Netflix Instant View Overloaded?

Has Netflix gotten ahead of it's system capacity in a push to increase usage of it's year old instant viewing feature? Since the instant feature came online last year, my pc has always qualified for the highest Video Quality through the service, that is until this weekend. Friday night, I went to finish watching a film I began watching last weekend ("The Sand Pebbles" which I would recommend based on the first 40 minutes), and was surprised to find that my connection was rated for only Basic quality video. I wasn't too concerned with the demotion, until I saw the remarkable loss of viewability in the Basic quality service. Scenes which had appearecd sharp in full screen mode at High quality, now appeared blurry in the initial small screen mode.

At first, I assumed that the issue was on my end. I contacted my ISP to find out if my throughput was being channeled down on their end. After testing my service using their equipment, the phone technician at my ISP said everything looked good with my service, and pointed me to an independent speed rating site speedtest.net, to test my speeds for myself. At Speedtest, which is also recommended as a test site by Netflix, I was able to confirm that my connection was consistently able to support over 6 Mbps download speeds.

According to Netflix, the relationship between download rate and instant viewing quality should breakdown as follows: 1.6 - 2.2 or greater Mbps --> High, 1.0 - 1.5 Mbps --> Good, under 1.0 --> Basic. At these rates, my service should allow me to continue to, as I had for the past year, view Netflix movies instantly with the highest picture quality, which I had fealt was quite good, instead of the Basic level which I have found to be unwatchable.

The Netflix help page suggests that, if connection quality problems do not originate with your ISP, they may originate from your wireless network. My older wireless-B network consistently showed an excellent connection, which should allow for 11 Mbps throughput, but to be safe I went to speedtest.net again via my wireless connection. (MyISP had insisted that they would only work with speed issues for PCs on wired connections.) I was surprised to see that my speedtest result for wireless -- despite the excellent connection rating showing on my PC -- was actually about half as fast as my wired connection, but at 3.34 Mbps my download speed still appears to qualify me for the High quality service with room to spare.

Based on these investigations, I'm inclined to conclude that the problem is in fact on Netflix's end. It would not be terribly surprising if they are experiencing problems handling the growing demands on their capacity driven by recent publicity about their new policy of allowing unlimited instant viewing for all but their lowest subscription level users. I'm interested to see if others have experienced the same drop off in connection quality rating that I have in the past few days, and what, if any, techniques others have found to overcome the seemingly deceptive poor ratings.