Level 3 Communications, a major wholesale provider to content companies like Netflix (NASDAQ: NFLX), has accused five unnamed U.S. ISPs and one European ISP of abusing their market power to effectively put a limit on the amount of traffic the transit provider can route over these ISPs' last mile networks.
"Five of those congested peers are in the United States and one is in Europe," wrote Mark Taylor, vice president of Content and Media for Level 3, in a blog post. "There are none in any other part of the world. All six are large Broadband consumer networks with a dominant or exclusive market share in their local market. In countries or markets where consumers have multiple Broadband choices (like the UK) there are no congested peers."
The service provider said that by not adhering to the established peering agreements, they are degrading the customer experience for content and services that run over Level 3's network.
One issue that causes service degradation is a lack of capacity at the interconnection points where Netflix and others try to carry their traffic through the last mile provider's network. When that issue occurs, the transit provider like Level 3 will work with the last mile provider to get additional capacity by opening more ports.
Peering fights are nothing new for Level 3, which has long battled the likes of both Comcast (Nasdaq: CMCSA) and Verizon (NYSE: VZ) over this issue. A number of reports have emerged in recent months where Comcast, AT&T (NYSE: T), Verizon and Time Warner Cable (NYSE: TWC) customers have complained they were seeing quality issues whenever they streamed video services from Netflix and Amazon on their broadband connections.
Although Level 3 does not identify the ISPs, recent moves by Netflix to garner agreements with both Comcast and Verizon illustrate that these two service providers are likely part of this group. During a recent Brookings Institution panel discussion, AT&T's Chief Technology Officer John Donovan said the carrier is "in discussions with Netflix" regarding a peering arrangement.
Peering disputes aren't relegated just to Level 3. Fellow transit provider Cogent Communications told broadband service providers like Comcast, AT&T, Time Warner Cable and Verizon in March that it would help them pay to upgrade their broadband connections, for example.
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