Back in March of 2014, Netflix CEO Reed Hastings wrote a blog post accusing the major internet service providers of imposing unfair tolls on companies, like his, that were sending large volumes of traffic to their customers. He argued that companies like Comcast and AT&T were creating an artificial bottleneck that was degrading Netflix service, causing customers' video to bugger. Hastings called on the FCC to expand the definition of net neutrality to cover this little-known world of "interconnection" between networks.
The FCC has radically changed course
Today, the FCC did just that. "For the first time the commission would have authority to hear complaints and take appropriate enforcement action if necessary, if it determines the interconnection activities of ISPs are not just and reasonable, thus allowing it to address issues that may arise in the exchange of traffic between mass-market broadband providers and edge providers."
This is actually a fairly radical departure from the way the FCC has operated in the past, and even from its own statements last year. In April, an FCC spokesperson told National Journal, "Peering and interconnection are not under consideration in the Open Internet proceeding, but we are monitoring the issues involved to see if any action is needed in any other context."
So what changed? Companies like Netflix — along with the companies that carry their traffic, like Cogent and Level 3 — have been making their case with blog posts on the web and closed door meetings in Washington DC. Of course so have the ISPs. In the court of public opinion, however, it was clear who was winning. Netflix's complaint became the central data point in a long segment by John Oliver that went viral. Peering and interconnection make the average person glaze over, but "Cable industry fuckery" is something the masses can rally against. Commenters responded in such numbers that the FCC website crashed.
Cable industry fuckery is something the masses can rally against
The FCC doesn't go into any detail about what it will do with its new authority around interconnection, and this expansion of powers will no doubt be challenged in court. On today's press call, senior FCC officials said that they would handle interconnection complaints on a case-by-case basis, and the new proposal allows "reasonable network management," a term which the ISPs have already been using to justify congestion at interconnection points.
"A handful of ISPs opted to hold our members hostage until we paid up."
But advocates for expanded net neutrality hailed the decision as a victory. "The commission initially stated they [net neutrality and interconnection] were different. But as they studied the issue, I think they realized ISPs were using them to thwart the intent of the commission," said Dave Schaeffer, the CEO of Cogent Communications. "Interconnection is critical to meet the objectives of an open and free internet the FCC and President Obama laid out."
Netflix has already agreed to pay the major ISPs for direct interconnection. But following today's proposal, it sounds like they are eager to renegotiate. "We support the commission asserting jurisdiction over interconnection and implementing a case-by-case process that prevents ISPs from charging unfair and unreasonable tolls," Netflix said in a statement emailed to The Verge. "If such an oversight process had been in place last year, we certainly would've used it when a handful of ISPs opted to hold our members hostage until we paid up."