New case of net neutrality. Verizon accused of intentionally slowing Netflix video streaming.

Cogent's CEO says Verizon has been slowing down its traffic on account of a recent deal with Netflix, which threatens Redbox.

By Open Source Community on Tue, 06/18/13 - 2:12pm.

In a user forum on Verizon's website, a couple users claim their Netflix instant streaming quality has been on the decline. Some claim to continue to experience problems even after contacting Verizon's customer service agents and working with them to resolve it.

One of the most frustrating parts, as relayed by the users in the forum, is that the users didn't change anything on their devices that would cause performance issues. But that doesn't mean Verizon didn't.

A recent GigaOm report discusses Verizon's "peering" practices, which involves the exchange of traffic between two bandwidth providers. When peering with bandwidth provider Cogent starts to reach capacity, Verizon reportedly isn't adding any ports to meet the demand, Cogent CEO Dave Schaffer told GigaOm.

"They are allowing the peer connections to degrade," Schaffer told GigaOm. "Today some of the ports are at 100 percent capacity."

Schaffer went on to explain that Verizon told Cogent that it hasn't been fully accommodating its traffic because some of it stems from a video content streaming provider, whose name Verizon apparently elected not to specify. Schaffer, in his interview with GigaOm, did specify that Netflix "has become a big partner" with Cogent.

Why would Verizon intentionally disrupt Netflix video streaming for its customers? Many are pointing to the fact that Verizon owns a 50% stake in Redbox, the video rental service that contributed to the demise of Blockbuster. If anything threatens the future of Redbox, whose business model requires customers to visit its vending machines to rent and return DVDs, its Netflix's instant streaming service, which delivers the same content directly to their screens.

The accusations are quite damning, but this isn't the first time ISPs have been accused of attempting to disrupt Netflix service in order to steal customers. 

However things progress from here - GigaOm reached out to Verizon for comment and received a highly edited declaration of Verizon's stellar customer service records - it's going to be difficult for anyone to stop Netflix. Data released last month by Sandvine estimated that Netflix accounts for 32.3% of peak-period web traffic in North America.

Redbox, meanwhile, showed signs of growth in its last quarterly report, increasing market share and raising its revenue by 1%. However, many analysts wrote this off as a last-minute spurt before Redbox suffers the same fate as Blockbuster at the hands of Netflix streaming.

Having problems with your Netflix? You can blame Verizon

By Om Malik and Stacey Higginbotham

Jun. 17, 2013 - 7:23 PM PDT

Summary:

Verizon is locked in a head-butting battle with Cogent Communications, a large bandwidth provider. The cause for these issues: Netflix, one of Internet’s killer applications that has been growing its share of the network. Bad news for Verizon customers: Netflix may not work as well.

If you are trying to get Netflix and use Verizon’s broadband, then there is a good chance that your video performance is less than optimal. Some Verizon customers might even go as far as calling it a crappy Netflix experience. The reason: a behind-the-scenes power play between Verizon and Cogent Communications , one of the largest bandwidth providers. The head-butting between these two companies is over an arcane concept known as peering.

Peering is essentially an arrangement between two bandwidth providers where they send and receive traffic from each other for free. The logic is that the data sent from one network to another is reciprocated. Verizon runs one of the largest last mile networks and owns the descendants of MCI. Cogent is one of the largest bandwidth providers, and its network is spread across the globe in hundreds of cities.

Cogent and Verizon peer to each other at about ten locations and they exchange traffic through several ports. These ports typically send and receive data at speeds of around 10 gigabit per second. When the ports start to fill up (usually at 50 percent of their capacity), the internet companies add more ports. In this case, through, Verizon is allowing the ports that connect to Cogent to get crammed. ”They are allowing the peer connections to degrade,” said Dave Schaffer, chief executive officer of Cogent said in an interview. “Today some of the ports are at 100 percent capacity.”

“Think of it as the on-ramp to the freeway being log-jammed,” Shaffer said. And that means your Netflix content, especially content sent by Netflix’s content delivery network, slows down, and you get pixelated pictures and buffering.

While not naming Netflix directly, Verizon has indicated to Cogent that the reason behind its actions is that Cogent is moving traffic for a large video provider. Schaffer confirmed the Netflix is one of their largest customers. “Over the past year Netflix has become a big partner for us. This is a business model problem, not an engineering problem,” Schaffer said.

Our sources tell us that Netflix recently bought 2 Terabits of bandwidth capacity in part to get around such cramming that was happening in places where it sends traffic directly to certain internet service providers.

When we called Verizon about this story asking if Verizon was having a problem with Cogent over peering issues associated with Netflix, Verizon spokesman Bill Kula said he’d get back to us. A few minutes later he sent the following reply that didn’t answer our question:

Verizon operates one of America’s lowest-latency, highest capacity networks. The various classes of Internet speeds we offer are among the fastest in the nation. Time and again, customers rate us best in class in various reports and surveys. Our customers enjoy a consistently superior Internet experience because our networks can adapt and grow with their use.

Netflix has been growing like crazy and it now accounts for a whole lot of Internet traffic — almost one out of every 3 bits (32.3 percent) sent downstream to users in North America is Netflix traffic according to Sandvine, a company that makes traffic monitoring gear for ISPs. That’s a lot of congested ports.

Netflix’s growing popularity has made it a target of ISP (internet service providers) vitriol and anger, especially those who offer competitive services. Verizon, for instance owns 50 percent of Redbox, a video-over-the-Internet service that is competitive with Netflix. Time Warner Cable and Comcast are other large providers that has allowed degradation of the online video experience on its networks — after all the logic is that as people start to have a bad Netflix experience, they start to look for alternatives — perhaps the ISP’s own pay TV offering.

This isn’t the first application last mile network operators have tried to degrade — last year the wrath of the Baby Bells and cable companies fell on Megaupload, a file sharing company started by Kim Dotcom, Schaffer said. That too was one of the big bandwidth-hungry services popular with the end customers of the ISPs — actual consumers.