Netflix’s Disputes With Verizon, Comcast Under Investigation

Updated 3:03 p.m.

The Federal Communications Commission is investigating ongoing traffic disputes between Netflix and a variety of Internet Service Providers, FCC Chairman Tom Wheeler said Friday. Wheeler said in a statement that he obtained the terms of the deals that Netflix signed with Verizon and Comcast to boost its streaming speeds on their networks. The FCC is in the process of obtaining information about Netflix’s similar deals with other ISPs.

“The bottom line is that consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire, especially content they’ve also paid for,” Wheeler said in the statement.

Netflix streaming speeds have declined precipitously on several large ISPs in recent months, but no company has been willing to admit fault. Netflix blames ISPs for throttling speeds as a way to force the streaming service to pay more for its videos to get to subscribers. Many ISPs argue that content providers like Netflix have long footed the bill for transferring data across the Internet, and Netflix’s current arguments are mostly grandstanding.

Netflix has signed deals to pay both Verizon and Comcast to establish a direct connection to their networks and boost speeds, but that has not ended the controversy. Last week Netflix began blaming Verizon for long buffering times within its app. Verizon issued a cease and desist letter demanding that the message be removed, and Netflix has backed down for now.

Now, it seems, the FCC will try to determine definitively who is to blame for the slowed speeds. “We don’t know the answers and we are not suggesting that any company is at fault,” Wheeler said. “To be clear, what we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I.”

The investigation comes as the FCC is already drafting new rules for net neutrality, which would govern whether ISPs can set different Internet speeds for different types of online content. Peering deals like the ones Netflix has drafted with Verizon and Comcast were not covered under the previous net neutrality laws, which only dealt with the so-called “last mile” of the Internet that ISPs deliver into customers’ homes. But Wheeler’s statement indicates that the new rules may also encompass these peering deals that form the backbone for how data is transferred online.

In a statement, Comcast spokeswoman Sena Fitzmaurice said the company welcomes the FCC investigation. “We welcome this review which will allow the Commission full transparency into the entire Internet backbone ecosystem and enable full education as to how this market works,” she said. “We have long published our peering policies for example, and are open to discussions about further disclosures that would benefit consumers.”

The FCC published a first draft of new net neutrality rules in May and is currently seeking public comment on them until the end of July.