Verizon threatens to sue Netflix over congestion claims

Verizon is threatening legal action if Netflix doesn't stop telling its customers that Verizon's network is to blame for the poor service quality they're experiencing when streaming movies and TV shows.

Verizon on Thursday sent a cease and desist letter to Netflix's legal counsel directing the company to stop displaying "error messages" to Verizon Fios broadband customers who experience buffering and other service quality issues when trying to watch Netflix streaming videos. And if the company doesn't comply with its demands, Verizon will "pursue legal remedies," Randal Milch, Verizon general counsel, said in his letter to Netflix.

Verizon and Netflix have been quibbling over who is to blame for Netflix streaming issues for several months. Netflix claims that Verizon and other large Internet service providers, such as Comcast, have not provided the necessary network upgrades to ensure their traffic is delivered in a suitable fashion to their video subscribers. Netflix recently compiled a report, which ranks the performance of its service across ISP networks. Verizon has scored near the bottom as have other providers, such as Comcast, which have had contentious business negotiations with Netflix over network interconnection and peering.

Verizon and Netflix did manage to sign a commercial arrangement, which the company says it agreed to only in order to improve the streaming service for its customers on the Verizon Fios network.

But inspite of this arrangement, Netflix is still accusing Verizon of causing poor performance of its service. The most recent dust-up between the two companies started early Wednesday when an image from a Netflix subscriber using Verizon's Fios broadband network was posted to Twitter. The image from Vox Media designer Yuri Victor showed a Netflix screen dsiplaying this message as a selected streaming video buffered: "The Verizon network is crowded right now. Adjusting video for smoother playback."

The image quickly went viral as various news outlets picked up the story. A Verizon spokesman called the move a "PR stunt." And said his company was investigating the claim.

Now, it looks like Verizon is ready to take action to stop the accusations, which Milch claims in his letter to David Hyman, Netflix's general counsel, are untrue and misleading to customers.

"There is no basis for Netflix to assert that issues with respect to playback of any particular video session are attributable solely to the Verizon network," he writes in the letter.

Milch explains that there are a number of factors that contribute to performance of any service on the Internet, including interconnection between multiple networks on the Internet, in-home wiring, Wi-Fi and device settings and capabilities. He also adds in his letter that data from independent sources, such as the Federal Communications Commission, shows that Verizon Fios consistently delivers network speeds that are in excess of advertised speeds.

Milch explains that Netflix itself could improve the delivery of its service by making different business decisions. Specifically, he explains that Netflix has chosen several "middlemen" to deliver its traffic to Verizon, who are known to have congestion issues on their content delivery networks. (For a more in-depth explanation of how Internet "peering" and interconnection works, check out this Ask Maggie column.)

Milch suggests that if Netflix really wanted to fix its buffering issues, it would choose partners that don't have known congestion issues, or the company would directly connect to Verizon.

"Responsibility for its customers' experience falls squarely on Netflix itself," writes Milch.

He went on to say that accusing Verizon of being solely responsible for congestion issues Netflix customers are experiencing is "self-serving, deceptive, inaccurate and an unfair business practice."

In addition, to asking Netflix to stop displaying its accusatory message to its streaming video customers, Verizon is also asking Netflix to provide evidence and documentation to back up these claims for each instance in which is has shown this message to Netflix subscribers on the Verizon Fios network.

Netflix has not said whether it will comply with the demands in Verizon's letter. Instead, Netflix maintains that the congestion issues are Verizon's problem to fix. And the company issued this statement after the cease and desist letter was received on Thursday.

"This is about consumers not getting what they paid for from their broadband provider," a Netflix spokesman said in an email to CNET. "We are trying to provide more transparency, just like we do with the Netflix ISP Speed Index, and Verizon is trying to shut down that discussion."