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Netflix to stop posting notices that irked Verizon

By Michael Liedtke

Associated Press

Published: Monday, June 9 2014 3:57 p.m. MDT

This July 20, 2010 file photo shows a Netflix customer turns on Netflix in Palo Alto, Calif.

Paul Sakuma, Associated Press

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SAN FRANCISCO — Netflix will ease up a finger-pointing campaign that blamed Verizon and other Internet service providers for problems with its video subscription service.

The decision, announced in a Monday blog post, follows a legal threat issued by Verizon last week.

In a June 5 letter, Verizon threatened to sue Netflix Inc. unless the company stopped sending messages that made Verizon's Internet service look bad.

Netflix has been posting notices to some subscribers that say congestion on networks operated by Verizon and other Internet service providers is hurting video quality.

The notices are part of a "small-scale test" that will end June 16, according to a Monday post on Netflix's blog.

The test lasted about a month and spanned a "few hundred thousand" customers, said Netflix spokesman Joris Evers. About 36 million U.S. subscribers pay $8 to $12 per month for the service.

Netflix may send unflattering messages across an even bigger swath of subscribers if video-quality problems persist.

New York-based Verizon Communications Inc. declined to comment on the latest development in the feud between Netflix and some of the nation's largest Internet service providers. In last week's letter, Verizon had given Netflix until Tuesday to provide proof of its derogatory claims about Verizon's service.

Netflix contends that companies such as Verizon and Comcast aren't doing enough to deliver the content that their subscribers want. In many cases, subscribers to high-speed Internet services are trying to stream Netflix videos, which generate about one-third of online traffic in the U.S. during evening hours.

The inadequacies of the Internet services often caused glitches in online video streams, according to Netflix. But Verizon, Comcast and others trace the video problems to the way that Netflix has chosen to deliver some of its content through intermediaries.

Netflix struck deals earlier this year to connect directly into the networks of Verizon and Comcast for an undisclosed amount. Those partnerships haven't placated Netflix, which is trying to convince government regulators that it and other online services shouldn't be forced to pay Internet providers to ensure their content reaches Web surfers.

Since the company agreed to work with Comcast, Netflix's video has been streaming at higher speeds, according to Netflix's own monthly breakdowns. Netflix said its video transmitted at an average of 2.72 megabits per second in May, up 80 percent from January, before the traffic deal.

But Los Gatos, California-based Netflix said that the average streaming speed of its video on Verizon's FIOS service declined slightly from April to May, the first month that the companies worked together.

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