Net neutrality: Netflix says fast-lane fees to Comcast are 150% more than cost of transport

As the FCC prepares for the next round of deliberation on potential Open Internet rules, Netflix (NASDAQ: NFLX) filed another comment arguing that Internet service providers can bottleneck traffic at will, with no rules in place to stop them from doing so. Further, it pointed out that the fees it now pays to Comcast (NASDAQ: DTV) for preferred access to its last-mile network are more than what Netflix pays to get its data to the cable operator's doorstep.

"The additional access fee Comcast charges Netflix to transport data over the consumer's broadband access service is more than 150% more than all of those other costs combined--comprising over 60% of Netflix's total cost of delivering traffic to Comcast's customer," Netflix said in its Nov. 5 comments to the commission.

Those comments come amid claims from some ISPs like Verizon (NYSE: VZ) that they don't bottleneck traffic like online video streams--and have no interest in doing so.

Verizon, in a continuing series of net neutrality-related blog posts, reiterated its claim that it does not prioritize traffic on its last-mile networks. In fact, it says, ISPs aren't even interested in paid prioritization.

The Tier 1 ISP blogged a few days earlier that "Given the lack of interest by ISPs in 'paid prioritization' and the FCC's ability to prohibit it under its existing authority if it sees the need to do so, the debate over this hypothetical business model really is just a political bait and switch by interest groups intended to divert attention from the fact that they are calling on the FCC to change the rules under which the Internet has operated successfully for twenty years."

Meantime, VPN provider Golden Frog addressed Verizon's recent filing which refuted claims that Verizon was throttling a Golden Frog customer's Netflix traffic.

Verizon had told the FCC that the claim of a single customer is not evidence of widespread throttling. "Instead, the evidence cited by Golden Frog simply confirms that interconnection paths matter, and that the customer experience can be adversely affected where content providers and others do not ensure that they have interconnection capacity capable of handling the volumes of traffic that they direct to another network."

"Surprisingly, we agree with much of what Verizon says," Golden Frog replied to the filing in a Nov. 6 blog post on its site.

However, both the potential for throttling, and a demonstrated instance of a wireless broadband provider, Cricket, preventing encryption of VPN users' traffic, are issues that Golden Frog wants the FCC to address in its rulemaking.

"Encryption inhibits the ISPs abilities to inspect and shape traffic, insert ads and sell additional services," Golden Frog said. "Given their track record, we don't trust the Internet Access Providers and without clear rules at least some will be unable to resist the urge to block or interfere with technologies that inhibit their ability to make money, even if it hurts their customers' privacy."

So it appears that, as FCC's turn to determine net neutrality rules approaches, battle lines are being drawn once again between large ISPs and consumer-focused companies and advocacy groups.

For more:
- see Netflix's filing
- Golden Frog has this blog post
- Techdirt has this post
- see Verizon's blog post
- and this post

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