FCC Chairman: No Investigation Into Netflix Mobile-Video Throttling

Courtesy of Netflix

FCC Chairman Tom Wheeler said the agency will not look in Netflix’s years-long practice of slowing of video streams to customers on some wireless networks, because the issue falls outside of regulatory jurisdiction.

“It is outside the (FCC’s) Open Internet” rules, Wheeler told reporters after the FCC’s open meeting Thursday. “We do not regulate edge providers.”

The FCC last year enacted a set of open Internet rules that ban broadband providers from blocking or throttling content, or from engaging in what is called paid prioritization. But the rules do not apply to so-called “edge providers,” websites or other content services.

Netflix declined to comment.

Last week, Netflix disclosed that is has capped video on AT&T and Verizon wireless networks for several years at 600 kilobits per second, “in an effort to protect our members from overage charges when they exceed mobile-data caps,” according to a company spokeswoman. Netflix also said it plans to introduce a new feature in May that will let subscribers adjust their settings, so they could choose to watch video at higher bit rates.

Some observers have accused Netflix of hypocrisy, noting that it has been a vocal proponent of imposing strong network neutrality restrictions on ISPs. In a speech to the American Action Forum this week, FCC Commissioner Michael O’Rielly charged that Netflix “has attempted to paint a picture of altruism whereby it virtuously sought to save these consumers from bumping up against or exceeding their data caps.”

“There is no way to sugarcoat it: The news is deeply disturbing and justly generates calls for government — and maybe even Congressional — investigation,” O’Rielly said. While he acknowledged that the FCC’s net neutrality rules apply only to Internet service providers, he said that the Federal Trade Commission “may have grounds” to look into Netflix’s throttling.

Netflix claims the mobile-video throttling has not been a problem for customers. “Our research and testing indicates that many members worry about exceeding their mobile data cap, and don’t need the same resolution on their mobile phone as on a large-screen TV to enjoy shows and movies,” Netflix spokeswoman Anne Marie Squeo wrote in a blog post last week.

But critics argue that Netflix should have disclosed the practice, particularly given its net-neutrality stance. There’s “nothing inherently wrong with Netflix’s throttling,” Berin Szoka, president of think tank TechFreedom, said in a statement last Friday. But he questioned why Netflix failed to inform consumers it was limiting video quality: “Was Netflix afraid the angry mob it helped create would turn on it? And where was its talk of ‘striking a balance that ensures a good streaming experience’ when it was lobbying the FCC to ban throttling outright?”

“It turns out Netflix was really saying ‘Net neutrality for thee, but not for me,'” Szoka said.

Separately Thursday, the FCC approved a proposal to prohibit broadband providers from using consumer data without their consent and an expansion of the Lifeline program to provide subsidies for low-income consumers to supply broadband service.