Federal regulators are wading into Netflix’s dispute with two Internet providers about whether it should have to pay extra to broadband providers to ensure speedy video delivery to subscribers.
Federal Communications Commission Chairman Tom Wheeler said Friday that the agency has launched a review of Netflix’s disputes with Comcast Corp. and Verzion Communications Inc. in order to determine what’s happening.
“What is going on and what can the FCC do on behalf of consumers?” Wheeler said Friday at a press conference.
“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,” he said. “I have experienced these problems myself and know how exasperating it can be.”
FCC officials carefully noted that while they’re looking into the issue, they aren’t launching a formal investigation. It’s not entirely clear what the FCC could do if it did find something amiss. Wheeler told reporters that the agency could take action under its broad authority to ensure regulated companies are operating in the interest of the public.
Netfix has been complaining frequently about deals it had to cut with Comcast and Verizon to ensure its videos are streaming without difficulty to customers of those providers. Most recently, Netflix and Verizon traded jabs over a notice Netflix gave subscribers who were having buffering issues that called out the Internet provider as the reason why the video wasn’t playing properly.
The issue involves deals that companies routinely cut to move data over the middle-mile of the Internet.
Both Comcast CEO Brian Roberts and Netflix CEO Reed Hastings spoke about the dispute recently at the Code Conference.
Comcast* said that it would welcome the review, “which will allow the Commission full transparency into the entire Internet backbone ecosystem and enable full education as to how this market works.”
Verizon released a statement saying that “Internet traffic exchange has always been handled through commercial agreements.”
“We are hopeful that policy makers will recognize this fact and that the Internet will continue to be the engine of growth of the global economy,” the company said.
A Netflix spokeswoman said the company welcomes “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.”
* Comcast’s NBCUniversal unit is an investor in Revere Digital, Re/code’s parent company.