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How Peering Agreements Affect Netflix, YouTube, and the Entire Internet

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The Internet is complicated. Never mind net neutrality — peering agreements can affect services like Netflix and YouTube, slowing down their traffic. Issues with peering agreements may be indistinguishable from an ISP throttling some types of traffic.

Netflix and YouTube make up a huge percentage of Internet traffic, so it’s no surprise they’d be points of contention when it comes to negotiating who carries whose traffic and who pays for it.

Internet Architecture Basics

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The Internet connects devices all over the world together. It can feel like one single network, but it’s really made up of multiple separate networks.  Different Internet service providers have to talk to each other, and this huge messy system of different smaller networks talking to larger networks makes up what we call the Internet. We covered this in more detail when we looked at who provides the Internet service to your Internet service provider.

Run a traceroute command and you’ll see your traffic being sent from your local network to your Internet service provider, on through other connecting networks, and to your destination.

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Transit vs. Peering

Most traffic doesn’t happen just on a single network, but has to be sent between networks. Different networks have to talk to each other. This can happen in two different ways — transit or peering.

Some providers have to pay for transit. The provider pays for a larger network to carry its traffic to the Internet. For example, small Internet service providers generally pay a larger network for transit so they can connect their customers to the Internet. Some of their customers’ monthly fees go towards paying the larger network to carry their traffic.

Peering is the process where two networks voluntarily agree to exchange a certain amount of traffic between each other. Picture two large Internet service providers agreeing to send traffic freely between each other. Each ISP would benefit because their customers would be able to communicate with each other.

Peering generally occurs without any money changing hands — this is “settlement-free peering.” Networks of similar size agree to carry traffic for each other for mutual benefit. There’s generally an understanding that there will be a roughly equal amount of traffic going back and forth, so each provider is doing a similar amount of work for the other.

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Netflix and YouTube Troubles

Netflix is a huge source of Internet traffic and it has caused some problems for network providers. One of the biggest public spats has been between Verizon and Cogent.

Cogent carries much Netflix content and sends it to Verizon’s network, where Verizon subscribers watch it. At one point, Netflix traffic became quite slow for Verizon subscribers. People began to wonder if Verizon was throttling Netflix traffic. They weren’t — instead, the problem was with peering.

Because of all this Netflix traffic, Cogent was sending much more traffic to Verizon than Verizon was sending to Cogent. Cogent said that Verizon was simply allowing their peering ports to fill up rather than providing additional ports so they could carry all that Netflix traffic without slowing down. Verizon fired back and said Cogent wasn’t complying with their peering agreement because the traffic was out of balance. Verizon said Cogent should have to pay for their transit rather than expect a free peering agreement. [Source]

Of course, many Internet service providers are also content providers that want you sell you their television and online video-streaming solutions. These ISPs have a vested interest in making competitors like Netflix have to pay more to send traffic.

In France, customers of Internet service provider Free.fr have had a very slow YouTube experience. Free.fr wants Google to pay for transit for all that YouTube data flowing into Free.fr’s network and to its customers. Free.fr doesn’t want to carry it for free — they want Google to pay them for the privilege. [Source]

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Peering Isn’t Subject to Net Neutrality

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Net neutrality may now be struck down and dead in the USA, but these peering disagreements have nothing to do with net neutrality. For better or worse, net neutrality has never been applied to peering. When a network wants to favor its own traffic, slow down traffic it doesn’t like, or demand websites pay it for priority traffic, that’s a violation of net neutrality.

On the other hand, when a network refuses to accept all the traffic being sent to it from another network and deliver it in a timely fashion, that isn’t a violation of net neutrality. It’s a similar situation — a service like Netflix slows down for an ISP’s customers and the ISP wants more money so the traffic will reach users — but isn’t considered a violation of net neutrality. This is just the messy way the Internet works.


If you ever see Netflix or YouTube slow down on your ISP, you may not be dealing with a violation of net neutrality. Even if we get full net neutrality, there are more Internet issues to be solved.

Image Credit: Eric Hauser on Flickr

Chris Hoffman is a technology writer and all-around computer geek. He's as at home using the Linux terminal as he is digging into the Windows registry. Connect with him on Google+.

  • Published 02/19/14

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