You will be redirected back to your article in seconds

Netflix Bolsters Al Franken’s Arguments Against Comcast-TWC Merger

Sen. Al Franken (D-Minn.), so far the most visible Capitol Hill lawmaker to oppose Comcast’s merger with Time Warner Cable, is pointing to Netflix’s experience as an example of why the transaction should be blocked.

Netflix earlier this week announced its opposition to the merger, citing the greater leverage that it will give Comcast, particularly over providing content companies with access to its broadband customers.

On Thursday, Franken released a letter he got from Netflix after asking the company’s CEO, Reed Hastings, for his opinion of the merger and its affect on competition.

“Netflix has seen firsthand how Comcast can leverage its existing market power to extract arbitrary tolls to reach consumers, particularly from Internet video companies like Netflix that pose a competitive threat to Comcast’s own video services,” Netflix VP Christopher Libertelli wrote to Franken.

Libertelli then went on to cite the issue of the connection of one broadband network with another. In February, Netflix reached an “interconnection” agreement with Comcast to provide the capacity to deliver its video signal to Comcast subscribers.

Netflix says that in the past, such connections have been made with no fee. But with video quality degraded on Comcast, Netflix contends, it was forced to pay for improved delivery.

“That is where Comcast is able to leverage its market power most effectively,” Libertelli wrote. “It can restrict transit capacity into its network to force content providers into paying for uncongested interconnection.”

Franken said that Netflix’s experience “appears to illustrate the point” that the merger would “give Comcast too much leverage over everyone else on the Internet, resulting in higher prices and worse service for consumers.”

In a statement issued Thursday, Comcast’s Jennifer Khoury said that “Netflix’s argument is a House of Cards.”

As we and other industry observers have already noted, Netflix’s decision to reroute its Internet traffic was all about improving Netflix’s business model,” she said in a statement. “While it’s understandable for Netflix to try to make all Internet users pay for its costs of doing business (as opposed to just their customers), the company should at least be honest about its cost-shifting strategy.”

She noted that Comcast has many other agreements like the one with Netflix, as have other Internet providers. “And those agreements have not harmed consumers or increased costs for content providers. If anything, they have decreased the costs those providers would have paid to others,” she said.

More Biz

  • Prince Memoir, ‘The Beautiful Ones,’ to

    Prince Memoir, ‘The Beautiful Ones,’ to Be Released in October

    The memoir Prince was working on at the time of his death is coming out Oct. 29, according to the Associated Press. Publisher Random House confirmed Monday that “The Beautiful Ones” will combine Prince’s unfinished manuscript with rare photos, scrapbooks and lyrics. Announced just weeks before his 2016 death, the 288-page book, issued in partnership [...]

  • Abigail Disney on Bob Iger

    Abigail Disney Calls Bob Iger's $65 Million Compensation 'Insane'

    Disney chairman-CEO Bob Iger’s total compensation for Disney’s fiscal 2018 was a whopping $65.6 million. Abigail Disney, the granddaughter of Disney co-founder Roy Disney, calls that sum “insane.”  While speaking at the Fast Company Impact Council, the filmmaker and philanthropist insisted that this level of corporate payout has a “corrosive effect on society.” Disney took [...]

  • Contract Placeholder Business WGA ATA Agent

    Signs of Solidarity and Strain Emerge as Week 2 of WGA-Talent Agency Standoff Begins

    Hundreds of WGA members rallied solidly behind their union last week as the industry grappled with uncertainties spurred by the sudden break between writers and their talent agency representatives. But as the standoff heads into its second week, signs of strain among some WGA members are beginning to emerge. Shalom Auslander, author and creator of [...]

  • Woodstock 50 Festival Postpones Ticket On-Sale

    Woodstock 50 Festival Postpones Ticket On-Sale Date

    UPDATED: The troubled Woodstock 50 festival has run into more difficulties, as multiple sources told Variety late Friday that the April 22 on-sale date for the event has been postponed. Agents for artists scheduled to perform at the festival — which include Jay-Z, Dead & Company, Chance the Rapper, Miley Cyrus, Imagine Dragons and Halsey [...]

  • National Enquirer - Jeff Bezos

    Hudson Media CEO James Cohen Purchases the National Enquirer

    Hudson Media’s CEO James Cohen announced Thursday that he will purchase the National Enquirer as well as American Media’s other tabloids, the Globe and the National Examiner. With the purchase of the National Enquirer, which Cohen reportedly bought for $100 million, he plans to strengthen their collaborative efforts, documentary shows, weekly podcasts, and theme parks. [...]

  • Amazon

    Amazon Music’s Free Tier Is More Advertising Play Than Spotify Killer, Analysts Say

    When news began to spread last week that Amazon Music’s long-anticipated free streaming tier was imminent, headlines emerged about its threat to Spotify and Apple Music, with some stories saying that Spotify’s stock price dropped in response to the news. But not only was today’s launch of the free tier basically a soft one — [...]

More From Our Brands

Access exclusive content