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U.S. regulator begins review of web traffic exchange agreements

By Alina Selyukh and Marina Lopes

WASHINGTON (Reuters) - The Federal Communications Commission is studying details of Internet traffic exchange agreements between Netflix, Verizon, Comcast and others to begin to review such arrangements, FCC Chairman Tom Wheeler said on Friday.

The U.S. regulator has collected terms of so-called "peering agreements" between Netflix Inc and the two large Internet service providers, but is asking other broadband providers and content companies to share theirs as well.

Such agreements have long been kept secret by the companies, and it is unclear whether or not the FCC would disclose them.

"Consumers must get what they pay for. As a consumers' representative, we need to know what?s going on," Wheeler said after a monthly FCC meeting.

"To be clear, what we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I."

Netflix has been urging the FCC to do away with fees that content providers pay for delivery of their services to consumers as they have been blaming Internet providers for throttling their popular traffic.

"We welcome the FCC's efforts to bring more transparency in this area," Netflix spokesman Joris Evers said in a statement on Friday. "Americans deserve to get the speed and quality of Internet access they pay for."

Netflix earlier this year signed deals to pay fees to Verizon Communications Inc and Comcast Corp to bypass the middlemen they had paid before and deliver content directly to the company's subscribers, ensuring faster speeds.

"Internet traffic exchange has always been handled through commercial agreements. This has worked well for the Internet ecosystem and consumers," Verizon spokesman Bob Elek said in a statement. "We are hopeful that policy makers will recognize this fact and that the Internet will continue to be the engine of growth of the global economy."

Comcast spokeswoman Sena Fitzmaurice said in a statement that the company welcomed the review. "We also agree with the Chairman that the broadband consumer should be the focus of this inquiry and not any particular business model."

(Reporting By Marina Lopes and Alina Selykh in Washington and Lisa Richwine in Los Angeles)

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