Now additional information suggests that Verizon and the backbone carrier Cogent are in the middle of a nasty dispute over who should pay for carrying bandwidth. We've seen this play out before between Level 3 and Comcast; that argument eventually ended with Level 3 backing down and agreeing to Comcast's terms. In this case, however, Netflix and Cogent appears more willing to stand and fight.
The issue is always the same -- Verizon/AT&T/Comcast want to be paid more money and not be subject to carrier agreements in which the companies involve agree to carry each other's traffic (typically called peering). Instead, Verizon wants to be paid an additional fee, arguing that because it carries vastly more traffic for Cogent than Cogent carries for it, it ought to be compensated for the privilege.
As Ars Technica reports, the battle between the two has deepened to the point that Verizon has reportedly installed communications hardware that would alleviate the sharp bandwidth decline over the last few months, but is refusing to activate it. Verizon, as one would expect, disputes this claim. Nonetheless, this is the company that declared war over net neutrality and successfully had the FCC's decision gutted within the last month. Under these circustances, it's scarcely surprising that Netflix's bandwidth took a nose dive.
We Need A Better Model
What disputes like this demonstrate is just how badly we need a new model for delivering content to people across America. Under the current system, subscribers pay Netflix (or their cable provider) for what they think is the right to access content. But despite the fact that you pay Time Warner, Comcast, or Verizon for the right to view content, the actual delivery of that content to your door has nothing to do with you at all.
If Comcast gets into a snit with NBC, you lose access. If Verizon and Netflix get into a battle over peerage fees, you lose access. The fact that you're a loyal customer is completely irrelevant. Paying, in this case, secures you no rights because you don't actually have an agreement with the owners of the material in question -- just the companies that have been created to serve it to you.
At no point in this chain are the rights of viewers to the content they've paid for, at a reasonable price, protected, and none of these companies take their promise to provide good service seriously. Thanks to "best effort" clauses in such contracts and the near-total lack of ISP competition across the United States, Verizon, AT&T, and the like can lock out providers like Netflix with impunity.
After all, what are you going to do? Switch providers?