Apple Pursues Controversial Deals with ISPs to Pay for Better Service

A Comcast Network Technician works on an Xfinity WiFi hotspot on Lee Street in Des Plaines, Ill. The company is rolling out its own content delivery network that will make it an even bigger part of U.S. Internet infrastructure.

Apple is negotiating to connect its growing network of servers with Internet service providers, a move that would provide the company with better connections for software updates and cloud services, according to an industry analyst.
The deals, similar to the ones Netflix signed with Verizon and Comcast, would link Apple's content delivery network (CDN) — the company's private system of servers placed around the country to serve consumers — directly with the infrastructure of ISPs. These connections would allow Apple to sidestep much of the broader Internet.
Interconnection agreements are common in the Internet, providing an efficient way for networks to exchange traffic. Dan Rayburn, an analyst for Frost & Sullivan, first reported the ongoing negotiations.
"Without these interconnect deals taking place, the Internet would not operate as well and fewer services would be available in the market," Rayburn wrote in a post detailing the Apple negotiations.
Apple's investment in building out its own content delivery network comes after the company struggled with a flood of demand after it launched the iOS 7 operating system. A similar problem happened with the launch of iOS 5.
Internet service providers typically formed barter arrangements around interconnection deals, in which each company would trade traffic.
However as some Internet companies grew to begin driving immense amounts of data, the need for content-to-ISP interconnection deals emerged, said Charlie Baker, director of product performance and assurance for Internet traffic management and assurance company Dyn.
"They've gotten to the point where they serve enough traffic globally that they have to do the math about what makes sense for their business and is best for their subscribers," he said.
Rayburn notes that Apple is among only a handful of content producers including Microsoft, Google, Facebook and Pandora that have built private CDNs. Apple and various ISPs did not return requests for comment.
Paid interconnection deals have stoked some controversy, as they are perceived to offer bigger Internet companies the opportunity to pay for better service. Netflix has come outpublicly in favor of regulation that would prevent companies from signing these types of deals despite having entered into them.
"Strong net neutrality additionally prevents ISPs from charging a toll for interconnection to services like Netflix, YouTube, or Skype, or intermediaries such as Cogent, Akamai or Level 3, to deliver the services and data requested by ISP residential subscribers. Instead, they must provide sufficient access to their network without charge," Netflix CEO Reed Hastings wrote in a blog post.
News of the negotiations comes just days after the FCC voted to open a new Internet regulations proposal to public comment. Some, like Hastings, have called for paid interconnection to be banned as a part of an effort to achieve net neutrality.

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