The one thing Netflix and Verizon can agree on when it comes to the open Internet


HANDOUT IMAGE: CEO of Netflix Reed Hastings talks with press on the red carpet at the Google/Netflix White House Correspondent's Weekend Party at United States Institute of Peace in Washington, D.C. on May 2, 2014. (Photo by Tony Powell)

If you've been following the debate about net neutrality, you know that federal regulators have proposed some pretty controversial rules for the Web. These proposed regulations mainly deal with the so-called "last mile" — the connection between your house and your Internet provider, like Verizon or Comcast.

But the Internet is a much bigger place than just the last mile. It's a network of networks, and keeping the Internet usable depends a lot on how all of those networks operate. You may recall that Netflix agreed to pay Comcast and Verizon for faster streaming to consumers because its download speeds were tanking. That deal technically took place in the backbone, a part of the Internet most people never come into contact with since it's not part of the last mile. Yet, as anyone who tried to log onto the video service last year discovered, what happens in the backbone can have powerful effects on consumers.

So should the same openness rules for last-mile connections also apply to the network relationships — also known as "interconnection" — between companies in other parts of the Internet?

Not according to the  Federal Communications Commission. The FCC views the two as entirely different issues, and the agency's net neutrality proposal reflects that. If the FCC someday develops a policy on connections outside the last mile at all, it'll be done separately from net neutrality. Net neutrality is technically about how an ISP routes data over its own network to households; interconnection is about the business relationships that get traffic to the ISP's network.


(Washington Post)

Surprisingly, there's a lot more agreement on this issue than you might think between companies like Netflix and Verizon. Even though the two firms advocate different policies, in some ways both believe that the government should treat the backbone like it treats the last mile.

A top Verizon executive recently made this argument on C-SPAN, saying the whole debate about Internet fast lanes is a red herring when we already allow payments for better performance in the backbone.

(RELATED: Verizon responds to Netflix’s passive-aggressive error message with straight-up aggression)

"The fact is, content does get delivered to consumers at different speeds," said Craig Silliman, Verizon's senior vice president for public policy. "There's an entire part of the ecosystem — the content distribution networks — whose entire business model is dedicated to getting certain companies' content to customers faster than others."

Here's what Silliman is really saying, in plain English: There are companies out there, such as Cogent and Level 3, that make money by taking Netflix traffic and delivering it to the doorsteps of Comcast, Verizon and others. These are paid commercial arrangements already in place that everyone accepts. So what's all the fuss about fast lanes? We've already got them. Why does the FCC insist on treating different stretches of the Internet differently?

Netflix uses much the same logic, but to make the opposite point: If the FCC believes the last mile should be kept free of ISP interference, the same should hold true for the backbone, where Verizon is extracting payments from Netflix. Netflix told the Post that more than 99 percent of its interconnection agreements involve no money.

"Comcast and Verizon are literally in the less-than-1-percent group," wrote spokesman Joris Evers in an e-mail.

In a blog post in March, chief executive Reed Hastings said the company needs net neutrality to ensure that broadband providers stop trying to charge for interconnection in the backbone.

"Without strong net neutrality," Hastings wrote, "big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service."

Some telecom analysts, such as the Information Technology and Innovation Foundation's Doug Brake, argue that Hasting's blog post misleadingly conflates what goes on in the Internet's backbone with what takes place in the last mile, "importing the charged politics of net neutrality into the business relationships of interconnection." Netflix stands to gain, Brake argues, if it can convince regulators to view the two distinct issues as one.

Netflix and Verizon may have radically divergent objectives. But they're strange bedfellows in that they both view interconnection through a similar lens.

Brian Fung covers technology for The Washington Post.
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