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Streaming Wars?

19 Feb, 2014 By: Erik Gruenwedel

Netflix reportedly is blaming select ISPs of impeding broadband speeds required to deliver its content to subscribers

A worst case scenario from the recent appeals court’s decision striking down the federal government’s net neutrality rules could be coming true as Netflix reportedly is at odds with select ISPs regarding how they send and receive (or share) network traffic (called “peering”).

When Netflix released its monthly ISP speed rankings, notable among the results was the fact that average prime-time speeds in January dropped as much 14% for Verizon (FiOS and DSL), and slightly less so for Comcast, AT&T U-verse and Mediacom compared to the same period last year. Broadband speeds for Time Warner Cable, Bright House, Windstream, Centurylink and Clearwire increased.

The slower the ISP speed, the more frequently streams of movie or TV show episodes are interrupted by spinning wheels as the bit rates required attempt to materialize.

In fact, average ISP speeds for Comcast and Verizon FiOS have fallen 30% and 19%, respectively, since October — well before a U.S. District Court of Appeals for the District of Columbia Jan. 14 ruled for plaintiff Verizon and against the Federal Communications Commission’s efforts to afford Internet traffic equal status — a policy known as net neutrality.

Netflix over the years has encouraged ISPs to use its free Open Connect network, but Comcast, Verizon, Time Warner Cable and AT&T U-verse have declined, preferring the subscription streaming pioneer pay them to deliver its video content, according to The Wall Street Journal, which cited sources familiar with the situation.

There currently exist myriad bandwidth networks, including Cogent Communications, which subcontracts with Netflix to accommodate its burgeoning bandwidth needs. Last summer, Cogent CEO Dave Schaeffer alleged Verizon, with whom it had a peering arrangement, wasn’t sharing the load of Netflix’s bandwidth requirements.

“They are allowing the peer connections to degrade,” Schaeffer told GigaOm. “Today some of the [peering] ports are at 100% capacity.”

Verizon, at the time, issued a statement saying it operates one of the highest-capacity networks capable of accommodating burgeoning bandwidth needs.

“The various classes of Internet speeds we offer are among the fastest in the nation,” Verizon said. “Time and again, customers rate us best in class in various reports and surveys. Our customers enjoy a consistently superior Internet experience because [of] our networks.”

Meanwhile, Comcast and Verizon have separately upped efforts to establish over-the-top video platforms, including Xfinity Streampix and Redbox Instant, respectively. And Comcast just agreed to pay $45.2 billion to acquire Time Warner Cable — an acquisition that would help the No. 1 & 2 cablers rival Netflix in domestic subscribers.

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