Jon Brodkin

When Netflix agreed to pay Comcast for a direct connection to the ISP's network, video performance improved immediately. Verizon subscribers aren't so lucky.

Although Netflix and Verizon confirmed on April 28 that they had struck a paid peering deal, performance continued to drop in May and could remain poor for months while the companies upgrade infrastructure.

"Verizon FiOS is down two slots and now ranks behind DSL providers Frontier and Windstream," Netflix wrote after releasing its monthly speed index.

In the US, Netflix performance on Verizon FiOS dropped from 1.99Mbps in April to 1.90Mbps in May, and performance on Verizon DSL dropped from 1.08Mbps to 1.05Mbps. This is the average performance of all Netflix streams on each ISP's network. The drops are small, but they show that the paid peering deal didn't make any immediate impact.

In April 2008, Verizon signed a franchise agreement in which it promised the New York City Department of Information Technology and Telecommunications (DoITT) that it would build its "state-of-the-art fiber-optic network throughout the entire City by mid-year 2014."

The June 30, 2014 deadline is about to pass without Verizon meeting the requirement. The company is blaming Hurricane Sandy from October 2012 -- even though Verizon was still claiming to be "ahead of schedule" in April 2013.

AT&T recently named 100 municipalities in 21 metropolitan areas where it might bring its fiber-to-the-home network, without actually saying how many customers would get the GigaPower service, which offers up to 1Gbps download speeds.

AT&T said the expansion "is not expected to impact AT&T’s capital investment plans for 2014," further muddying the picture.

That fiber announcement came a few weeks before AT&T announced a deal to buy satellite provider DirecTV for $48.5 billion. Yet it seems the two are intertwined: AT&T told the Securities and Exchange Commission that it needs approval of the DirecTV merger in order to bring fiber to 2 million locations.

"The economics of this transaction will allow the combined company to upgrade 2 million additional locations to high speed broadband with GigaPower FTTP (fiber to the premise) and expand our high speed broadband footprint to an additional 13 million locations where AT&T will be able to offer a pay TV and high speed broadband bundle," AT&T wrote in an SEC filing.

The expansions would happen within by 2018, AT&T said, as combining the companies will let AT&T gain "cost synergies" of more than $1.6 billion a year by 2017. The savings would largely be due to lower programming costs from increasing AT&T's size and bargaining power.

Verizon and the rest of the country's biggest Internet service providers joined forces to argue that so-called "common carrier" regulations for utilities shouldn't be applied to broadband.

Such rules would force the Internet service providers (ISPs) to innovate less and spend less money than they do today on network upgrades, they argue. Yet Verizon obtains a variety of perks from the government for its FiOS Internet service by using public utility rules to its advantage, a new report drawing on public documents says.

“It's the secret that's been hiding in plain sight,” said Harold Feld, senior VP of Public Knowledge and an expert on the Federal Communications Commission and telecommunications. “At the exact moment that these guys are complaining about how awful Title II is, they are trying to enjoy all the privileges of Title II on the regulated side.”

“There's nothing illegal about it,” said Feld, who wasn’t involved in writing the report. However, “as a political point this is very useful.” Bruce Kushnick, telecommunications analyst, points to a New Jersey franchise agreement which states, "The construction of Verizon NJ’s fiber-to-the-premises FTTP network (the FTTP network) is being performed under the authority of Title II of the Communications Act of 1934 and under the appropriate state telecommunications authority granted to Verizon NJ."

The network interconnection deals between content providers and Internet service providers (ISPs) are often shrouded in secrecy, at least when it comes to the question of whether any money is changing hands. But it's possible to figure out which companies are directly exchanging traffic with ISPs by examining publicly available information if you know where to search.

Analyst Dan Rayburn shows which ISPs the likes of Google, Amazon, Facebook, Microsoft, Netflix, Pandora, eBay, and Apple have direct connections with. The connections are "public information that anyone can look up simply by knowing the networks' Autonomous System number (AS) and looking at their peers," Rayburn wrote. "You don’t have to be a networking engineer to look at BGP [Border Gateway Protocol] relationships and see what is taking place. It’s all public info."

It's long been rumored that Apple is building its own content delivery network (CDN), and now it appears that the company is negotiating paid interconnection deals with "some of the largest ISPs in the US" in order to deliver Apple content to consumers.

Dan Rayburn, an analyst with extensive contacts in the CDN and Internet service provider industries, reported on Apple's latest moves.

"In February I blogged about a new group formed inside of Apple in 2013, tasked with building out their own CDN to deliver Apple software updates, apps and other Apple related content," Rayburn wrote. "Since my post, Apple has been very busy with their build-out deploying a lot of boxes running Apache Traffic Server and buying a ton of transit, co-location, wavelengths and other infrastructure services. Their CDN is quickly growing, and it won’t be long before we start seeing a portion of their content getting delivered from their new CDN."

According to Rayburn, "Microsoft, Google, Facebook, Pandora, EBay, and other content owners that have already built out their own CDNs" are also paying ISPs for interconnection.

Comcast and Time Warner Cable are the most hated companies in each of the three "triple play" markets where they operate, according to an American Customer Satisfaction Index (ACSI) report being released.

The two cable companies, which are attempting to merge, ranked second-to-last and last in the Internet service market as well as the subscription TV and fixed-line telephone service markets, the ACSI found. Comcast and TWC also fared poorly in 2013 but cemented their places at the bottom in 2014 by dropping significantly in customer satisfaction.

"Time Warner Cable lags behind the entire industry following its second consecutive yearly decline, down seven percent to an all-time low of 56 [on the ACSI's 100-point scale]," the ACSI report said. "The combination of low and downward-trending customer satisfaction for both Comcast and Time Warner Cable is cause for concern amid merger talks between the two companies. The issue at stake is not that the proposed merger will limit competition, as the service territories of the two companies do not overlap. Instead, it is the question of whether a combination of two pay-TV providers with such poor records could possibly create a better customer experience, especially given the volume of evidence from ACSI data suggesting that mergers in service industries tend to damage satisfaction -- at least in the short term."

Moreover, they're the worst-rated companies in the most hated industries. The ACSI averages the results of its customer interviews to create indexes for more than 40 industries. Subscription TV service and Internet service ranked last, and fixed telephone service was in the bottom 10 along with health insurance.

Wi-Fi equipment based on the new 802.11ac standard -- often called Gigabit Wi-Fi -- has been on the market for nearly two years. These products offer greater bandwidth and other improvements over gear based on the older 802.11n specification, but they don’t implement one of the most impressive features of 11ac.

It was simply too complicated to deploy all the upgrades at once, hardware makers say. As a result, 11ac networks actually waste a lot of capacity when serving devices like smartphones and tablets. This shortcoming should be fixed with new networking equipment and upgrades to end-user devices.

Once everything is in place, Wi-Fi networks will be better able to serve lots of devices at once, particularly the mobile devices that every single person in the US seemingly has in his or her hands every minute of the day. The soon-to-be-deployed technology is called MU-MIMO (multi-user, multiple-input and multiple-output), which is like a wireless "switch" that sends different data to different receivers at the same time.

It's powered by multi-user beamforming, an improvement over the single-user beamforming found in first-generation 11ac products. MU-MIMO will let wireless access points send data streams of up to 433Mbps to at least three users simultaneously, for a total of 1.3Gbps or more. Large-scale Wi-Fi deployments could include hundreds of access points sending signals to thousands of devices.

As such, they have to efficiently handle roaming and coordinate channel assignment, all while doing it automatically without forcing IT shops to do extra configuration. These features are what “make large-scale Wi-Fi feel like the Wi-Fi in your home,” Gast said.

Comcast is now competing against content delivery networks (CDNs) such as Akamai with a new service that can improve delivery of video to Comcast subscribers in exchange for payment.

"This new offering allows content owners to go directly to the ISP and have their content stored and delivered via the last mile, thereby displacing some traffic currently delivered by third-party CDNs like Akamai and Limelight Networks," well-connected industry analyst Dan Rayburn reported. "While this is the same type of CDN service that other commercial CDNs like Akamai already offer, Comcast can offer a very good SLA since they are a last mile provider."

The service will let Web content companies "bypass network middlemen and deliver their services directly to Comcast Internet customers," The Information article said. Despite making an argument that it would be allowed to offer “paid prioritization,” Comcast has said it doesn't intend to offer fast lanes. And the new CDN service is not a fast lane, Rayburn told Ars.

AT&T offered to follow the Federal Communications Commission's old network neutrality rules for three years if the government approves its acquisition of DirecTV.

Even though the FCC's 2010 Open Internet Order was largely overturned by a federal appeals court, AT&T said its merger with DirecTV would come with a "continued commitment for three years after closing to the FCC's Open Internet protections established in 2010, irrespective of whether the FCC re-establishes such protections for other industry participants following the DC Circuit Court of Appeals vacating those rules."

But AT&T hasn't said exactly how it interprets those rules. Judging by statements made by Comcast, AT&T could argue that the 2010 rules allow the controversial Internet "fast lanes" in which Web services pay Internet service providers for priority access to consumers over the network's last mile.