Netflix, Inc. Slowing Its Own Video Traffic: Verizon

Netflix, Inc. Slowing Its Own Video Traffic: Verizon

Netflix, Inc. (NASDAQ:NFLX) and Verizon Communications Inc. (NYSE:VZ) blame game over  internet “congestion” picked up on Thursday, when the latter blamed the streaming company for the slower speed. Verizon citing a probe into a complaint of a Los Angeles customer claimed that Netflix is undermining its own service by sending traffic on congested routes.

“For whatever reason (perhaps to cut costs and improve its profitability), Netflix did not make arrangements to deliver this massive amount of traffic through connections that can handle it,” a Verizon vice president, David Young, wrote in a blog post.

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War of words

The blog, further said, that Netflix is routing heavy volume of traffic to Verizon through third-party transit providers that have, “limited capacity over connections specifically to be used only for balanced traffic flows.” Verizon argues that Netflix is not sending its data to multiple transit providers, rather it is forcing large amount of data through specific channels, resulting in congestion.

However, hit back, saying, “interconnection point is controlled by ISPs like Verizon,” and the carrier’s failure in upgrading the interconnections is resulting in poor service to customers.

Netflix said that it had not “purposely select congested routes,” but an independent data takes Verizon sides. According to a study by Sandvine, Netflix was sending traffic through over-utilized routes for its data even though there were other feasible alternatives. Another review from MIT concluded that there was no issue of congestion with data moving freely across the internet and that Netflix traffic was the only one facing issue.

Is Netflix to blame?

Netflix started the heated exchange of words, previously, by accusing Verizon of network congestion and wrote same to its customers. However, the online streaming video company had to withdraw its allegations after Verizon filed a cease and desist. Netflix is one of the highest traffic senders primarily during the prime times, when the subscribers demand more videos and content.

Netflix subscribers say that they burn enough bucks every month to receive data from their ISPs at certain speed. If subscribers want to see more over Netflix, then the internet service providers should upgrade their infrastructure and offer better service. But the point here is, if Verizon pays for the infrastructure, all its customers have to bear the cost to address Netflix concerns, but if Netflix pays only its subscribers will have to bear the cost.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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  1. Why would ANYONE opt-in for slow internet speeds? This concept is totally worthy of ridicule. We (society) should be finding ways (through demand) to increase the speed of ALL internet services and that will fall to the ISPs to keep their infrastructure updated. Trying to put this only on the NETFLIX subscriber base is wussying out on resolving the real issue of the ISPs not keeping their infrastructure updated and selling speed tier services that can handle data throughput consistently.

    Who wants a cheap car that only goes 30 miles an hour? Sure you will get there eventually, but who seriously has that kind of time and patience? And what good would that EVER serve?

    I pay for a faster tier of service and I expect those speeds on a somewhat consistent basis – and so everyone else should be able to receive what they pay for in line with their expectations from their ISP.

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