Five US Internet Providers Are Slowing Down Access Until They Get More Cash

| Educate!

If you’re the customer of a major American internet provider, you might have been noticing it’s not very reliable lately. If so, there’s a pretty good chance that a graph like this is the reason:


These graphs comes from Level 3, one of the world’s largest providers of “transit,” or long-distance internet connectivity. The graph on the left shows the level of congestion between Level 3 and a large American ISP in the Dallas area. In the middle of the night, the connection is less than half-full and everything works fine. But during peak hours, the connection is saturated. That produces the graph on the right, which shows the packet loss rate. When the loss rate is high, thousands of Dallas-area consumers are having difficulty using bandwidth-heavy applications like Netflix, Skype, or YouTube (though to be clear, Level 3 doesn’t say what specific kind of traffic was being carried over this link).

This isn’t how these graphs are supposed to look. Level 3 swaps traffic with 51 other large networks, known as peers. For 45 of those networks, the utilization graph looks more like this:


The graph on the left shows that there is enough capacity to handle demand even during peak hours.  As a result, you get the graph at the right, which shows no problems with dropped packets.

So what’s going on? Level 3 says the six bandwidth providers with congested links are all “large Broadband consumer networks with a dominant or exclusive market share in their local market.” One of them is in Europe, and the other five are in the United States.

Level 3 says its links to these customers suffer from “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.”

The basic problem is those six broadband providers want Level 3 to pay them to deliver traffic. Level 3 believes that’s unreasonable. After all, the ISPs’ own customers have already paid these ISPs to deliver the traffic to them. And the long-standing norm on the internet is that endpoint ISPs pay intermediaries, not the other way around. Level 3 notes that “in countries or markets where consumers have multiple broadband choices (like the UK) there are no congested peers.” In short, broadband providers that face serious competition don’t engage in this kind of brinksmanship.

Unfortunately, most parts of the US suffer from a severe lack of broadband competition. And the leading ISPs in some of these markets appear to view network congestion not as a technical problem to be solved so much as an opportunity to gain leverage in negotiations with other networks.

Card 13 of 17 Launch cards

Netflix has been forced to cut private deals with ISPs. Is that undermining net neutrality?

In February, Netflix agreed to pay Comcast to ensure that its videos would play smoothly for Comcast customers. The company signed a similar deal with Verizon in April. Netflix signed these deals because its customers had been experiencing declining speeds for several months beforehand. Netflix realized it would be at a competitive disadvantage if it didn’t pay for speedier service. After its payment to Comcast, Netflix’s customers experienced a 67 percent improvement in their average connection speed.

Netflix has accused Comcast of deliberately provoking the crisis by refusing to upgrade its network to accommodate Netflix traffic, leaving Netflix with little choice but to pay a “toll.” That might sound like a classic network neutrality violation. But surprisingly, leading network neutrality proposals wouldn’t affect this kind of agreement at all.

That’s because Comcast wasn’t technically offering Netflix a “fast lane” on an existing connection. Instead, Netflix paid Comcast to accept a whole new connection. The terms of these agreements, known as “peering,” have always been negotiated in an unregulated market, and network neutrality regulations don’t apply to them.

In theory, Netflix’s deal with Comcast doesn’t violate network neutrality because everyone on this new pipe (e.g. only Netflix) is treated the same, just as everyone on the old, overloaded pipe gets equal treatment. But it’s hard to see any practical difference between the kind of “fast lane” agreement network neutrality supporters have campaigned against and Netflix paying Comcast for a faster connection.

So why hasn’t interconnection been a bigger part of the network neutrality debate? Until recently, it was unheard of for a residential broadband provider like Comcast to demand payment to deliver traffic to its own customers. Traditionally, residential broadband companies would accept traffic from the largest global “backbone” networks such as Level 3 for free. So anyone could reach Comcast customers by routing their traffic through a third network. That limited Comcast’s leverage.

But recently, the negotiating position of backbone providers has weakened while the position of the largest residential ISPs — especially Comcast, Verizon, and AT&T — has gotten stronger. As a consequence, the network neutrality debate will be increasingly linked to the debate over interconnection. Refusing to upgrade a slow link to a company is functionally equivalent to configuring an Internet router to put the company’s packets in a virtual slow lane. Regulations that try to protect net neutrality without regulating the terms of interconnection are going to be increasingly ineffective.

  • Dude

    No wonder I can only watch Game of Thrones on HBO Go in low definition. Thanks, Verizon Fios!

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    What an absurd “debate”…waht a weird place is it that entertainment is somehow a “right”. who cares if people pay more or less for faster or slower service…this has been the business since it began. what a non issue…

  • Old Hickory

    It’s the FCC’s fault that there is no competition in broadband. They killed any incentive to invest in DSL networks with their unbundling regulations. Capital investment in those networks would ensure a minimum of 2 effective competitors in every market but nobody is going to spend the tens of billions when they are forced to resell to competitors at cost. So in pursuit of competition, the FCC has created an effective monopoly in many regions.

    Nobody gives a damn what they were TRYING to do. The Law of Unintended Consequences is in full effect.

  • ERSmith

    The love of money is the root of all evil.
    Treat your customers well and you will get the money anyway. Chase only the money and you lose both.

  • WeAreMany

    This is an example of what’s called a natural monopoly. It happens when you have large upfront costs for infrastructure and when redundancy is exceptionally senseless. One of the best examples is railroads. It makes no sense to have redundant broadband systems, just as it makes no sense to have 5 sets of parallel, separately owned rail tracks traversing the country. That would be an enormous waste of money and resources and the opposite of efficient. Competition in this situation is impossible because of very high upfront investment in infrastructure, just like with railroads. It’s highly unlikely that a potential competitor could afford to build their own competing network, so existing companies are likely to remain unchallenged. This inevitably produces monopolies and collusion among a small number of firms, especially when there’s only 2, as you suggest. The only solution is to have one, publicly owned system, publicly accountable, nonprofit system.

  • R. R. Roehl

    Oddly… the United States has the slowest and most expensive internet service in the world. But bad as it is, it’s still not as bad as Amerika’s vicious, capitalist-fascist health INSURANCE $ystem.

  • Justin

    Fμck YOU comcast!

  • AsleepNoMore

    Please name the five providers.

  • Tbone Agitation

    In the 80s I had to wait an hour to download one 170KB floppy disk across a modem.

    What a bunch of big babies.

  • LuJr75

    Couldn’t have said it better.

  • jcd0101

    But you have very little choice now..
    Try to find a High speed connection (greater than 40 mbps) to your home
    You have only one choice..
    Sure you can opt for a slower speed internet ..
    But not when your business and work depends upon it..

    So your screwed.. Either way your hosed..

  • Reverend Draco

    The only solution to a virtual monopoly is a literal one, eh? Yeah, that’ll work. . .

    Let me guess – you went to publik skool?

  • goatonastick

    Netflix uses whatever bandwidth is available to the consumer, it doesn’t “magically” download faster than the customer has paid for. The customer is able to download for exactly how much they have paid for, it is the ISP who cannot supply these promised speeds to its customers, because they have oversold the bandwitdth. Instead of improving their infrastructure to be able to supply the speeds it has promised everyone, it insteads asks more money from Netflix as a bribe to “keep things running smoothly”???

  • goatonastick

    It’s not a monopoly if it’s owned publicly and not by some for-profit corporation.

  • azrevasive

    Not many businesses I know require speeds capable of watching movies. Where I work, we could get by with dial up but have the LUXURY of a 10mB fiber optic connection.

  • jcd0101

    some do – but your right – it depends..
    if your an it or software or design company
    yea you need the speeds..

    But for other small business – no you could get by..

  • Tschäff Reisberg

    Are you a paid broadband provider shill? Maybe you like being ripped off by your internet provider, most of us don’t.

  • Tschäff Reisberg

    You’re right. Lets all pay for broadband and not complain unless speeds go below 1200 baud speed.

  • Reverend Draco

    If there is no competition, by law, regulation, or happenstance – it’s a monopoly.
    Monopolies are always the least efficient means by which to do business – the lack of competition relieves a monopoly of any incentive to act responsibly.

    You can make all the excuses you like – but a monopoly is a monopoly. A=A.

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  • Dan Sanders

    Not completely sure about the rules here, so I’ll be purposefully vague.

    A certain internet/radio host has said lately that they plan on breaking the internet. When it comes back online, it will be faster but it will also be smaller. One will have to use their biometric identity to log onto an internet without alternative media, without websites where one can sell their wares, and without freedom.

    I think these are the symptoms of an engineered virus that will kill the internet.

  • AsleepNoMore

    Thank you. It’s always helpful to know who we’re dealing with.

  • WeAreMany

    Monopolies are actually highly efficient. Clearly you’re not an engineer. One system is far more inefficient than several redundant systems, just like with the railroad example I used. Then again, I don’t think you read that far into my post.

  • WeAreMany

    I have a dual degree in systems engineering and economics from one the top schools in the US. That’s where I learned about “natural monopolies”, which is a real term in economics. A quick google search would have told you that. But I guess that would have taken a whole 10 seconds longer than assuming I’m stupid and making personal attacks.


    Nope I am a technologist. I also have to negotiate lots of telecom contracts from the buying end so I’m the opposite of what you are claiming when you name call me in your haze of gibbering ignorance. Also your name suggests you may come from a country where they expect things to be free. That means you expect others to work and provide what you want for free. Sorry that’s called slavery and communism. If you’re unwilling to pay for a faster highway either stay at or go but a magazine…don’t name call again troll…

  • abanikka

    Hahaha!!! Way to go there Justin!

  • abanikka

    I remember this last year when the legislation allowing them to do this went into affect. Most people weren’t even paying attention which is why it’s so easy for them to do this. Chances are there are millions of people who actually voted for politicians who followed the demands of corporate interest lobbyists. Just so happens most if not all politicians voting for the bill allowing this were Republicans. Wanna bet more than 95% of Republican supporters had no idea what they were voting for? And that is what most Americans do! Otherwise tis would have never happened. Watch, we’ll all go out and vote for those that will make our lives much more expensive and we’ll never even know it. Ignorance is something we choose to be and not born with. We have the power to change al lthis and don’t even know it. We deserve it!

  • abanikka

    But which politicians voted for the legislation allowing this? Do most of us even know what we’re voting for when we vote? This was passéd with a Republican majority

  • abanikka

    Untrue! AT&T was the largest monopoly breakup in our history and they were publically traded YEARS before it.

  • abanikka

    YOU are correct!

  • abanikka

    And there may be some REAL truth to that! Remember the average phone bill BEFORE AT&T’s breakup? It was around $15/mo. The following 2 years brought it up t an average of $60/mo.
    Not sure whom it was good for, but it sure wasn’t the people.

  • abanikka

    You go a hole in your head!

  • abanikka

    Actually, Since I’m 53 and had no internet the majority of my life. I’m about to cancel all internet service. The life I remember without it was just fine. No need for cell phone either. The public is paying WAY more for things today they THINK is necessary when it isn’t. And wages have NOT gone up enough to cover the differences. WE had WAY more spendable money back in the day than people do today.

  • Reverend Draco

    Mechanics and the Market are two different animals.

    There are machines with double and even triple redundant systems, just in case. Which is smart – you don’t want to be a half-mile under the surface of the ocean when your sole hydraulic system goes kaput

    Monopolies are, by definition, less efficient than a competitive market. . . for many reasons, the least of which is data that is missing or skewed. . . one cannot make an informed decision when crucial information is lacking or is false.
    I’d truly hate to need tomato sauce for a meal, when the sole grocery store in town runs out because they didn’t order enough, for lack of data to make an informed decision. . .much easier to jaunt across town to another store – which would be unavailable under a monopoly scenario.

    Physics, History, English, Psychology, Philosophy, Religion. . . enjoy your dual degrees. . . catch me if you can (not that I’m gonna sit around and wait, mind you – I have an Engineering degree to get).

  • melody

    Looks like it’s time for the government to nationalize ISPs in America. And judging by past governments in the USA, it looks like Americans should outsource their government to a more competent people. It seems likely that the Swedish or German governments could do better in America than either the Republitards or Democraps.

  • azrevasive

    Is that supposed to be a put down? Is one poor if one can’t afford a Tesla model S?

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  • C. D. Carney

    First off- cancel your cable and get a smart tv. Second- install a P2P downloader and a torrent downloader. Third- get free TV and free movies such as Jurassic World that I downloaded in 20 minutes and proved it wasn’t worth the $14 in theater by snatching and streaming it to the TV… All you need to do is buy 2nd tier Internet from your cable/net company and you’re in the clear. Just delete the torrent/move the file as soon as it’s downloaded and you don’t have to worry about getting busted by the feds.

  • Devedre That’s Daved Slaughter

    No thats just being greedy and greed will get you no where but broke and fast keep it up


    You realize you make no sense at all right…?

  • Fuwa Aika


  • Fuwa Aika

    LOL okay……You’re playing semantics.

  • Fuwa Aika

    Monopolies are single biggest threat to Capitalism and the Free Market.

    Doesn’t matter if they’re highly efficient. Monopolies breed Krony Capitalism. Why do you think people hate Capitalism now? It’s not because Capitalism isn’t the greatest system ever because it is. It’s because our politicians have allowed Monopolies to prosper which was never intended in our system and even Adam Smith warned against it.