Netflix and AT&T have apparently made an interconnection pact, following the same path as we have seen over the past two quarters with Comcast and Verizon. Perhaps this time will be a little less acrimonious, as the two plan to have the necessary connections in place ‘over the coming days’.
This year the relatively sedate topic of paid peering has taken on a rare, very public persona. Last mile operators have chafed against Netflix’s video content as the OTT provider builds out its own CDN infrastructure. Interconnection speeds have fallen and the blame has been cast all over the place.
Caught in the middle of the increasingly caustic dispute have been the IP transit backbones Netflix has used to reach customers when no peering agreement was in place. Connections have gone without upgrades, streaming has buffered, and tempers have frayed. While they have been working through the same issues, Netflix and AT&T have done so a bit less dramatically than we saw with Verizon and Comcast.
The FCC has been taking a look at the whole peering/transit ecosystem, however I seriously doubt they will do anything other than quietly warn everyone not to make them intervene. Now that Netflix has most of the bigger interconnection deals in place, it is possible that peering and interconnection will receded back into the shadows where such relationships usually live.
There can be little doubt that the balance of power in interconnection has shifted to the last mile. But perhaps we’ve also seen the limits of that power, or at least the basis upon which it can be challenged by the content world. Netflix’s public agitation for free interconnects for all may have been nonsensical, but a little sunlight goes a long way.