Major Internet service providers in the United States are essentially holding their connections for ransom while letting customers suffer, according to a company that acts as a middleman for Internet traffic.
The accusations come from Level 3, which helps deliver traffic from content providers (such as Netflix) to Internet service providers (such as Comcast). Level 3 has been measuring its connections around the world, and found that U.S. ISPs are the worst at allowing congestion to happen.
Level 3 has 51 "peers" around the world, including ISPs and other middlemen. Out of those 51 connections, a dozen are congested, causing slower speeds or interruptions. Half of those 12 congested connections are due to a single port, and those are all being upgraded.
The other six connections are congested on nearly all ports, and all of those connections are to consumer-facing Internet service providers. One of those ISPs is in Europe; the other five are in the United States. As a result, customers are experiencing delayed or dropped packets throughout the day.
In other words, U.S. Internet providers are the worst at making sure their networks can meet demand, at least from Level 3. Instead of augmenting their network capacity (at costs that are "not significant," according to Level 3), these ISPs are holding out for payments, either from middlemen or from content providers such as Netflix.
While Level 3 doesn't name names, this practice isn't exactly a secret. In February, Netflix signed an interconnection deal with Comcast, allowing Netflix to skip the middleman and have a more direct connection to Comcast subscribers. In April, Netflix made a similar deal with Verizon.
It's important to note that these aren't entirely new costs for Netflix, because the company would have been paying a middleman such as Level 3 if it wasn't paying ISPs directly. The concern, as Netflix has expressed recently, is that large ISPs will be in position to escalate their fees in the future. (For now, at least, ISPs aren't charging predatory rates, according to GigaOm.)
Even if the United States had strong net neutrality protections in place, these issues wouldn't count as a violation. Net neutrality rules typically deal with the "last mile" of connectivity between the ISP and the user, so any congestion between the ISP and a middleman like Level 3 wouldn't be covered. But that's exactly what Level 3 is hoping to change as the FCC considers new net neutrality rules.
The counter-argument is that this is more of a business issue than a net neutrality one, and that Level 3 isn't exactly innocent when it comes to demanding payment for lopsided peering arrangements. So while you should be upset that ISPs are making customers suffer--and can get away with it because of how little competition they face--you should also take Level 3's wants and needs with a pinch of salt.
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