Netflix CEO Slams ISPs, Argues for Net Neutrality

Even though it signed a deal with Comcast, Netflix only did that for its users

Netflix may have signed a deal with Comcast to make sure it gets access to the company’s broadband network, which should ensure a smoother experience for users, but that doesn’t mean it’s too happy about it.

Reed Hastings, Netflix’s CEO, argued for the need of stronger net neutrality, while also blasting large Internet Service Providers (ISPs) for causing issues for the streaming service until the company felt forced to pay additional fees.

“The essence of net neutrality is that ISPs such as AT&T and Comcast don't restrict, influence or otherwise meddle with the choices consumers make. The traditional form of net neutrality which was recently overturned by a Verizon lawsuit is important, but insufficient,” said Hastings.

He believes that the current form of net neutrality is not enough to protect an open and competitive Internet. A stronger form would prevent ISPs from charging a toll for interconnecting to services such as Netflix, YouTube, or Skype.

Hastings has also addressed the problems that Netflix has been encountering over the past few months as more and more users were reporting connectivity issues and stuttering streaming. While he said that with ISPs such as Cablevision, things had always been great since they practiced strong net neutrality, with other companies, Netflix’s performance had been constrained.

“Once Netflix agrees to pay the ISP interconnection fees, however, sufficient capacity is made available and high quality service for consumers is restored. If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future,” Hastings wrote, taking a direct jab at Comcast with which it signed an agreement last month.

Moreover, without clear rules, big ISPs can demand ever-growing fees for the interconnection required to deliver high quality service, thanks to their market position.

“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,” Hastings added.

On the other hand, he doesn’t see the point in sharing the costs. “ISPs sometimes point to data showing that Netflix members account for about 30% of peak residential Internet traffic, so the ISPs want us to share in their costs. But they don't also offer for Netflix or similar services to share in the ISPs revenue, so cost-sharing makes no sense,” the CEO said.

Furthermore, despite what the Verizon CFO claimed some time ago about Netflix unilaterally dumping as much volume as it wanted on its network, Hastings denied doing such a thing. Instead, he pointed out that what Verizon considered to be “data dumping” was actually the company “satisfying requests made by ISP customers who pay a lot of money for high speed Internet.”

“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,” Reed concluded, promising to continue fighting for net neutrality.

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