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Netflix CEO Talks Net Neutrality And Why It’s Paying Comcast

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Netflix CEO Reed Hastings wrote a rare post on the company blog to address concerns regarding net neutrality and its recently announced deal with Comcast. He writes:

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.

This weak net neutrality isn’t enough to protect an open, competitive Internet; a stronger form of net neutrality is required. Strong net neutrality additionally 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. Instead, they must provide sufficient access to their network without charge.

He goes on to note that some major ISPs (naming Cablevision specifically) are already practicing “strong net neutrality,” but that on other ones, Netflix performance suffers. Here’s a look at Netflix’s most recent ISP Speed Index data. Notice how far down Comcast is compared to Cablevision.

As Hastings says, when Netflix pays an ISP interconnection fees (as it is doing with Comcast), service gets better for users. He writes:

If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future. Roughly the same arbitrary tax is demanded from the intermediaries such as Cogent and Level 3, who supply millions of websites with connectivity, leading to a poor consumer experience.

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. When we do so, we don’t pay for priority access against competitors, just for interconnection. 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.

It will be interesting to see how Comcast looks on the desk ISP Speed Index report.

Hastings goes on to say that ISPs sometimes point to data about Netflix members accounting for 30% of peak residential Internet traffic, and want Netflix to share the costs, “But they don’t also offer for Netflix or similar services to share in the ISPs revenue, so cost-sharing makes no sense.”

He had a lot more to say on the subject, so check out the post, but he concludes by saying that some big ISPs extract a toll “because they can,” and that they should realize that it is in their long-term best interest to support “strong” net neutrality, but that Netflix “will in cases reluctantly pay large ISPs to ensure a high quality member experience.”

He also says Netflix will “continue to fight for the Internet the world needs and deserves.”

In a letter to shareholders back in January, the company said it would “vigorously protest” ISPs impeding video streams, and forcing Netflix to pay fees, and that it would encourage its members to “demand the open Internet they are paying their ISP to deliver.”

Image via Netflix

Netflix CEO Talks Net Neutrality And Why It’s Paying Comcast
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