"
Contrary to what many have been led to believe, there is currently no evidence to suggest that Comcast made an explicit decision to slow down streaming traffic; rather, the slowdown resulted from high volumes of streaming video, which congested Internet links between the video content and the users themselves."Netflix claims that they were paying for transit to Comcast customers through their transit ISPs, and that they should not be responsible for upgrading the (congested) peering links between Comcast and the transit providers. The FCC declaration went so far as to claim that Comcast was intentionally letting peering links congest (see paragraph 29 of the declaration) to force Netflix to pay for direct connectivity. (Here is precisely where the confusion with net neutrality and paid prioritization comes into play, but this is not about paid prioritization, but rather about who should pay who for connectivity. More on that later.)
"Comcast claims that Netflix was sending traffic at such high volumes as to intentionally congest the links between different transit ISPs and Comcast, essentially taking a page from Norton’s “peering playbook” and forcing Comcast and its peers (i.e., the transit providers, Cogent, Level 3, Tata, and others) to upgrade capacity one-by-one, before sending traffic down a different path, congesting that, and forcing an upgrade. Their position was that Netflix was sending more traffic through these transit providers than the transit providers could handle, and thus that Netflix or their transit providers should pay to connect to Comcast directly. Comcast also implies that certain transit providers such as Cogent are likely the source of congested paths, a claim that has been explored but not yet conclusively proved one way or the other, owing to the difficulty of locating these points of congestion (more on that in a future post).
"The best technical solution (and what ultimately happened) is that Netflix and Comcast should interconnect directly. But, who should pay for that interconnection? Should Netflix pay Comcast, since Netflix depends on reaching its subscribers, many of whom are Comcast customers? Or, should Comcast pay Netflix, since Comcast subscribers would be unhappy with poor Netflix performance? This is where market leverage comes into play: Because most consumers do not have choice in broadband Internet providers, Comcast arguably (and, empirically speaking, as well) has more market leverage: They can afford to ask Netflix to pay for that direct link—a common Internet business relationship called paid peering—because they have more market power. This is exactly what happened, and once Netflix paid Comcast for the direct peering link, congestion was relieved and performance returned to normal."
I have to suggest that the anecdote is spot on. Cui bono, and all that.