai’s career outside of the FCC has spanned the private and public sectors. With respect to the private sector, Pai worked in the Washington, D.C. office of Jenner & Block LLP, where he was a Partner in the Communications Practice until being sworn in as a Commissioner. Years earlier, he served as Associate General Counsel at Verizon Communications Inc., where he handled competition matters, regulatory issues, and counseling of business units on broadband initiatives.

“Associate General Counsel at Verizon Communications Inc.”
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Anonymous Coward, 3 Dec 2014 @ 11:25am

Copyright laws come into how Netflix manages any content delivery, and Comcast making copies on behalf of Netflix could well be copyright infringement.
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DigDug, 3 Dec 2014 @ 11:29am

Re:
I either pronounce it idgit or ah-shit, either way, the guy is an incompetent corrupt politician (yes, I know, I used 3 synonyms together).
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DigDug, 3 Dec 2014 @ 11:32am

Re:
If Netflix worded it's carrier contract in such a way that any attempts to slow, redirect or throttle the traffic would be considered an unauthorized copy of the copyrighted materials, then they might have a leg to stand on in court.

That would be hilarious.
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Anonymous Coward, 3 Dec 2014 @ 11:43am

I once read a speech Pai gave to the American Legislative Exchange Council (ALEC) where he praised their work. ALEC is pure evil. Nuff said.
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Anonymous Coward, 3 Dec 2014 @ 11:46am

How long has Ajit Pai even been in networking?
Peering or CDNs are not fast lanes, have never been fast lanes and can't be fast lanes. A fast lane/slow lane is using Quality of Service to improve or degrade specific traffic.
Basically, you don't QoS a Peer or CDN, you can prefer to send traffic over a specific link or host a box inside that stops you from having to download the same content over and over again, but it's still not QoS.
What he just said means that Open-IX, Internet2, and yes even the parts of the government itself should be banned...

PS. Even with caching on VZ's network, it's still a hell of a lot faster directly connected to Tier 1 providers than at home...
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Tom, 3 Dec 2014 @ 11:50am

unneutral about neutrality
I am shocked that anyone is the slightest bit surprised by this.

Most (not all) Politicians are most commonly described as being corrupt or stupid. By extrapolation public or semipublic statements by politicians can be classified as a lie someone paid them to regurgitate (corrupt) or them talking out of their own asses (stupid).

I would bet that either a deep examination of the personal finances of FCC Commissioner Ajit Pai would yield remarkable evidence of numerous generous gifts made to his person leading up to this statement and following it OR an overall failure of understanding the core technologies he is discussing.

Also possible: little bit of A little bit of B.
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Anonymous Coward, 3 Dec 2014 @ 11:55am

Oh, Mr. Pai - what weak tea you brew. Your most damning 'fact':
[Netflix] is currently installing its own proprietary caching appliances throughout networks as part of its Open Connect program
omits the corollary - by creating its own CDN (at its own cost), Netflix frees up the 34% peak wired download traffic in North America it currently consumes, allowing that bandwidth to be used by by anyone, including its competitors.
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Anonymous Coward, 3 Dec 2014 @ 12:18pm

Maxwell's equations
Does an FCC Commissioner really need a thorough grasp of the domain he's responsible for regulating? Does such a thorough grasp include a solid grounding in the fundamentals of the field?

Put another way, should an FCC Commissioner feel comfortable with Maxwell's equations?

Certainly, you don't need a course in differential equations to pull cable, or even to configure a router, or to work the hell desk.
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John Fenderson (profile), 3 Dec 2014 @ 12:21pm

Re: Maxwell's equations
"Does an FCC Commissioner really need a thorough grasp of the domain he's responsible for regulating"

Any regulator needs a thorough enough grasp of what he's regulating so he can at least understand what is being discussed. From his statements, it appears that Pai doesn't even have that minimal level of competency.
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Karl Bode (profile), 3 Dec 2014 @ 12:28pm

Re: unneutral about neutrality
It's not shocking, no. What's consistently amazing is how well these kinds of ploys work. The newswires have been full all week of news reports that just take Pai's claims at face value and don't really offer any context:

https://news.google.com/news/story?ncl=dhGeBqxjpeh1nuMuwmVIMFNAXXukM&q=Pai+Netflix&lr=Englis h&hl=en&sa=X&ei=AHJ_VPiNMsypNuG3gugM&ved=0CCwQqgIwAA

It's little more than a coordinated smear campaign against a net neutrality supporter, yet here we are (I am) discussing it like it's a valid, well-thought out treatise.
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Karl Bode (profile), 3 Dec 2014 @ 12:29pm

Re: Re: Maxwell's equations
I get the impression he actually knows that CDNs alone aren't "fast lanes" or a valid example of Netflix's hypocrisy. I just don't think he cares.
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Anonymous Coward, 3 Dec 2014 @ 12:46pm

Re:
He's been in networking for a long time... he used to work for a little communications company called Verizon....
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John Fenderson (profile), 3 Dec 2014 @ 12:58pm

Re: Re: Re: Maxwell's equations
I suspect the same, actually, but wanted to address the point made by the commenter. Pai is either incompetent or a liar. In the end, it doesn't really matter which it is (but "liar" seems far more likely).
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Anonymous Coward, 3 Dec 2014 @ 1:07pm

About the time you think exposed corruption is going to go quiet for a while, up pops a new example to see. I have to conclude from that corruption is so rampant in government that they just can't expose more than the highlights and the rest goes uncovered.

I always used to think that some of the other smaller countries having citizens make statements that in order to get officials to do their jobs you had to bribe them. Here it works the other way.

Mr. Pai needs another job other than one that effects to some great extend all the communications in the US. No wonder we are at the stage we are in internet speeds. With government officials like this, who needs corporate cheerleaders?
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Anonymous Coward, 3 Dec 2014 @ 1:21pm

Re: Re: Maxwell's equations
Any regulator needs a thorough enough grasp of what he's regulating so he can at least understand what is being discussed.

But we're not talking just any regulator, we're talking the FCC.

So, just pulling something off the top of my head here, kinda more-or-less at random, let's say the discussion turns to nano-seconds: Should we expect an FCC commissioner to know that sometimes a 1 ns is 1 ft, and sometimes 1 ns is about 2/3 that or 8 in (roughly 20 cm)? Should we expect him not just to know that off the top of his head, but to be able explain when and why we use the different numbers?

You certainly don't need to know that to be comfortable holding a soldering iron—and heck, I know a lotta people whose soldering skills suck.
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Karl Bode (profile), 3 Dec 2014 @ 1:23pm

Re: Re:
To be fair, wonking out on the legalese of telecom policy on the lobbying side doesn't mean he actually understood networking. Though even then you'd think he could differentiate between a CDN and a "fast lane."
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Karl Bode (profile), 3 Dec 2014 @ 1:25pm

Re: Re: Re: Re: Maxwell's equations
His staffers on Twitter seem thrilled in thinking they've somehow caught net neutrality supporters in a double standard:

https://twitter.com/matthewberryfcc/status/540135260798070784
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John, 3 Dec 2014 @ 2:03pm

Future press release
1 July 2016.

Former FCC Commissioner Ajit Pai is taking up a new role with earning way more than his lowly paid FCC job. Former FCC Commissioner Ajit Pai will head negotiations with the FCC on rules that will break the thirty years of stability (anti-competitive behavior). Heading up the FCC negotiating team is former FCC Commissioner Ajit Pai's subordinate Ms Will be Leaving. Former FCC Commissioner Ajit Pai is confident he will get a fair outcome for everyone (except consumers).
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Anonymous Coward, 3 Dec 2014 @ 2:11pm

He does realize he's now a public servant and is supposed to remain neutral on these matters

this is a pretty funny speech he gave, shred it you see fit .
https://www.fcc.gov/document/commissioner-pai-remarks-internet-innovation-alliance
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Anonymous Coward, 3 Dec 2014 @ 2:12pm

Re:
*as you see fit.
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Anonymous Coward, 3 Dec 2014 @ 2:19pm

Re: Re: Re: Re: Re: Maxwell's equations
...a double standard
Obligatory xkcd: Standards.
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rapnel, 3 Dec 2014 @ 3:09pm

I'm a little confused. Is this the "then they laugh at you" step or the "then they fight you" step because.. this is some pretty funny shit.
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rapnel, 3 Dec 2014 @ 3:42pm

Re:
To clarify, it seems pretty clear which parties would rather be left to their own devices and continue to suck more and more of the money pie for doing little to nothing to earn it and which wants a piece for delivering something that your ordered and you are, supposedly, properly provisioned to receive.

The incumbents for media and delivery are fucking us dry and from several directions at that, up to and including via our political "elite" and taking our hard-earned piles directly and through taxation. They, together, are the very definition of corrupt control. And to top it all off those two or three bad assess at the top are, essentially, embedded with the ruling class in all of its manifestations.. The Beast.

So I'm guessing there are two parties that don't want Title II to happen and they are Legacy Media and Large Incumbent Delivery. No bones about it - they're trying to future fuck all of us. There's a fight brewing.
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Anonymous Coward, 3 Dec 2014 @ 5:11pm

Re: Re: Re: Re: Re: Maxwell's equations
Yeah, that feed is hi-larius in the "look at that squirrel over there!" sense.

Those FCC chaps can't be daft enough to define "open streaming video standards" as Silverlight or Flash or *shudder* HTML5, so I'm guessing they're talking about packet shaping...but WTF would that have to do with CDNs within a network?

It hurts my head to think about, so I'm going to ponder that squirrel Mr. Pai is calling an 'open caching appliance', and wonder how such a marvelous-sounding device is any different than a 'hard drive'.
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Coyne Tibbets (profile), 3 Dec 2014 @ 7:39pm

Breathless
This is an amazing accusation. I don't know which is worse: That Neflix is being accused of paying an extortionate demand from those who did create the fast lanes; or that Netflix is being accused of competing vigorously in a business environment that the FCC commissioner allowed to exist and even encouraged.
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Anonymous Coward, 3 Dec 2014 @ 10:18pm

Old sayings doesn't hold here.
Even IF Netflix is the devil, I think the old saying "Trust the devil you know" doesn't hold here... I have trusted the devils I knew (Comcast, Verizon, AT&T etc.)for far too long, and I am more than ready to trust the devil I don't know.
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Anonymous Coward, 3 Dec 2014 @ 11:38pm

Re:
Pai also ignores that fact that Comcrap and Verishit both refused to allow Netflix to do this in order to extort more money from the 'Flix.
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John Fenderson (profile), 4 Dec 2014 @ 8:55am

Re: Re: Re: Maxwell's equations
"Should we expect an FCC commissioner to know that sometimes a 1 ns is 1 ft, and sometimes 1 ns is about 2/3 that or 8 in (roughly 20 cm)?"

Unless there is a regulatory issue that involves such detailed knowledge, why would it be necessary? If some issue arises that requires that level of knowledge, then yes, I expect the commissioner would bone up on it.
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Anonymous Coward, 4 Dec 2014 @ 9:07am

Re: Re: Re: Re: Maxwell's equations

Should we expect an FCC commissioner to know that sometimes a 1 ns is 1 ft, and sometimes 1 ns is about 2/3 that or 8 in (roughly 20 cm)?
Unless there is a regulatory issue that involves such detailed knowledge, why would it be necessary?
Well, that's something that would I expect anyone who's had a formal education in the field —maybe some practical experience— to know off the top of their head. It means they did the homework. They worked the problems. They spent the time in the lab. They built something.

Because, the question, again, is whether is whether we should expect an FCC Commissioner to have a solid grounding in the fundamentals of the domain he's responsible for regulating?

If the only education that's needed is the education of a lawyer, then why can't Congress handle the job? Congress is full of lawyers.
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John Fenderson (profile), 4 Dec 2014 @ 9:57am

Re: Re: Re: Re: Re: Maxwell's equations
There's a rather large middle ground here. Managers (of anything) need to know enough about the field to be able to understand the issues in play, to be able to understand what the experts that they're managing are actually saying, etc. But they don't need to have a level of understanding so deep that they can replace the experts -- in fact, some argue very persuasively that such a level of knowledge is a drawback for someone in that position, not a benefit.
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Anonymous Coward, 4 Dec 2014 @ 10:12am

Re: Re: Re: Re: Re: Re: Maxwell's equations
...they don't need to have a level of understanding so deep that they can replace the experts...
The examples I gave are not Ph.D. level.

Certainly, an agency responsble for issues of spectrum and interference should employ some talented Ph.D.s as experts. Further, those experts may not be suitable commissioners.

But why do we need an independent commission setting policy?
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