Netflix is dominating the subscription-based video streaming market, according to new report by the business research firm NPD Group. Netflix's market share is reportedly approaching 90 percent when compared to other services like Hulu Plus and Amazon Prime.
But something strange has been happening. People who get their Internet from Verizon have reported having trouble with Netflix. It has to do with something called “peering”. The website GigaOm explains:
Peering is essentially an arrangement between two bandwidth providers where they send and receive traffic from each other for free. The logic is that the data sent from one network to another is reciprocated. Verizon runs one of the largest last mile networks and owns the descendants of MCI. Cogent is one of the largest bandwidth providers, and its network is spread across the globe in hundreds of cities.
Cogent and Verizon peer to each other at about ten locations and they exchange traffic through several ports. These ports typically send and receive data at speeds of around 10 gigabit per second. When the ports start to fill up (usually at 50 percent of their capacity), the internet companies add more ports. In this case, through, Verizon is allowing the ports that connect to Cogent to get crammed. ”They are allowing the peer connections to degrade,” said Dave Schaeffer, chief executive officer of Cogent said in an interview. “Today some of the ports are at 100 percent capacity.”
"What is interesting is that Verizon owns a part of a competitor," says Om Malik, senior writer for GigaOm.
Om is referring to the online video rental company Redbox, of which Verizon owns a 50-percent share. He thinks the Netflix streaming issues are happening because Verizon basically wants to give its Internet subscribers a bad Netflix experience. Om says that's not right.
"I buy my broadband connection from, say, Verizon or Comcast, I give them $50 to $70 a month, and I in return expect that I can go to any place on the Internet and get any content I want without degradation of quality," he says.
Om says companies like Verizon and Comcast, which sell broadband Internet to customers, shouldn't be allowed to sell video services or email services. He's worried that without government intervention, this sort of situation may happen more and more. Until then, he says consumers don't have much recourse.