We asked Pai’s office to provide further details and sources for the claims in the letter and received a partial response. Pai’s office provided us links to three articles describing Netflix’s refusal to join the newly formed Streaming Video Alliance, but no sources for the “fast lanes” claim or the accusation that Netflix changed its streaming protocols to prevent “open caching software” from working.
We asked whether Pai is accusing Netflix of purposely slowing its own videos down with his statement that Netflix “impedes open caching software from correctly identifying and caching Netflix traffic.” Pai’s legal advisor Nicholas Degani told Ars that “Netflix changing its protocol would only slow down Netflix traffic if an ISP installs the open protocol system and not Netflix’s.” The letter doesn’t explain why an ISP couldn’t deploy both an open caching system and Netflix’s.
The Netflix fast lanes Pai referred to seem to be the “Open Connect” video storage and caching boxes that Netflix provides to ISPs. Although Netflix doesn’t charge ISPs for this equipment, Netflix gets to reduce its costs if the ISPs host it within their own facilities. Despite the name “Open Connect,” the systems are proprietary, Pai noted. If Netflix were using a truly “open” system instead of a proprietary one, ISPs would be able to install open caching appliances that benefit all content providers, not just Netflix, Pai argued.
“Installing and maintaining these things isn’t free, so I understand that ISPs may be unwilling to incur those costs for a small startup when a deal with Netflix would solve a huge chunk of the congestion problem,” Degani told Ars.
While the biggest ISPs refused Netflix’s caching systems, smaller ISPs accepted Netflix’s storage boxes and host them at their own expense.
As an alternative to installing caching systems inside the big ISP networks, Netflix started paying months ago to get direct connections to the networks of Comcast, AT&T, Time Warner Cable, and Verizon. These interconnects improved Netflix performance while diverting Netflix traffic away from other paths into the ISP networks that had gotten congested, indirectly improving performance of other traffic that went over these links. The ISPs argued that Netflix purposely sent traffic over congested links to lower its own costs, but now that Netflix is paying for interconnection, the conflict should no longer be affecting consumers.