There has been a back-and-forth battle in recent weeks about what is causing the internet congestion that is degrading service to Netflix consumers. Last week Verizon published a blog post that offered the first real specifics in the debate, saying that it had studied the situation closely based on a customer in Los Angeles and found that there was plenty of capacity available at different points where Netflix could deliver traffic to its network. The congestion, Verizon said, was being caused by Netflix, which had made the decision to send all its data over a limited set of very crowded routes. Today, Level 3 — which helps carry that Netflix traffic to Verizon's network in LA — fired back in a blog post of its own. It says the problem could be solved in five minutes and for a very small cost, but that Verizon is refusing to make these upgrades, because it wants to extract a fee from Level 3 instead.
In essence, Verizon's story matches up pretty well with the one being pushed by Netflix and Level 3. It's saying that Netflix traffic has overwhelmed the points of connection between the ISP and the middlemen who deliver this data for the streaming video giant. The key difference is that Verizon says Netflix could solve this problem easily by spreading its traffic over multiple transit providers. Level 3 is arguing that the best solution would be to simply upgrade Verizon's network, a process it claims to have offered to pay for.
"We could fix this congestion in about five minutes."
"We could fix this congestion in about five minutes simply by connecting up more 10Gbps ports on those routers," wrote Level 3's Mark Taylor. "[It's something] we’ve been asking Verizon to do for many, many months, and something other providers regularly do in similar circumstances. But Verizon has refused ... Maybe they can’t afford a new port card because they’ve run out — even though these cards are very cheap, just a few thousand dollars for each 10Gbps card which could support 5,000 streams or more. If that’s the case, we’ll buy one for them. Maybe they can’t afford the small piece of cable between our two ports. If that’s the case, we’ll provide it. Heck, we’ll even install it."
Netflix offered a similar line of reasoning when it asked to place its Open Connect system on the ISPs' network to help alleviate congestion. The real issue for the ISPs, however, is not the cost of the equipment, but so-called peering arrangements that specify a certain exchange of traffic back and forth between two network companies. Right now those are "settlement-free" arrangements, meaning Level 3 and Verizon don't exchange any money. Verizon won't allow new hardware to be bought and installed, even if Level 3 pays for it, because it believes allowing significantly more traffic onto its network would be an ongoing cost that it should be compensated for.
"Maybe they can’t afford a new port card because they’ve run out."
And in the end, Verizon will likely get its way. Netflix has agreed to pay it for a direct interconnect and Verizon says it will finish installing those upgrades by the end of the year. If that happens, the congestion between Level 3 and Verizon may resolve itself as well. That direct interconnect essentially mimics the installation of new router ports and wiring that Taylor suggests — so in the end, Verizon is accepting the idea that its network should be upgraded and someone else should pay. It wants that payment to come in the form of fees, however, and to handle any construction on its network itself.