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FCC to Probe Web-Traffic Disputes Among Netflix, Comcast

The U.S. Federal Communications Commission will look into Internet-traffic disputes among Comcast Corp. (CMCSA), Netflix Inc. (NFLX) and Verizon Communications Inc. (VZ), the panel’s chairman said today.

“We are looking under the hood,” Tom Wheeler said at the agency’s monthly meeting in Washington. “Consumers want transparency. They want answers. And so do I. We don’t know the answers and we are not suggesting that any company is at fault.”

Broadband providers and Netflix, an online movie and TV company, are arguing over how traffic is routed from the time it leaves Netflix servers to when it reaches viewers’ homes.

FCC staff has received traffic-exchange agreements between Comcast and Netflix and Verizon and Netflix, Wheeler said.

He quoted an e-mail sent to the agency by a person identified only as George as saying: “Is Verizon abusing net neutrality and causing Netflix picture quality to be degraded by ‘throttling’ transmission speeds? Who is at fault here? The consumer is the one suffering!”

Wheeler said FCC officials don’t know the answers.

“Internet traffic exchange has always been handled through commercial agreements,” Ed McFadden, a Verizon spokesman, said in an e-mail. “This has worked well for the Internet ecosystem and consumers. We are hopeful that policy makers will recognize this fact.”

‘More Transparency’

Netflix previously agreed to pay Comcast and Verizon so viewers can get faster speeds.

“We welcome the FCC’s efforts to bring more transparency in this area,” Joris Evers, a Netflix spokesman, said in an e-mail. “Americans deserve to get the speed and quality of Internet access they pay for.”

Netflix has said in its monthly ISP Speed Index that broadband providers adopting its Open Connect direct-delivery service to manage the flow of content consistently offer the best customer experience. Verizon and Comcast are not Open Connect partners, the company has said.

“We welcome the chairman’s attention to these important issues,” Sena Fitzmaurice, a Comcast spokeswoman, said in an e-mail. “All actors across the system have a shared responsibility to preserve the smooth functioning and highly competitive backbone interconnection market.”

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net Elizabeth Wasserman, Romaine Bostick

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