Sen. Al Franken (D-Minn.), so far the most visible congressional opponent of the Comcast-Time Warner Cable merger, is asking Netflix to explain if it will mean the cable giant will have the “power and incentive” to act as a gatekeeper of traffic on the Internet.
In a letter to Netflix CEO Reed Hastings sent on Wednesday, Franken singled out Netflix’s recent interconnection agreement with Comcast to resolve an issue over the problems Netflix subscribers were having streaming videos over its broadband networks. No price was disclosed for the agreement.
“If incidents like this become the norm — as I fear is more likely if Comcast is allowed to acquire Time Warner Cable — it would have serious implications for consumers,” Franken wrote. “For one thing, the increased costs not only will create a barrier to entry for new content producers, they also will be passed along to consumers. For another, if Comcast is permitted to throttle Internet traffic, it will be able to undermine consumers viewing options, steering them from competitors’ offerings to its own.”
Comcast exec VP David L. Cohen has dismissed concerns that it will block or throttle Internet traffic. The company is bound by net neutrality rules, which prohibit blocking or slowing nonaffiliated content, until 2018, and Cohen believes that the FCC will have new industrywide rules in place by then.
But the interconnection, or “peering,” agreement between Comcast and Netflix does not fall under the FCC’s most recent net neutrality rules, raising alarms that it would be the shape of things to come if Internet video sites are forced to pay providers for better access.
In fact, Hastings himself warned that such deals will drive up costs for consumers, and that Comcast was “extracting a toll because it can.” He also said that such interconnection practices should be regulated by more robust net neutrality rules.
Still, at a Senate Judiciary Committee hearing on the merger last week, Cohen said that it was Netflix’s idea to enter into the deal, as it wanted to eliminate having to go through a third-party company to arrange for such a traffic flow. In an interview with CSPAN, Cohen also said that such peering arrangements are made in a marketplace that is “intensely competitive.”
In the letter, Franken asked Hastings if the merger would increase Comcast’s ability to extract payments from nonaffiliated entities as a condition for gaining access to its broadband customers, and he asked him to comment on Comcast’s contention that the broadband marketplace is highly competitive.
A Netflix spokesman said that the company had received the letter and would respond to it.
Netflix, through outside counsel, has filed a request with the FCC for access to confidential documents filed by Comcast and Time Warner Cable in their application for merger approval. The request is customary in such transactions and sometimes precedes a formal filing of comments about the potential impact of a merger.