(Rewrites throughout with background)
By Alina Selyukh and Marina Lopes
WASHINGTON, June 13 U.S. regulators will review
agreements between Netflix, Verizon, Comcast and other content
and Internet providers to figure out whether they are causing
slow web download speeds for some consumers, especially for
streaming video content.
Consumers have complained to the Federal Communications
Commission about the ongoing spat between Netflix and Internet
service providers (ISPs). Both sides accuse each other of
causing a slowdown in Internet speeds by the way they route
"At the heart of this is whether ISPs that provide
connectivity in the final mile to the home can advantage or
disadvantage content providers, and therefore advantage or
disadvantage consumers," FCC Chairman Tom Wheeler said on
Large content providers such as Netflix Inc have
historically paid middlemen or ISPs to deliver their content to
consumers. The specifics of such agreements, known as
"interconnection" and sometimes "peering," have been secret and
outside of the FCC's regulatory scope.
The FCC earlier this year launched a new effort to set rules
regulating how broadband providers manage Internet traffic on
their networks. Netflix has urged the agency to begin regulating
such agreements to do away with fees that content companies pay.
Though the FCC has not indicated that it plans to regulate
the deals, the agency is now asking multiple Internet service
providers and content companies, particularly video service
providers, to provide details, Wheeler said.
"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," he told reporters after a monthly FCC meeting.
"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," he said.
In an earlier statement Wheeler said the commission is "not
suggesting that any company is at fault."
Consumer advocates, who support stricter regulatory
oversight of relationships between content and Internet
providers, welcomed the step and called on the FCC to make
details of those agreements public.
It is unclear whether the FCC plans to do so.
Analysts pegged the FCC's move as a win for Netflix, which
on Friday welcomed the move toward more transparency.
"Americans deserve to get the speed and quality of Internet
access they pay for," Netflix spokesman Joris Evers said in a
Netflix earlier this year agreed to pay fees to Verizon
Communications and Comcast to bypass middlemen
and deliver content directly to the companies' subscribers,
ensuring faster speeds.
"Netflix has been paying (for traffic delivery) since
inception. It wants free, I get it, but someone has to pay for
it," Jim Cicconi, AT&T Inc senior executive vice president
for external and legislative affairs, said earlier this week.
Netflix streaming accounts for nearly one-third of North
American web traffic during peak times, according to research by
Netflix vice president for global public policy, Christopher
Libertelli, this week said the company already invests money in
delivering traffic to the Internet provider.
"We pay a lot of money to drop content at the doorstep of an
ISP. All we're really asking is for the ISPs to swing the door
open," Libertelli said at the Aspen Institute think tank. "This
has become a new choke point."
The FCC has regulated "net neutrality" only on the part of
the network that goes from the Internet service providers to the
consumer, and has not delved into what happens before that. The
agency's proposed net neutrality rules keep that distinction.
Comcast, Verizon and AT&T welcomed the FCC's review on
Friday. Internet providers pointed out that traffic exchange
fees have long been negotiated through commercial agreements and
said they hoped the review would focus on consumers and not a
particular business model.
(Reporting By Marina Lopes and Alina Selykh in Washington and
Lisa Richwine in Los Angeles; Editing by Ros Krasny and Chris