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Netflix’s Ted Sarandos Sticks Up for Network Neutrality Amid Repeal Concerns

Netflix chief content officer Ted Sarandos spoke out in support of the FCC’s network neutrality policy Wednesday as speculation swirls that the policy could be repealed during the presidency of Donald Trump.

“This is an unpredictable new administration, for sure,” said Sarandos at the Hollywood Chamber of Commerce’s state of the entertainment industry conference in Los Angeles. “The decision to preserve net neutrality that President Obama came to was based on the public good. It’s politically popular. It serves the public good.”

Sarandos’ comments follow weeks of speculation that the Trump administration could engineer a reversal of the FCC’s policy on network neutrality, which prevents Internet service providers like Comcast from favoring or impeding the streams that flow through its distribution pipes from content providers like Netflix.

Sarandos also questioned the motives of future FCC commissioners. “Some of the people that are being batted around for FCC — people are concerned that they have personal interest in not having net neutrality,” he said. “It’s a really inefficient way to advance your personal initiatives to get into government. You can be much more effective outside.”

Sarandos didn’t specify which potential appointees he was referring to but he was alluding to economists Jeff Eisenach and Mark Jamison, who Trump recently tapped to review FCC policies as part of the president-elect’s transition team. Both men, who have worked as consultants to Verizon and Sprint, respectively, have publicly opposed network neutrality and are reportedly  to be under consideration for FCC commissioners under a Trump administration. Trump hasn’t spoken out recently against network neutrality, though he tweeted criticism of President Obama over it years ago.

Netflix is among several tech giants that have been vocal proponents of network neutrality in the past in order to prevent ISPs from either degrading the company’s streams or giving preferential treatment to other streaming services. CEO Reed Hastings has taken on ISPs like AT&T and Comcast, to which Netflix could find itself shouldering increased payments known as interconnection fees if network neutrality is repealed.

While other analysts have suggested there is some upside for Netflix in such a scenario, such as reduced competition from other content providers, fears on Wall Street of a negative impact sent the Los Gatos, Calif.,-based company’s stock down in the weeks after the election, while share prices for cable ISPs rose.

Earlier this year, a federal appeals court upheld the rules pushed through by current FCC commissioner Tom Wheeler classifying broadband providers as common carriers under Title II of the Communications Act. But Wheeler may not stick around during the Trump administration, which could reclassify ISPs under Title I or make other moves that would essentially neuter net neutrality.

Who will be joining the FCC next year is unclear until Wheeler discloses his plans, which is factoring into delays in the confirmation of another FCC commissioner, Jessica Rosenworcel.

Sarandos made his comments in a keynote interview with Variety co-editor-in-chief Andrew Wallenstein at the conference, where Sarandos was presented with the Chamber of Commerce’s “Commitment to California” award.

The executive also talked about Netflix’s strategy as a studio, given its planned expansion to 1,000 hours of programming for 2017, as compared to its competition. He emphasized that the studio won’t be creating series for any other outlet.

“We’re not going to build out the Netflix studio to make content for other people,” he said. “We’re going to build it as an internal efficiency in how to make the best shows for Netflix for our subscribers around the world.”

Sarandos argued that the usual practice of studios creating series for others was an inherent conflict. “We’re not looking not to make shows we don’t own,” he said, “[But] we want to buy the content that is the best storytelling.” One example of that is the recent series “Gilmore Girls,” which is owned by Warner Bros. TV.

At the event, Sarandos was presented with the award by Drew Barrymore, star of Netflix’s upcoming series “The Santa Clarita Diet,” for its upcoming move to expansive new office space in Hollywood in January. “We’re not just going to live and work here. We’re going to shoot here,” said Sarandos.

He reported the streaming service has filmed 10 features and 16 scripted series in California this year. “Beyond tax credits, the reason we like to do it is the magic,” he said. “The notion that when you call out for talent, most of the people that are going to be ready with a great experience, you’re much assured of that in Hollywood.”

Barrymore praised Netflix for offering her the opportunity to film in her home state. “It was the best writing I’d seen in so long, and you brought me back to California,” she said of the series. “And you built your studios here!”

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