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FCC to Scrutinize 'Peering Deals'

13 Jun, 2014 By: Erik Gruenwedel

Netflix’s proactive complaints regarding smoother streaming deals with Comcast and Verizon convince federal government to ‘check under the hood’

Netflix once again proves that the squeaky wheel gets the grease.

For months co-founder and CEO Reed Hastings has spearheaded a well-organized public campaign lamenting separate agreements the subscription streaming pioneer ironed out with Comcast and Verizon ensuring their Netflix subcribers get the fastest possible streaming speeds.

While Netflix apparently sought out the peering agreements, it also considers them an avoidable (with government regulation) cost of doing business in an ecosystem whereby Internet traffic into homes is disproportionately controlled by a few ISPs.

Tom Wheeler, chairman of the Federal Communications Commission, June 13 agreed to analyze and find out further details surrounding the controversial “direct peering” deals.

“For some time now we have been talking about protecting Internet consumers. At the heart of this is whether Internet Service Providers (ISPs) that provide connectivity in the final mile to the home can advantage or disadvantage content providers, and therefore advantage or disadvantage consumers,” Wheeler said in a statement.

Interestingly, Wheeler’s desire to learn more about peering and its effect on net neutrality comes a month after he advocated a motion that could pave the way for priority streaming deals between ISPs and content providers for the last mile into subscriber homes.

While not casting aspersions on ISPs or third-party services, Wheeler said he was motivated to act after receiving myriad emails, including one from “George,” who lamented that the ultimate loser in the battle between ISPs and third-party services was the public.

“Consumers must get what they pay for. As the consumer’s representative we need to know what is going on. I have therefore directed the commission staff to obtain the information we need to understand precisely what is happening in order to understand whether consumers are being harmed,” Wheeler said.

The chairman said he has received details from the peering agreements between Netflix, Verizon and Comcast, and is in the process of obtaining others.

“To be clear, what we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I,” Wheeler said.

Meanwhile, Netflix this week agreed to stop emailing subscribers blaming their fluctuating streaming speeds on ISPs. The move came after Verizon threatened legal action.

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