I agree, the fact that they are selling asymmetric internet plans should show that they're clearly aware that the average internet user pulls down far more data than they upload, but (according the Verizon) Netflix's asymmetric traffic is a complete surprise and a burden so Netflix should also pay Verizon for the additional asymmetric traffic being requested by Verizon's customers (who already paid for it).

It's not "additional" traffic if it is within the limits that the Verizon customer paid for (which they did). Verizon just sold something they weren't willing to provide.

I agree to an extent. But there's a point at which Level3 stops becoming a peer and starts becoming a subscriber. That point is somewhere between equal utilization of Verizon's peering point and (near) total upstream into Verizon's network, just as any Verizon subscriber would have. Where is that point?

I'm a Verizon subscriber and I get apoplectic when Netflix stutters, because I know exactly what's happening. But I also don't know what's the exact right model for peering points, and I think net settlement might be a better model.

> I agree to an extent. But there's a point at which Level3 stops becoming a peer and starts becoming a subscriber. That point is somewhere between equal utilization of Verizon's peering point and (near) total upstream into Verizon's network, just as any Verizon subscriber would have. Where is that point?

That's not true. I pay Verizon $X/mo to deliver the internet to me. And most of what I want delivered at 100mbps is netflix. Now instead of Verizon taking the millions (billions?) in revenue and building out what we're paying for, they're trying to charge netflix (for what they already charged me).

I have a website I host from home. Am I entitled to free FIOS because someone else on FIOS wants to access it? That's the question. It gets confused in the peering issue. And settlement free peering is important, even essential to how the internet works. And the FCC should absolutely preserve it.

But the real question here is, is this a peering relationship anymore. And Verizon has a legitimate argument that it is not based on the sustained differences in traffic flows. I don't know what the answer is to this problem, but I'm not convinced by either Level3/Netflix or Verizon.

Personally, if I ran Verizon, I'd be meshing with Google/Netflix/Amazon's networks as much as possible. But I'm not, oh well.

> And Verizon has a legitimate argument that it is not based on the sustained differences in traffic flows

Verizon and comcast have been selling asymmetrical residential links since always. Verizon is advertising 500/100 on their homepage right now. They know damn well that people are pulling way more data than they're pushing, and the interconnect links from level3-to-ISP have always been hugely asymmetrical.

> Am I entitled to free FIOS because someone else on FIOS wants to access it?

That would be up to the arrangement you have with your internet provider.

Netflix isn't a Verizon subscriber. Netflix is what Verizon subscribers pay to access.

The problem is that Verizon has apparently been successful in spinning the story that peering between Verizon and Level3 is supposed to be balanced. As others have already said in these comments, that doesn't make a lick of sense. Peering between backbone providers should be roughly balanced, but Verizon isn't acting as a backbone provider, they're acting as a residential provider, and there's no way peering with Verizon will ever be balanced. That's a fundamental consequence of the asymmetric plans Verizon sells and the fact that their customers are expected to download significantly more than they upload. This means that Verizon will absolutely be receiving a lot more traffic into their network than they send out.

Basically, I doubt Verizon actually has balanced traffic with any other provider, except perhaps other residential providers. But they're only making a stink about Level3 because they're trying to use this claim to double-bill.

Note again, Verizon made the intentional choice to service the residential market, and to sell asymmetric plans. They knew going into all of this that they wouldn't have balanced traffic with providers like Level3. And that's perfectly fine, because the only reason they're receiving this much traffic is because their paying customers are requesting it. Verizon has already been paid to receive this incoming traffic.

Also, and this is something I haven't seen anyone really address, balanced peering agreements between backbone providers is typically meant to prevent one provider from routing traffic through a second provider's network, destined for a third last-mile provider. In that scenario, the second provider doesn't gain anything from the traffic, and hasn't been paid for it. That's why the balanced peering agreement exists, to ensure that no provider gets taken advantage of that way; if you one provider wants to route traffic through another provider's network, they have to be prepared to receive just as much traffic.

But that argument doesn't apply to last-mile providers. The traffic isn't being routed through their network to a third destination. The traffic is being delivered to the network because that's it's destination. If the traffic was unsolicited (for example, a DoS), then it's reasonable for the last-mile provider to try to charge the sender for it. But if the traffic was explicitly requested, which is generally the case (and certainly is for Netflix), then the last-mile provider has no justification for charging the traffic sender. The traffic has already been paid for, by the subscriber who requested the traffic.

You make a much better point than I've seen here. Verizon acting both as a backbone and as an ISP. This creates an internal conflict between those businesses.

Just keep in mind that you have already paid Verizon to provide you with "up to X Mbps" of internet. And they theoretically should make a good faith effort to provide you with that amount.

What's happening here is that they are not making the good-faith effort. They want to get paid for the transit from Level3 onto their network and from their network to your front door.

The thing is according to basically all precedent of how the internet works when you pay for internet you're (theoretically) paying for all costs Verizon incurs while providing that service to you.

If they're trying to bill someone else for entry into their network while billing you for the exit then you should be getting a discount to the tune of however much that service provider is paying. But you're not. Which is why people are getting all up in arms.

EDIT:

> Level3 stops becoming a peer and starts becoming a subscriber

Yes, that point is when Level3 is DOWNLOADING more data FROM Verizon customers than UPLOADING to them.

Verizon charges their customers every month for plans where they download more than they upload.

As it stands Verizon customers are downloading 3x as much data FROM Level3 and Level3 is downloading from Verizon.

So by that logic, Verizon should be a Level3 customer and pay Level3 for any imbalances.

To your edit: No, my theory was that, when the businesses aren't servicing each other, as in a mutual transit scenario, then one getting a benefit at the expense of the other is unfair.

Honestly, it's a case of externalities, so we're not going to see much improvement until government either takes over peering or last mile.

I don't think that either is benefitting at the expense of the other. Netflix pays for huge amounts of bandwidth to all the residential ISPs where their customers are located. Verizon customers pay for huge amounts of aggregate bandwidth to Netflix and everywhere else on the internet. If there is more download traffic on Verizon's network than there is upload traffic it's only because that's all Verizon allows their customers to do. Contractually. They sell asymmetric plans. The results are not surprising.

I think Verizon has an internal struggle. They are both a transit provider and an end-user isp. I think their transit role, which made this deal with Level3 for settlement-free peering, and its ISP role, which made deals with end users for high bandwidth, are fighting each other. We'll see if that plays out.

But the only player providing transit here is L3. Verizon is not - it is simply delivering to its customers what their customers has bought.

Waaaait, at that point Verizon stops being a peer and starts becoming a subscriber, since they have a bunch of consumers that don't host valuable content within Verizon, but want access to content outside of Verizon.

If that's not a settlement-free peering agreement because of the disbalance, then Verizon should be the one paying part of their users subscription fees to the rest of the internet backbone.