FCC Investigating Netflix, ISP Streaming Deals

The content streaming deals Netflix struck with Comcast and Verizon has finally caught the eye of the Federal Communication Commission. Chairman Tom Wheeler said the Commission will be looking into the peering deals after receiving complaints about their repercussions from Netflix and consumers.

FCC looks into content streaming deals between ISPs and content providersFCC looks into content streaming deals between ISPs and content providers

He said Netflix's disputes with Verizon and Comcast over alleged network bandwidth throttling have highlighted some of the issues surrounding Net Neutrality such as whether or not Internet service providers should be allowed to charge content providers for better bandwidth to subscribers. The FCC has been giving the appearance of leaning in favor of allowing ISPs to charge companies to guarantee quality bandwidth, while at the same time blocking the practice of throttling back bandwidth for content from content providers who aren't paying extra.

"For some time now we have been talking about protecting Internet customers. At the heart of this is whether Internet Service Providers (ISPs) that provide connectivity in the final mile to the home can advantage or disadvantage content providers, and therefore advantage or disadvantage consumers," Mr. Wheeler said in a statement. "What we call the Open Internet rule on which we are currently seeking comment is one component of this."

By charging to guarantee the bandwidth needed to stream video and other content, companies like Comcast and Verizon that control the final stretch to customer's homes could effectively throttle bandwidth to create a poor experience for their customers. Netflix claims that's exactly the position it encountered, forcing it into a position where it has to pay or face dealing with angry customers complaining about poor video quality.

The back and forth between ISPs and content providers over Net Neutrality has led to public accusations of throttling with Netflix going so far as to displaying messages for customers blaming Verizon for throttling video streams. Netflix has since backed off, but its actions show how volatile the topic has become.

To overcome the poor video quality issues Comcast customers experienced, Netflix signed a deal with the ISP and has done the same with Verizon. The FCC didn't give content providers or consumers much hope for a happy ending to the situation, although the Commission has since warmed up some to the idea of enforcing Net Neutrality guidelines on ISPs.

The FCC has already received the peering agreements Netflix signed with Comcast and Verizon, and will have similar contracts from other companies soon. With those in hand, plus comments from businesses and the public, the FCC will evaluate the situation and decide what course of action to take -- if any.

Mr. Wheeler said,

Consumers pay their ISP and they pay content providers like Hulu, Netflix or Amazon. Then when they don’t get good service they wonder what is going on. I have experienced these problems myself and know how exasperating it can be. Consumers must get what they pay for.

While collecting the data the FCC is asking for is a good sign, it doesn't mean there will be any changes that benefit consumers. Right now, the FCC is in fact gathering mode and will determine later whether or not any regulatory action needs to be taken.

For now, companies will have to strike content delivery deals with ISPs just as Netflix has done and hope the FCC prohibits ISPs from the practice later on.