FCC Probes Internet Traffic Slowdowns -- Update

By Dow Jones Business News, 

By Gautham Nagesh

Federal regulators plan to get to the bottom of why consumers aren't always able to watch Netflix and other streaming video services over their home broadband connections.

Federal Communications Commission Chairman Tom Wheeler announced Friday that the agency has begun an inquiry into the issue of peering, which concerns how residential broadband providers like Comcast and Verizon interconnect with the networks of major content providers like Netflix and Google on the back end.

"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," Mr. Wheeler told reporters. "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."

Netflix has feuded publicly with Verizon in recent weeks over consumers' ability to stream high-definition movies and TV shows like "Orange Is the New Black." The dispute over who is to blame for delays and choppy delivery of video has continued even though Netflix struck paid peering deals with both Verizon and Comcast earlier this year to delivery its traffic more efficiently.

The nation's largest broadband provider, Comcast, welcomed the FCC's new probe of peering. Comcast has previously argued that its deal with Netflix proves the commercial market is capable of settling peering disputes without regulatory intervention.

"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," Comcast spokeswoman Sena Fitzmaurice said in a statement. "We also agree that the broadband consumer should be the focus of this inquiry and not any particularly business model."

Said a Netflix spokesman: "We welcome the FCC's efforts to bring more transparency in this area. Americans deserve to get the speed and quality of Internet access they pay for."

Mr. Wheeler said many of the over 19,000 comments the FCC has received in response to its net-neutrality rules have concerned the disputes between Netflix and Verizon/Comcast, and have asked what the FCC can do to resolve the problem. Mr. Wheeler reiterated that he considers net neutrality a separate issue from peering.

"I have experienced these problems myself. I know how exasperating it can be. Consumers must get what they pay for," Mr. Wheeler said.

The FCC staff is currently obtaining information needed to determine precisely what is causing the congestion between broadband providers and content networks. Mr. Wheeler said the FCC has already received the agreements between Netflix and Comcast/Verizon, but he also plans to request them from other broadband providers and content companies, such as YouTube.

Senate Judiciary Chairman Patrick Leahy (D., Vt.) also welcomed the announcement, arguing that the recent interconnection disputes show that "net neutrality rules alone may no longer be enough to promote an open Internet."

"Shining more light on how content is delivered across the backbone of the Internet is an important step in ensuring that consumers receive the service they are paying for," Sen. Leahy said.

Shalini Ramachandran contributed to this article.

Write to Gautham Nagesh at gautham.nagesh@wsj.com

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This article appears in: Technology

Referenced Stocks: CMCSA , CMCSK , GOOG , GOOGL , NFLX

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