Foundation

There’s a lot of heat and unfortunately not enough light being produced online with respect to the recent decision by Comcast to cut off its free peering deal with Level 3, thanks to the throwing around of the name Netflix. People like Netflix and want to know what’s going on. I even have a Netflix streaming-only account. So I’ll try to explain here what’s going on, why it matters, and why we need to keep the government from intervening in favor of Level 3 and Netflix.

Firstly, I know what the question is that many will need answered: What is peering? To understand what peering is, we must first remember that the Internet is a series of networks. We all have our networks at our homes and businesses. Those networks connect to ISPs. Those ISPs then connect their networks to each other and to ‘backbone’ providers. Those backbone providers also connect to each other. The further along the chain we go, the more of the Internet’s functioning depends on those connections. Backbone providers would not have a useful service unless their networks gave access to the entire Internet.

So what the big boys do is create peering agreements with each other, where they agree to connect to each other for free, on the grounds that the data will travel both ways, benefit both sides, and create value for all involved. Firms have to be careful though to ensure that their peers are actually trading equally and fairly, creating benefit for all instead of just leeching. That is why ISPs make contracts that specify how the peerings work, and document their policies and practices of peering. Level 3 spells it out and so does Comcast.

So what happened that was the big deal?