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Verizon accused of intentionally slowing Netflix video streaming

Cogent's CEO says Verizon has been slowing down its traffic on account of a recent deal with Netflix, which threatens Redbox.

In a user forum on Verizon's website, a couple users claim their Netflix instant streaming quality has been on the decline. Some claim to continue to experience problems even after contacting Verizon's customer service agents and working with them to resolve it.

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One of the most frustrating parts, as relayed by the users in the forum, is that the users didn't change anything on their devices that wouuld cause performance issues. But that doesn't mean Verizon didn't.

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A recent GigaOm report discusses Verizon's "peering" practices, which involves the exchange of traffic between two bandwidth providers. When peering with bandwidth provider Cogent starts to reach capacity, Verizon reporedly isn't adding any ports to meet the demand, Cogent CEO Dave Schaffer told GigaOm.

"They are allowing the peer connections to degrade," Schaffer told GigaOm. "Today some of the ports are at 100 percent capacity."

Schaffer went on to explain that Verizon told Cogent that it hasn't been fully accommodating its traffic because some of it stems from a video content streaming provider, whose name Verizon apparently elected not to specify. Schaffer, in his interview with GigaOm, did specify that Netflix "has become a big partner" with Cogent.

Why would Verizon intentionally disrupt Netflix video streaming for its customers? Many are pointing to the fact that Verizon owns a 50% stake in Redbox, the video rental service that contributed to the demise of Blockbuster. If anything threatens the future of Redbox, whose business model requires customers to visit its vending machines to rent and return DVDs, it's Netflix's instant streaming service, which delivers the same content directly to their screens.

The accusations are quite damning, but this isn't the first time ISPs have been accused of attempting to disrupt Netflix service in order to steal customers. 

However things progress from here - GigaOm reached out to Verizon for comment and received a highly edited declaration of Verizon's stellar customer service records - it's going to be difficult for anyone to stop Netflix. Data released last month by Sandvine estimated that Netflix accounts for 32.3% of peak-period web traffic in North America.

Redbox, meanwhile, showed signs of growth in its last quarterly report, increasing market share and raising its revenue by 1%. However, many analysts wrote this off as a last-minute spurt before Redbox suffers the same fate as Blockbuster at the hands of Netflix streaming.

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