The First Net Neutrality Complaints Are Coming

At least one Internet backbone company is planning to complain to the FCC over network congestion.

National Journal
April 9, 2015, 3:01 p.m.

The Fed­er­al Com­mu­nic­a­tions Com­mis­sion may have to soon con­sider the first dis­putes un­der its new net neut­ral­ity reg­u­la­tions, start­ing with a fight over In­ter­net con­ges­tion and on­line video.

Co­gent Com­mu­nic­a­tions, which con­trols parts of the In­ter­net back­bone, is pre­par­ing to file com­plaints to the FCC, char­ging In­ter­net ser­vice pro­viders Com­cast, Time Warner Cable, AT&T, Ve­r­i­zon, and Cen­turyLink with in­ap­pro­pri­ately de­grad­ing In­ter­net traffic.

The com­plaints would mark a new phase in the long-run­ning and fiercely con­tro­ver­sial de­bate over the FCC’s In­ter­net reg­u­la­tions. Net neut­ral­ity has tra­di­tion­ally re­ferred to the prin­ciple that In­ter­net pro­viders shouldn’t block or ma­nip­u­late traffic once it’s on their net­works. But the po­ten­tial com­plaints from Co­gent would in­stead fo­cus on how those pro­viders load traffic on to their net­works in the first place.

In an in­ter­view, Co­gent CEO Dave Schaef­fer warned that if the com­pan­ies con­tin­ue to re­fuse to provide their cus­tom­ers “with ac­cess to the en­tire In­ter­net on an un­fettered basis”¦ we would have no choice but to file a com­plaint with the FCC un­der the Open In­ter­net Or­der.”

Mike Mooney, the gen­er­al coun­sel for Level 3 Com­mu­nic­a­tions, an­oth­er In­ter­net back­bone pro­vider, said his com­pany is also “cur­rently eval­u­at­ing our op­tions.”

“Level 3 is still ex­per­i­en­cing in­ter­con­nec­tion point con­ges­tion as some large con­sumer ISPs con­tin­ue to at­tempt to lever­age con­trol over ac­cess to their users to ex­tract ar­bit­rary tolls,” Mooney said in an emailed state­ment.

The com­pan­ies will be able to file their com­plaints once the rules go in­to ef­fect, which will oc­cur 60 days after they are pub­lished in the Fed­er­al Re­gister. The rules are set to be form­ally pub­lished on Monday.   

Com­cast, Time Warner Cable, AT&T, Ve­r­i­zon, and Cen­turyLink did not com­ment on the threats of leg­al ac­tion. The FCC also de­clined to com­ment.

Back­bone pro­viders like Co­gent and Level 3 trans­port data from web­sites to the In­ter­net ser­vice pro­viders, which then de­liv­er the In­ter­net con­tent to people’s homes. His­tor­ic­ally, many com­pan­ies have agreed to ex­change traffic without char­ging any fees. The idea is that both net­work op­er­at­ors be­ne­fit by freely ex­chan­ging traffic back and forth.

But the ex­pan­sion of on­line video—Net­flix in par­tic­u­lar—has thrown that equa­tion out of whack. Net­flix alone now ac­counts for about 35 per­cent of all U.S. In­ter­net traffic dur­ing peak hours, ac­cord­ing to the data ana­lyt­ics firm Sandv­ine.

The back­bone pro­viders have been try­ing to push huge amounts of traffic through con­nec­tions that were in­ten­ded for much smal­ler ex­changes. In many cases, that con­ges­tion res­ul­ted in grainy and choppy videos for cus­tom­ers. The In­ter­net ser­vice pro­viders have been de­mand­ing pay­ments to build bet­ter con­nec­tions for the traffic. 

Net­flix has now cre­ated its own con­tent de­liv­ery net­work to go around the In­ter­net back­bone com­pan­ies and de­liv­er its traffic dir­ectly to the In­ter­net pro­viders. But the biggest In­ter­net pro­viders have been de­mand­ing that Net­flix also pay for those spe­cial dir­ect con­nec­tions. Net­flix re­luct­antly agreed to the fees last year to en­sure its cus­tom­ers could stream high-qual­ity videos, but it ac­cused the pro­viders of “ex­tor­tion” and for­cing it to pay a “ransom.”

Net­flix, Co­gent, and Level 3 all lob­bied the FCC to in­clude the in­ter­con­nec­tion is­sue as part of its net neut­ral­ity rules. A Net­flix spokes­man de­clined to say wheth­er the com­pany plans to file its own com­plaints.

The FCC ul­ti­mately de­cided that in­ter­con­nec­tion is out­side the core of the reg­u­la­tions, which bar pro­viders from block­ing con­tent, throt­tling traffic, or cre­at­ing spe­cial “fast lanes” for sites that pay. In­stead, the FCC said it will handle in­ter­con­nec­tion dis­putes on a case-by-case basis. Al­though the main rules won’t ap­ply, any in­ter­con­nec­tion deals still have to be “just and reas­on­able,” the FCC said.

In the doc­u­ment ex­plain­ing the reg­u­la­tions, the FCC ac­know­ledged that it doesn’t know enough about these deals on the back-end of the In­ter­net to im­pose any bright-line rules.

“While we have more than a dec­ade’s worth of ex­per­i­ence with last-mile prac­tices, we lack a sim­il­ar depth of back­ground in the In­ter­net traffic ex­change con­text,” the com­mis­sion wrote. “Thus, we find that the best ap­proach is to watch, learn, and act as re­quired, but not in­ter­vene now, es­pe­cially not with pre­script­ive rules.”

Schaef­fer said he’s con­fid­ent that the FCC will act on his com­pany’s com­plaints if the In­ter­net ser­vice pro­viders don’t back down first. “They have an af­firm­at­ive ob­lig­a­tion to de­liv­er all of the In­ter­net all of the time at the speeds they have sold to their cus­tom­ers,” the Co­gent CEO said.

Level 3’s Mooney ar­gued that the FCC’s or­der “clearly re­quires that when broad­band pro­viders sell their cus­tom­ers ac­cess to the In­ter­net, they have an ob­lig­a­tion to make ad­equate in­ter­con­nec­tion ar­range­ments to hon­or those prom­ises.”

Matt Wood, the policy dir­ect­or of Free Press, an ad­vocacy group that fought for strong net neut­ral­ity reg­u­la­tions, said the FCC should con­sider the com­plaints based on the ex­act cir­cum­stances in each case. But, he said, the agency should take the is­sue ser­i­ously.

“This could really be just a toll, al­most like an entry fee,” he said. “It cer­tainly sounds like a prob­lem and one we’re very con­cerned about.”

Dan Ray­burn, an in­dustry ana­lyst with the firm Frost & Sul­li­van, pre­dicted that Co­gent’s com­plaints won’t go any­where at the FCC.

“The FCC is cer­tainly not go­ing to take a com­plaint ser­i­ously when the only mer­it is ‘we want free.’ I want everything free too. We all want things for free,” he said. “[Co­gent is] tak­ing steps, as all com­pan­ies do, to pro­tect their bot­tom line. But try­ing to then clas­si­fy it as a ‘net neut­ral­ity’ ar­gu­ment—that’s just disin­genu­ous.”

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