There's a new volley in the war of words over the internet congestion that is hurting the performance of Netflix streaming video: Verizon published a blog post this morning pointing out that, back in 2005, Level 3 got into a dispute with fellow internet provider Cogent over an imbalance in the way they shared traffic. Level 3's position was that Cogent needed to find a way to balance that traffic or pay for the difference. Verizon argues that this is exactly the same dispute now playing out between itself and Level 3, except this time Level 3 is the one sending too much traffic and trying to avoid paying to correct the imbalance.
When a customer requests a video from Netflix, that data moves between several companies before it arrives in their home. It begins on Netflix servers before being carried by transit companies like Level 3, which deliver it to Verizon's network, which carry it into the customer's home. Often there is another player — a content delivery network, or CDN — which sits in between the transit provider and the residential ISP, helping to cache video and optimize streaming performance.
"It was unfair for us to be subsidizing Cogent's business."
Often companies in this chain will exchange data between one another at no cost, an arrangement known as "settlement-free peering." Disputes like the one currently taking place crop up when one side overwhelms that peering ratio. As Level 3 wrote at the time, "It is important to keep in mind that traffic received by Level 3 in a peering relationship must be moved across Level 3's network at considerable expense. Simply put, this means that, without paying, Cogent was using far more of Level 3's network, far more of the time, than the reverse. Following our review, we decided that it was unfair for us to be subsidizing Cogent's business."
Fast forward to 2014 and Level 3 has peering connections with Verizon that are congested because of the large volume of data being sent by Netflix to its customers. Both sides agree that there is plenty of room on their networks, but that the current connections don't support the volume of traffic being delivered. Level 3 has argued that it would be cheap and easy to install new hardware that would open up more connections between the two companies and alleviate the congestion. Verizon has countered that it's not about the small one-time cost of the new hardware, but the ongoing cost of adding more traffic to its network, and the peering ratios the two companies had agreed upon.
"Trying to get a free ride on someone else's network"
Back in 2008 Level 3 wrote that "reasonable, balanced, and mutually beneficial agreements for the exchange of traffic do not represent a threat to the internet. They don't represent a threat to anyone other than those trying to get a free ride on someone else's network." Today Verizon is making the same case against them, but the battle appears far from over. Until companies move beyond rhetoric and agree on new peering rules — with or without government intervention — it's usually the customers who suffer.
Netflix has agreed to pay Verizon directly to handle its traffic, a move that would cut Level 3 out of the equation, and Verizon says its working to build out these new interconnections, but so far the situation hasn't improved. The Verge has reached out to Level 3 and Netflix for comment and will update with any response.