On the Internet, it's all about speed. Netflix concedes in conflict with Time Warner Cable, signing a peering deal for the benefit of its customers. This makes Time Warner Cable one of the only four internet service providers to have a paid peering agreement with Netflix.
Since Netflix already has peering deals with AT&T, Verizon and Comcast, it wasn't surprising when Time Warner Cable confirmed the direct interconnection deal it signed with Netflix. Since 2013, the streaming service has been taking on ISPs when it built its own content delivery network.
ISPs argue that Netflix delivers so much traffic at certain parts of the day that it clogs up networks. When this happens, ISPs are forced to open other connections to ease congestion, much like how supermarkets add checkout lines to prevent customer buildup.
Here are the two sides of the story: ISPs want Netflix to pay "toll" charges for causing the buildup; Netflix doesn't want to because it said it is the ISPs responsibility to keep internet traffic flowing. Even when Netflix isn't involved, a surge in traffic will still be remedied by ISPs anyway. If connections are slow, Netflix said it is not its fault but the ISPs for neglecting their responsibility to improve their networks.
Both companies make valid points but in the end, it is consumers who are caught in the middle, unable to enjoy their movies because their service providers are bickering. This was particularly felt when the ISPs decided they didn't want to play by streaming service's rules, allowing bottlenecks to persist which resulted into poor-quality streams for Netflix.
The issue has piqued the interest of the Federal Communications Commission who announced in June that it will be investigating paid peering arrangements to determine how these affect consumers and competition between affected companies.
"Consumers pay their ISP and they pay content providers like Hulu, Netflix or Amazon. Then when they don't get good service, they wonder what is going on. Consumers must get what they pay for. As the consumer's representative we need to know what is going on," said FCC Chair Tom Wheeler about the issue.
Netflix may have agreed to peering deals with the top four ISPs in the country but it has not entirely given up. It has taken the issue directly to the FCC, asking that access tolls be banned because the deals violate network neutrality.
