Netflix Chief Hastings: Comcast and Other

Comcast EVP responds that interconnection fees are a market-based solution to bandwidth issues

Netflix CEO Reed Hastings last month agreed to pay Comcast for direct connections to the cable giant’s Internet networks. But he isn’t happy about it.

The exec issued a call for a “strong” form of net neutrality that would prohibit broadband service providers like Comcast and AT&T from demanding payments from content companies like Netflix.

In a blog post published Thursday, Hastings argued that a new form of net neutrality is needed that “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.”

SEE ALSO: Why Hollywood Should Be Watching For Robust Net Neutrality Rules

Instead, according to the Netflix topper, “they must provide sufficient access to their network without charge,” Hastings wrote.

“Netflix believes strong net neutrality is critical, but in the near term we will in cases pay the toll to the powerful ISPs to protect our consumer experience,” Hastings wrote. “A few weeks ago, we agreed to pay Comcast and our members are now getting a good experience again. Comcast has been an industry leader in supporting weak net neutrality, and we hope they’ll support strong net neutrality as well.”

In response, Comcast exec VP David L. Cohen, who oversees the company’s public-policy strategy, issued a statement contending that “there has been no company that has had a stronger commitment to openness of the Internet than Comcast.”

What Hastings called “weak” net neutrality were the previous FCC rules that an appeals court struck down in January. Those prohibited ISPs from blocking or degrading traffic based on source. But Comcast is still bound to abide by those rules until 2018, under its agreement with the U.S. government in connection with its deal for NBCUniversal.

Cohen said the agreement between Comcast and Netflix was “an amicable, market-based solution to our interconnection issues.”

“The Open Internet rules never were designed to deal with peering and Internet interconnection, which have been an essential part of the growth of the Internet for two decades,” he said. “Providers like Netflix have always paid for their interconnection to the Internet and have always had ample options to ensure that their customers receive an optimal performance through all ISPs at a fair price.”

SEE ALSO: Netflix CFO: Comcast Bandwidth Deal Doesn’t Change Our Economics

FCC chairman Tom Wheeler last month said the commission would seek to create new rules for net neutrality. But what form those take remains to be seen. Hastings’ missive today, while it did not explicitly advocate government intervention, appears aimed at pushing the Netflix agenda in the public debate.

Internet service providers say that Netflix consumes an excessive amount of bandwidth on their networks, and that Netflix isn’t entitled to unfettered access to their networks (in an industry arrangement known as settlement-free peering) because it dumps far more data on ISPs than it receives. Netflix’s streaming service accounts for about one-third of downstream Internet traffic during peak periods.

But Hastings contended that interconnection fees — like those Netflix is paying to Comcast — are an “arbitrary tax” that broadband providers are charging simply because they have the market clout to do so.

“Some big ISPs are extracting a toll because they can — they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay,” the Netflix CEO wrote.

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