FCC to strengthen oversight of ISP interconnection deals

The FCC is looking to tighten the rules regarding the interconnection terms service providers like Verizon (NYSE: VZ) ask for to accept bandwidth-hungry Web traffic from third party providers like Netflix (NASDAQ: NFLX), reports Bloomberg citing an unnamed person close to the proposal.

These agreements are not regulated by the FCC and this plan is one of the elements they have proposed as part of their new net neutrality rules that would give the regulator more oversight over the Internet. Telcos and cable operators maintain that they should have freedom on what they charge content providers for accessing their network, while Netflix and others say they should not have to pay these fees.

According to the person close to the talks at the FCC, Chairman Tom Wheeler will allow such interconnection agreements but will add a procedure that allows the regulator to review the terms and conditions.

The FCC will vote on the new net neutrality rules and the interconnection issue during its monthly meeting in February. 

By using the oversight procedure, the FCC could mandate that an Internet provider like Verizon or Comcast could stop charging what content providers deems as "unfair" fees.

Harold Feld, senior vice president of the Washington-based policy group Public Knowledge, told Bloomberg that contracts would be considered against a standard of whether they are "just and reasonable."

Verizon has argued that the proposed new net neutrality rules should not affect the interconnection deals the company strikes with third-party content providers like Netflix.

Netflix and its network capacity partner Cogent Communications have accused Comcast (NASDAQ: CMCSA) and Verizon of degrading the flow of their traffic to their end users. Verizon countered that its network was not congested.

Later, Netflix signed separate interconnection agreements with Verizon and AT&T to deliver better streaming performance across the Internet service provider's network. Netflix in February also agreed to pay Comcast millions of dollars annually for more-direct connections that ensure improved speed and reliability for its video service.

For more:
- Bloomberg has this article

Related articles:
AT&T, Verizon challenge FCC's authority on net neutrality
Verizon says net neutrality should not touch interconnection arrangements
Verizon tells FCC to address blocking and paid prioritization without Title II reclassification
Verizon's Shammo clarifies remarks about net neutrality impact on company's investment strategy

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