(Adds context, paragraph 2, changes source in last paragraph to
"a Comcast spokeswoman")
By Lisa Richwine and Marina Lopes
LOS ANGELES/NEW YORK, June 5 Verizon
Communications Inc on Thursday demanded that Netflix Inc
immediately stop displaying messages to customers that
place blame on Verizon's broadband service for slow delivery of
Netflix TV shows and movies.
The letter is the latest sign of tension between content
providers like Netflix and Internet service providers over who
should pay the price for companies that stream heavy traffic
In a cease-and-desist letter sent to Netflix, Verizon also
asked the video streaming service to provide information
including a list of customers on the Verizon network to whom
Netflix delivered the notices, or face legal action.
"Failure to provide this information may lead us to pursue
legal remedies," Verizon general counsel Randal Milch said in a
letter to Netflix general counsel David Hyman.
In mid-May, Netflix started a test of messages displayed on
the screen for some customers when a video is buffering. The
messages say that there is congestion on the network of Verizon
or another Internet service provider.
Netflix said on Thursday the test is continuing and meant to
provide customers more information about their service, similar
to a speed index that Netflix has published for months with a
ranking of Internet service providers.
"This is about consumers not getting what they paid for from
their broadband provider," Netflix spokesman Jonathan Friedland
said. "We are trying to provide more transparency, just like we
do with the ISP Speed Index, and Verizon is trying to shut down
David Young, Verizon's vice president of federal regulatory
affairs, told Reuters he felt the messages were part of a
Netflix agenda to promote its views in Washington. Netflix has
been urging the Federal Communications Commission to prevent
broadband providers such as Verizon from charging Netflix fees
for faster delivery of videos.
"That seems to be the motivation, to try to make a point or
make points in that discussion that is going on in Washington
D.C.," Young said in a phone interview, though he wouldn't
specify the issues.
In the letter, Verizon said the message's assertions were
deceptive and inaccurate and that the responsibility for slow
streaming on the site falls on Netflix.
Verizon said that in order to save money, Netflix relies on
middlemen to distribute its content knowing that some of them
have issues with congestion in some networks.
In April, Netflix said it reluctantly signed a deal to pay
fees to Verizon to bypass those middlemen and deliver content
directly to the company, ensuring faster speeds. But Verizon is
still working to implement the needed architecture and expects
to finish improvements by the end of 2014, said Young.
"I sincerely hope this is not a harbinger of things to come
in terms of how Netflix treats its partners and our mutual
customers," Milch said in the letter.
The Verizon notices came to light this week when a reporter
who was a Verizon user tweeted about them. Comcast Corp
, which also receives connection fees from Netflix, is
not aware of any reports of Netflix buffering messages to its
customers, a Comcast spokeswoman said.
(Reporting by Lisa Richwine and Marina Lopes; Additional
reporting by Ron Grover and Alina Selyukh; Editing by David
Gregorio and Jonathan Oatis)