Level 3 accuses five unnamed US ISPs of abusing their market power in peering

Level 3 Communications, a company that provides bandwidth for a wide variety of customers trying to get content from point A to point B on the internet, just accused five U.S. ISPs and one European ISP of using their market power to interfere with how traffic flows from Level 3 onto the ISPs’ last-mile network. The result is that customers of those ISPs experience degraded quality for services going over Level 3’s network.

This is a so-called peering problem. The topic has been in the news since early this year, when consumers began complaining about the quality of their Netflix(s NFLX), Hulu and Amazon(s AMZN) Instant Video streams on networks like Comcast(s CMCSA), AT&T(s T), Verizon(s VZ) and Time Warner Cable(s TWC). The issue is that at the interconnection points where Netflix traffic attempts to enter the last-mile ISP’s network, there isn’t enough capacity. Usually, when that happens, the transit provider or the content provider negotiate to add more capacity by opening up more ports. (I explain the process in this story.)

However, in recent months Level 3, Netflix and Cogent have all gone public accusing some ISPs of keeping those ports congested while trying to charge above-market rates for direct interconnection. Netflix has signed such a direct interconnection agreement with both Comcast and Verizon. But it isn’t happy about it and accuses the ISPs of abusing their market power to extract payments from content companies trying to serve the last mile.

In covering this issue, I’ve argued that the FCC needs to get data on these peering agreements and practices before we can prove that there’s a problem. It’s clear there is consumer harm, but what’s unclear is whether ISPs are actively blocking traffic, or hurting specific providers. It’s also unclear if ISPs are charging abusive rates to get direct interconnection agreements.

These peering agreements are deeply held secrets, which means the FCC will have to force providers to disclose the terms of their agreements and what traffic looks like on their networks. By sharing some of its network details, Level 3 is offering us a transparency strip tease, giving us (and the FCC) a glimpse of the data it has without naming names.

From the Level 3 post:

“The average utilization across all those interconnected ports is 36 perfect. So you might be asking — what is all the fuss about with peering?…Well, our peers fall into two broad categories; global or regional Internet Services providers like Level 3…and Broadband consumer networks like AT&T. If I use that distinction as a filter to look at congested ports, the story looks very different.

A port that is on average utilized at 90 percent will be saturated, dropping packets, for several hours a day. We have congested ports saturated to those levels with 12 of our 51 peers. Six of those 12 have a single congested port, and we are both (Level 3 and our peer) in the process of making upgrades — this is business as usual and happens occasionally as traffic swings around the Internet as customers change providers.

That leaves the remaining six peers with congestion on almost all of the interconnect ports between us. Congestion that is permanent, has been in place for well over a year and where our peer refuses to augment capacity. They are deliberately harming the service they deliver to their paying customers. They are not allowing us to fulfill the requests their customers make for content.

Five of those congested peers are in the United States and one is in Europe. 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.”

I’d love to see Cogent, Google and other providers release their data next, so even if the FCC doesn’t want to pursue this, a growing cry of consumer outrage could push the agency to do something about a very real and difficult problem that’s crippling access to video content on 5 U.S. broadband networks. Level 3 didn’t name names, but based on the deals Netflix has signed and the complaints it has made about AT&T, I’m confident that AT&T, Verizon and Comcast are among the five.