McAdam went on to praise the Comcast-Netflix deal:
You saw the Netflix-Comcast deal this week which I think -- or a couple weeks ago -- which is smart because it positions them farther out into the network, so they are not congesting the core of the Internet. And there is some compensation going back and forth, so they recognize those that use a lot of bandwidth should contribute to that.
Comcast and Netflix weren't congesting the core of the Internet. Rather, they were having congestion issues at several peering points with Cogent -- not the same thing at all. Plain and simple, Comcast forced the Netflix deal through the leverage of its monopoly status. That's not the way this should work, and it sets a dangerous precedent. I don't necessarily fault Netflix for capitulating, as it was essentially forced to do so.
How should this work? In a competitive market, Comcast customers upset with Netflix performance would complain to Comcast. Comcast would then explore ways to keep its customers happy by expanding the bandwidth to support this changing workload. If Comcast did not make these changes, its customers would move to a provider that did not have issues with Netflix.
For Comcast, fixing the problem may indeed involve a direct connection to Netflix, as many other ISPs have already done through Netflix's Open Connect program. This provides direct connections and local caching to reduce the impact of Netflix streams on peering connections. Those other ISPs participate without remuneration from Netflix because it reduces load on their network and keeps their customers happy.
That's how things should have worked in this case. It's how things have worked with other ISPs. However, because Comcast doesn't have to worry much about losing customers, due to the dearth of broadband competition in most markets, it could sit by and let its customers complain, while Netflix twisted in the wind. Now Comcast is getting paid twice -- by its customers and by Netflix -- to deliver the same traffic. All it had to do was nothing.
The big ISPs won't save any lives by prioritizing traffic and getting paid by both sides of a connection. They'll just continue to do nothing, and let the Internet in the United States stagnate while they reap the financial rewards by being the gatekeepers of what should be a free and open network.
No matter which side of this argument you may be on -- the side of higher regulation and common-carrier status, the side of fomenting legitimate competition in all markets, or a mixture of both -- the merger of Comcast and Time Warner, and these comments by Verizon's CEO, cannot be considered healthy for the Internet or for any entity besides these big ISPs.
This story, "Hey Verizon, we're not as stupid as you think we are," was originally published at InfoWorld.com. Read more of Paul Venezia's The Deep End blog at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.