TIME Tech Policy

Everything You Need to Know About the Netflix-Verizon Smackdown

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Netflix is once again making headlines because of a very public spat with an Internet Service Provider. This week Netflix placed a message on the buffer screen of its app blaming Verizon and its FiOS Internet service for slow streaming speeds. Verizon took offense and issued a cease-and-desist letter demanding that Netflix remove the message. Now Netflix has just a few days to prove that it was appropriate to blame the ISP, or Verizon may take legal action. This recent bickering is just the latest step in a winding saga that also involves Comcast, Google and the future of the Internet. Here’s a quick Q&A to get you up to speed on the story behind the Netflix-Verizon feud.

OK, so why exactly is Verizon mad at Netflix?

Netflix has been testing a new version of the buffering screen on its app that gives customers more specific information about why a video is loading slowly. On Tuesday a Vox Media employee spotted the new screen, which placed the blame for sluggish streaming squarely on Verizon. “The Verizon network is crowded right now,” a message on the screen reads.

 

 

It is extremely unusual for an online video company to blame a specific ISP for service problems, but Netflix says the message is an effort to “keep [its] members informed.” On Wednesday, Verizon dismissed the message as a “PR stunt.” But Thursday the telco giant issued a cease-and-desist letter to Netflix demanding it remove the accusatory language from its app. “There is no basis for Netflix to assert that issues with respect to playback of any particular video session are attributable solely to the Verizon network,” the letter reads. “As Netflix knows, there are many different factors that can affect traffic on the Internet.”

Different factors, huh? Like what?

As my colleague Sam Gustin has explained, the journey for a video from Netflix’s servers to your living room is pretty complicated. Broadband companies like Verizon and Comcast are responsible for delivering online content across the so-called “last mile” into customers’ homes. But before that happens, Internet data is typically exchanged between consumer-facing ISPs and bandwidth providers that serve as intermediaries between content companies and consumer ISPs. These deals, called peering agreements, have historically been free, but ISPs like Verizon are now demanding money to connect to their network because they are being forced to transfer lots of high-definition video from companies such as Netflix. Stalled negotiations between Verizon and bandwidth provider Cogent earlier this year caused Netflix speeds to fall significantly for Verizon customers.

But I thought Verizon and Netflix already made a deal to fix that?

They did. In April Netflix signed a paid peering agreement with Verizon to directly connect to its broadband network and bypass intermediaries such as Cogent. Netflix, it seems, is not happy with the improvements (if any) so far, so the company has decided to call Verizon out directly to consumers.

Doesn’t Netflix already have beef with some other Internet Service Provider?

Yes, Netflix is quickly becoming the Tupac of online video companies, racking up enemies right and left. In February the company signed a paid peering agreement with Comcast, which first thrust the negotiations between ISPs and content companies into the public conversation. Netflix is very unhappy that it has to pay either Verizon or Comcast to connect to their networks. As Netflix sees it, the ISPs are getting paid twice, once from customers who are promised a certain quality of Internet service per month and then again from content providers who must pay to deliver their video to consumers.

Hey, yeah! That’s not fair! Down with Verizon and Comcast!

Calm down. From the ISPs’ point of view, Netflix is doing a lot of public grandstanding to try to rewrite the rules of interconnection deals that have been around for decades. Netflix was already paying intermediaries like Cogent to deliver its content before streaming speeds slowed earlier this year. Now, the ISPs say, Netflix is trying to get its content delivered for free and force all broadband subscribers pay for the cost of delivering massive amounts of high-definition video instead of just Netflix subscribers. But some ISPs, such as Google Fiber, agree with Netflix and don’t charge companies to establish a connection to their network.

But isn’t this a violation of net neutrality, or something like that?

Not really. Net neutrality rules concern the “last mile” delivery of content into residential customers’ homes. Netflix’s fight with Verizon and Comcast centers on how content is delivered to consumer-facing ISPs and who pays for it. Netflix believes the core issue—that ISPs have the ability to charge different companies different prices to connect to their networks—means these peering issues are in the spirit of the net neutrality debate. Since the net neutrality rules are currently being rewritten, it’s possible that peering agreements could be incorporated into the new regulations. FCC Chairman Tom Wheeler has said he will look into Netflix’s paid peering complaints as the new net neutrality governance is drafted.

So are Netflix and Verizon going to court?

In its cease and desist letter, Verizon said Netflix must tell it the names of every customer who saw the accusatory message, along with proof that Verizon’s network was to blame for slow speeds, within five days. Otherwise Verizon reserves the right to pursue “legal remedies.” Netflix has so far not indicated that it plans to remove the messages blaming Verizon. A Netflix spokesman told TIME that the company is trying to provide transparency to consumers and Verizon is “trying to shut down that discussion.” But neither side actually wants a court battle, since the discovery process might dredge up communications during their negotiation process that they’d rather keep private (just ask Apple and Samsung). They’ll most likely come to a private agreement that satisfies both parties.

Screw these companies. When are my movies going to start streaming faster?

Both Netflix and Verizon have said that the streaming speeds would increase over the course of months, not days or weeks. “We are working quickly to implement the network architecture and expect improvements to be experienced across the FiOS footprint throughout 2014,” Verizon spokesman Bob Elek said in an e-mail to TIME. We’ll have a better idea of whether the paid peering deal has been effective when Netflix releases its monthly ranking of ISP streaming speeds later this month. But even if the service quality increases and the legal threats end, the rhetorical battle between Netflix and the major ISPs is likely to continue for quite a while.

Now go on and marinate on that while you watch the new season of Orange Is the Black. Hopefully, with very little buffering.

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