Netflix, Not AT&T or Verizon, Throttles Speeds Over Networks

For the last five years, Netflix has been throttling speed of its service to AT&T and Verizon subscribers so they would not exceed mobile data caps and incur extra charges that could discourage viewing on mobile devices. After T-Mobile’s chief executive noted that AT&T and Verizon customers were watching Netflix at slower speeds, the two carriers were initially blamed, but denied the charges. Net neutrality rules prevent wireless carriers from throttling the speed, but those rules appear not to apply to content companies.

The Wall Street Journal reports that Netflix has been capping its streams at 600 kilobits-per-second, “much slower than what should be possible on modern wireless networks.” Watching two hours of HD video, says Netflix, would eat up six gigabytes of data, an entire month’s worth under an $80/month Verizon plan. AT&T and Verizon are the top U.S. mobile carriers, accounting for three-quarters of the country’s wireless subscribers.

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Netflix says it doesn’t throttle video to T-Mobile and Sprint subscribers because “historically those two companies have had more consumer-friendly policies.” Those two carriers “usually slow their network connections, rather than charge overage fees.”

Sandvine, a networking company that tracks Internet usage, reports that over Wi-Fi and other wired broadband connections, Netflix accounts for 37 percent of all downstream Internet data traffic in North America during peak periods. But, on mobile networks during peak periods, the ninth-ranked Netflix only makes up 3.4 percent of all downstream mobile data traffic. In comparison, YouTube, the No. 1 user, clocks in at 20 percent.

“We’re outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent,” said AT&T executive Jim Cicconi, a sentiment echoed by Verizon executives. For its part, Netflix has “railed against the idea that it should compensate broadband providers or mobile carriers for the amount of data that its customers eat up,” and has quickly singled out carriers it believes discriminates in applying data caps.

The company now says it’s working on a mobile “data saver,” due to debut in May, that will allow consumers to “stream more video under a smaller data plan, or increase their video quality if they have a higher data plan.”