After having its service blame Verizon’s crowded network for streaming difficulties for a few weeks, Netflix is now backing off. Verizon had sent them a cease and desist letter, and had been protesting loudly. But I think that’s precisely what this was all about.
Netflix has been seeking leverage in its interconnection negotiations throughout 2014. With this campaign they finally found a bit of soft underbelly. They don’t actually want to poison the well further though. They just want last mile operators to know they will if they have to.
And you can tell by Verizon’s, err, vigorous response that they hit their target. What target, you ask? It is the always contentious relationship last mile operators have with consumers is their weak spot.
It’s one thing to argue blame in front of the FCC, one army of lawyers to another with the press at least pretending to be unbiased. It’s quite another to do it in front of a jury of customers who just want their video to stop buffering and are predisposed to blame Ma Bell or Big Cable.
So Netflix backed off after what was basically a warning shot, supposedly a ‘small-scale test’ spanning a ‘few hundred thousand’ customers. Since they already have a deal in place with Verizon for paid peering that is supposedly in the process of implementation anyway, the real audience for this show was perhaps AT&T.