Wall Street Journal Manages To Make The Netflix, ISP Streaming Kerfuffle Even Muddier

from the yes-I-said-kerfuffle dept

Major ISPs have slowly seen their Netflix streaming experience deteriorate over the last six months, major carriers like Comcast, Verizon and AT&T all dropping like a stone in the Netflix ISP streaming ranking index. We've discussed how, despite a bevy of well-intentioned claims, these ISPs are intentionally throttling connections for their own gains, there's still not really enough evidence to conclusively prove ISPs are up to no good here. Much of the network data just isn't publicly available, and there's an ocean of peering and CDN relationships between you, Netflix and your ISP that muddy the waters further.

That said, the Wall Street Journal this week complicated things somewhat with a report on the streaming shenanigans that offers this curious, anonymously-sourced paragraph, which suggests big ISPs are letting peering links saturate intentionally:

"Until the standoff gets resolved, the bulk of Netflix's traffic continues to flow across Internet intermediaries, including low-cost carrier Cogent Communications Group. People familiar with Cogent's and Netflix's thinking say the cable and telephone companies are delaying upgrading existing connections. Executives at major broadband providers, meanwhile, privately blame the traffic jam on Netflix's refusal to distribute its traffic more efficiently."

Again though, nobody can prove any of this because the network and peering data needed to do so is held tightly by all parties involved. Peering disputes generally involve core Internet companies agreeing to exchange equal amounts of data at hand-off points, often without compensation under confidential agreements. Historically, there have always been occasional skirmishes between companies as that balance gets out of whack. In recent years, those battles have intensified as last mile ISPs like Comcast have pushed for significantly more money to carry traffic, as we saw with the Comcast Level 3 peering fight from a few years ago.

In these disputes it has always been a goal to make the other guy look like the greedy one for leverage, though the Netflix problems have reached a new level. Netflix offers ISPs free access to their own Open Connect Content Delivery Network, which improves streaming performance. Larger ISPs have refused to join, not wanting to give what they see as a competitor to their own services (like Verizon RedBox streaming) any leg up, instead relying on their own CDNs that, theoretically, should offer equally decent performance. That those ISPs are suddenly seeing such dismal streaming performance suggests someone along the chain is being either cheap, incompetent, or is up to no good. Potentially all three.

Incumbent ISPs don't exactly have what you would call a stellar reputation for playing nice with disruptive companies or competitors, thus the theory that AT&T, Verizon and Comcast are intentionally letting these peering points saturate then pointing the finger at Netflix in the hopes of making them look bad. If that's the goal it's not working: data released this week suggests that Netflix just reached a three year high in customer satisfaction -- despite the price hike and Qwikster nonsense of a few years back. If the goal is to make Netflix look stupid, it doesn't appear to be working so far, and as the lowest rated industry in these kinds of rankings, it's probably futile for pay TV companies to try.

The whole mess is a good example of how net neutrality violations, should they occur, might not knock you over the head with their obviousness as traditional discourse has suggested. In fact, they might not even be provable. ISPs are too smart, and too wary of getting socked with new regulations. Instead, what you'll see is gatekeeper abuses dressed up under the guise of legitimate technical issues. Verizon Wireless, for example, blocked activation of Google's Nexus 7 tablet on their LTE network for six months, blaming Google and obscure technical certification issues (while selling users their own, inferior tablet in the interim). Wireless carriers also blocked Google Wallet from devices for proclaimed security reasons, while at the same time pitching their own, Isis mobile payment platform.

People were quick to cry foul in both instances. Do incumbents have a history of this sort of thing? Yes. Can you prove carriers were up to no good in either instance? No. It all makes the point that you probably could get away with net neutrality violations without regulators batting an eyelash. You just need to be a little bit clever about it -- with a dash or two of believable technical jargon for good measure. It also makes the point that with real neutrality violations inhabiting such murky territory, we're going to see a lot more people crying net neutrality wolf -- which only helps those engaged in anti-competitive shenanigans.

Filed Under: isp, net neutrality, streaming
Companies: at&t, comcast, netflix, verizon, wall street journal

Cue The Hyperbole And Hysteria: FCC Outlines Timid, Murky Plan To (Maybe) Defend Net Neutrality

from the hysterical-and-useless dept

The dysfunctional hyperbolic screaming match known as the net neutrality debate is about to be doused in napalm. The neutrality discussion has been in a holding pattern since Verizon managed to defeat the FCC's net neutrality rules in court. Despite some press commentary, the loss wasn't quite the killing blow many imagined, since the rules themselves quite intentionally didn't do all that much (no protection for wireless, plenty of loopholes allowing ISPs to blame anti-competitive behavior on network security issues or congestion), and the court ruling did state the FCC still has some authority to regulate broadband ISPs.

That left the door open to a number of FCC options. Would they appeal? Would they reclassify ISPs as common carriers to solidify and broaden FCC authority? Would they give lovely speeches substituting theatrics and show ponies for policy while doing as little as possible? Would they try to draft different rules claiming new-but-still-shaky authority under Section 706 of the Telecommunications Act? Based on what I can see, it's going to be a combination of the last two.

According to an FCC announcement today, the agency is not going to appeal the Verizon loss. Instead, they're going to slowly contemplate new rules governing broadband carriers, using shaky Section 706 authority over net neutrality issues (which many argue don't exist) to fight "improper blocking of and discrimination" of content on a "case by case" basis. The FCC has launched a public proceeding (pdf) and request for comment to determine the structure of the rules. A statement from FCC boss Tom Wheeler makes a numeric list of somewhat-ambiguous promises, then insists the FCC will keep ISP common carrier reclassification on the table:

"2. Keep Title II authority on the table. As the Court of Appeals noted, as long as Title II – with the ability to reclassify Internet access service as a telecommunications service – remains a part of the Communications Act, the Commission has the ability to utilize it if warranted. Accordingly, the Commission’s docket on Title II authority remains open."

In other words, the FCC is warning ISPs that if they don't stay on their best behavior, the FCC will take what in telecom circles is affectionately called "the nuclear option" and broaden its regulatory authority by reclassifying ISPs as common carriers. The problem is that most ISPs and analysts know the traditionally timid and politically-sensitive FCC won't do that, but the FCC apparently hopes somebody somewhere will believe the agency has the spine for such a fight. Most consumer advocates had hoped for common carrier reclassification, arguing that anything else was just uphill legal fisticuffs.

While a good portion of the FCC's announcement is political theater (we'll think about doing some stuff, someday, after lobbyists and partisans water it down to the point of uselessness), there are a few marginally-promising portions, like this bit tacked on to the end:

"6. Enhance competition. The Commission will look for opportunities to enhance Internet access competition. One obvious candidate for close examination was raised in Judge Silberman’s separate opinion, namely legal restrictions on the ability of cities and towns to offer broadband services to consumers in their communities."

Wheeler's talking about protectionist legislation that has been written by broadband ISP lobbyists, and passed in more than 20 states. Such bills generally prohibit a town or city from even voting to improve their own broadband infrastructure -- even in cases where no private ISP will. They're usually awful measures that strip away community rights to protect lumbering, uncompetitive duopolies, and many go so far as to even clamp down on public-private partnerships like Google Fiber. Granted "looking" at a problem isn't the same as fixing it, but even commenting on these awful bills is more than the FCC has done historically.

As this site as long argued, the FCC could protect neutrality by focusing on reasonable, balanced policies that increase broadband competition. What we've gotten instead is empty lip service, with a heavy focus on "digital equality," or shoring up broadband coverage gaps (safe ideas that play well politically and ISPs tolerate because it involves unaccountable subsidies and lazy government auditing). Competition and high prices are subjects the FCC refuses to seriously address (they even refuse to publicize broadband pricing data).

As for the FCC's dubious authority under Section 706 under the Telecommunications Act, it should be noted that there's a push afoot to begin "modernizing" the Act starting this year, potentially making the FCC's shaky footing even shakier. That process is expected to take several years, during which more than a little lobbying time and money will be spent on ensuring the revision erodes regulatory authority over broadband even further. As for any new FCC's new rules, they'll take a long time to craft (again), and you can expect ISP lobbyists to have a better view of the rule-making procedures than consumers or objective experts. The end result will be rules that look good but are hollow and theatrical in nature.

With the neutrality debate so toxic, a better route for the FCC would be to instead focus almost entirely on improving broadband competition to drive prices down and quality up. Unfortunately, while the FCC says all the right things about valuing competition, the agency doesn't want to rattle the slats of deep-pocketed campaign contributors like Comcast, AT&T and Verizon. As a result we get timid, murky policy that perpetuates the status quo, ultimately resulting in mediocre and expensive broadband. On the plus side, if you enjoy large numbers of people yelling at one another with few if any of them actually understanding what they're fighting about -- you're in luck!

Filed Under: fcc, isp, net neutrality, regulation
Companies: verizon