Thursday, June 12, 2014

Correspondence: Netflix Responds to Verizon's Legal Demands [text]

                                                              [Netflix Letterhead]                                      

Sent Via Email

June 9, 2014
Randal S. Milch
Executive Vice President - Public Policy
& General Counsel
Verizon Communications, Inc.
140 West Street, 29th Floor
New York, New York 10007

           Re: Response to Demand Letter

Dear Randy,

I am in receipt of your letter dated June 5, 2014.

Your interpretation mischaracterizes our messaging. The message you cite to in your letter
merely lets our consumers know that the Verizon network is crowded. We have determined this
by examining the difference between the speed at which the Verizon network handles Netflix
traffic at peak versus non-peak times. The messaging is part of our ongoing transparency
efforts to let consumers know their Netflix experience is being affected by congestion on their
broadband provider‘s network. We are testing this type of messaging across the U.S. with
multiple providers.

Furthermore, your attempt to shift blame for our customers’ experience on the Verizon network
“squarely to Netflix itself’ disregards Verizon's responsibility to provide its customers with the
service it has promised them. Verizon sells residential Internet access to its customers. In fact,
it is my understanding that Verizon actually upsells customers to higher speed packages based
on improved access to video services, including Netflix. Verizon's unwillingness to augment its
access ports to major Internet  backbone providers is squarely Verizon's fault. As an ISP, you
sell your customers a connection to the Internet. To ensure that these customers get the level of
service they pay you for, it is your responsibility to make sure your network, including your
interconnection points, have sufficient capacity to accommodate the data requests made by
those customers. To try to shift blame to us for performance issues arising from interconnection
congestion is like blaming drivers on a bridge for traffic jams when you’re the one who decided
to leave three lanes closed during rush hour.

As you are well aware, Netflix, for more than two years, through its Open Connect Program, has
been willing to bring the data ISP subscribers request directly to any ISP's network for free,
including Verizon. Despite our willingness to do so, you have chosen not to participate in the
Open Connect Program, but instead have allowed your network connection to Netflix to degrade


Randal S. Milch
June 9, 2014

Page 2

until we agreed to pay for augmented interconnection. We brought the data right to your
doorstep... all you had to do was open your door.

We hope that our recent agreement will soon result in a better Netflix experience for our mutual
customers. The current transparency test to which your letter relates is scheduled to end June
16 and we are evaluating rolling it out more broadly. Regardless of this specific test, we will
continue to work on ways to communicate network conditions to our consumers. We’re also
happy to work with you on ways to improve network transparency to our mutual customers.


David Hyman
General Counsel