Netflix Asks FCC to Address Interconnection Agreement Concerns in Open Internet Rules

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By Lydia Beyoud

Sept. 16 — A Netflix Inc. representative called on the Federal Communications Commission to include review of network interconnection agreements as part of its Open Internet rulemaking process, saying that the practice of Internet service providers demanding content providers pay fees to reach end users gives rise to the same concerns as paid prioritization for “last mile” service.

“We see the point of interconnection as an extension of the net neutrality rules,” Corie Wright, Netflix's director of global public policy, said Sept. 16 during a panel discussion at the FCC.

The National Cable & Telecommunications Association has said in official filings that the FCC shouldn't extend the scope of its net neutrality rules to govern interconnection agreements, also known as peering or traffic exchange agreements, between ISPs and content distribution networks (CDNs).

Doing so could increase network congestion and saddle broadband subscribers with higher costs, NCTA said.

The FCC is gathering information to determine whether ISPs like Comcast Corp. and Verizon Communications Inc. use their positions as last-mile providers of Internet connectivity to disadvantage content providers. However, FCC Chairman Tom Wheeler said June 13 that the agency would be examining interconnection as a separate issue from the net neutrality rules.

Wheeler, at a June press conference, said the FCC isn't seeking to regulate the practice of interconnection agreements, but that it has “broad authority” to act if it finds that consumers are being harmed.

Canary in the Coal Mine

“We essentially see that point of interconnection as an extension of the last mile leverage that the net neutrality rules and policies have always sought to limit,” Wright said at the Sept. 16 discussion, adding that Netflix isn't the only CDN to be asked to pay connection fees to reach customers.

“We may be the canary in the coal mine because we're a popular service but certainly transit providers and other CDNs have raised these issues as well,” she said.

“We have been particularly vocal about our concerns about these fees but we're by no means the only folks that have endured them,” she said.

Netflix has helped lead a campaign urging the FCC to reclassify broadband Internet services under Title II of the Communications Act of 1934, a move that broadband companies and other groups strongly oppose.

Roundtables Series

Wheeler opened the first of the FCC's public roundtable forums the day after the Sept. 15 deadline for comments on the FCC's Open Internet notice of proposed rulemaking (NPRM) (GN Docket No. 14-28).

The agency received more than 3 million public comments, more than double the previous record for comments in an FCC matter—Janet Jackson's “wardrobe malfunction” during the 2004 Super Bowl.

“The reality that we always face in public policy is, ‘How do you develop a set of equities that allow everybody to work together to find the solution that works?' ” Wheeler said.

The goal of the roundtables was to explore “common solutions, not just retreat into our corners,” he said.

Nevertheless, in a day-long series of panels, representatives of consumer advocacy groups, ISPs, academics, technology companies and content providers held to their previously stated opinions on regulation under Section 706 of the 1996 Telecommunications Act or Title II of the '34 Act.

Topics ranged from the perceived risks of allowing paid prioritization deals between ISPs and content providers; whether certain types of specialized services, such as remote surgery, ought to receive network priority; and whether the FCC's rules should seek to address current market practices or be structured to incorporate future market developments.

Panelists also discussed the level of disclosure that should be required by companies under the FCC's regulatory regime; the potential application of Open Internet rules to mobile broadband; and the definition of “reasonable” network management.

The next FCC roundtable is scheduled for Sept. 19.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com