Light Reading

Netflix CEO Wants 'Strong' Net Neutrality

Alan Breznick
3/24/2014
100%
0%

So much for the notion that Comcast bought Netflix's silence on net neutrality rules for at least the next year by striking a favorable peering deal with the online video king.

Defying industry speculation that his company would now give Comcast Corp. (Nasdaq: CMCSA, CMCSK) a pass on net neutrality until its deal Time Warner Cable Inc. (NYSE: TWC) was approved, Netflix Inc. (Nasdaq: NFLX) CEO Reed Hastings is pushing for tighter net neutrality rules to protect US Internet video providers.

In a blog post on the Netflix website late last week, Hastings lashed out at the "big ISPs" that he claims charge "tolls" for direct interconnections with their broadband networks. He also made a passionate case for "stronger" neutrality rules that would keep broadband providers from charging the kind of interconnection fees that Netflix recently agreed to pay Comcast for the next few years. (See Comcast-Netflix Peering Deal: A Game-Changer? and Comcast-Netflix: It's Really All About TWC.)

In his lengthy post, Hastings, who had said little on the net neutrality subject before, contended that the US needs net neutrality rules stringent enough that "ISPs such as AT&T and Comcast don't restrict, influence or otherwise meddle with the choices consumers make."

Although the "traditional form of net neutrality" enacted by the Federal Communications Commission (FCC) but overturned by the federal courts is "important," he said, it's "insufficient" and must be strengthened. (See The Dangerous Reaction to Netflix-Comcast.)

"This weak net neutrality isn't enough to protect an open, competitive Internet; a stronger net neutrality is required," Hastings asserted. Further, he said, a strong net neutrality policy "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 networks without charge."

Seemingly damning Comcast with faint praise, Hastings termed the giant MSO "an industry leader in supporting weak net neutrality." He called on Comcast to "support strong net neutrality as well."

Hastings also contrasted Comcast's peering payment policy with such other major US MSOs as Cablevision Systems Corp. (NYSE: CVC), which don't charge a fee for such links. He noted that Cablevision already practices strong net neutrality by providing direct interconnection for no fee, enabling its high-speed data subscribers to enjoy "outstanding quality" for Netflix and other online video streaming services.

"But on other big ISPs, due to a lack of sufficient interconnectivity, Netflix performance has been constrained, subjecting consumers who pay a lot of money for high-speed Internet to high buffering rates, long wait times, and poor video quality," he wrote.

Although he didn't name those big ISPs in his post, an accompanying graph from a Wall Street Journal article showed how Netflix's prime-time streaming performance has declined on Comcast, Verizon Communications Inc. (NYSE: VZ)'s FiOS, Time Warner Cable, and AT&T Inc. (NYSE: T) U-verse networks in recent months.

In a sharp written response to Hastings' post, Comcast defended its peering policies and rejected Hastings' argument. The MSO noted that, unlike every other ISP in the nation, it carries out the net neutrality rules that the FCC enacted. But Comcast did not note that, unlike every other ISP in the country, it has to do that, due to the conditions imposed upon it when federal regulators approved its purchase of NBC Universal .

"There has been no company that has had a stronger commitment to openness of the Internet than Comcast," said Comcast EVP David Cohen in the statement. "We supported the FCC's Open Internet rules because they struck the appropriate balance between consumer protection and reasonable network management rights for ISPs."

Pointing out that the Open Internet rules "never were designed to deal with peering and Internet interconnection," Cohen also argued that online video providers like Netflix "have always paid for their interconnection to the Internet and have always had ample options to ensure that their customers receive an optimal performance through all ISPs at a fair price." He said the peering deal negotiated by Comcast and Netflix "demonstrates the effectiveness of the market as a mechanism to deal with these matters."

In his post, Hastings said Netflix will "reluctantly," in some cases, "pay the toll to the powerful ISPs to protect our consumer experience," at least in the short term, because of their clout and reach. But he made it clear that his company would not go quietly into the night, warning that Netflix "will continue to fight for the Internet the world needs and deserves."

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(8)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Atlantis-dude
50%
50%
Atlantis-dude,
User Rank: Light Sabre
4/28/2014 | 4:54:51 PM
Death and Taxes
Nothing is certain but ...

A toll is just a form of tax
mendyk
100%
0%
mendyk,
User Rank: Light Sabre
3/24/2014 | 1:04:35 PM
Re: Reed between the lines
I usually have my container of Morton's handy when analyzing comments from Reed Hastings.
brookseven
100%
0%
brookseven,
User Rank: Light Sabre
3/24/2014 | 1:01:40 PM
Re: Reed between the lines
Duh/Dennis,

One thing that I found interesting in the blog post was the Netflix offered to do symmetrical traffic and was turned down.  Now again that is according to the blog post.

The implication was (of course) that even peering wasn't good enough when Netflix was involved.  I have no idea of the veracity of the statements.

seven

 
mendyk
100%
0%
mendyk,
User Rank: Light Sabre
3/24/2014 | 12:33:50 PM
Re: Reed between the lines
Tiering will happen because peering doesn't work, for exactly the reason you cite.
Duh!
100%
0%
Duh!,
User Rank: Light Sabre
3/24/2014 | 12:16:02 PM
Re: Reed between the lines
It's about peering, not tiering.  Very easy to conflate the two, when it serves one's purposes to do so.  Settlement-free peering in the Internet has always been conditioned on roughly symmetrical traffic. 

Let's be clear.  Hastings is looking to externalize costs of his growth onto the big ISPs.  And he's waving the bloody shirt of "Network Neutrality" for support.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/24/2014 | 11:22:26 AM
Reed between the lines
Of course Reed Hastings is against any sort of Internet service tiering. It destroys his company's margins.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
3/24/2014 | 10:46:55 AM
Re: Good for Netflix
rgrutz,

Breaking them up won't create competition. Your asking for a 3rd or 4th wireline network to be built.  The current narrative is that these carriers are on their path to going out of business due to a margin squeeze.  So, I don't see that happening.

I don't actually believe the narrative but I don't see anybody really willing to do a nationwide buildout.  If AT&T and Century start deploying GPON, then I suspect that will be the end of Google Fiber.

seven
rgrutza600
50%
50%
rgrutza600,
User Rank: Lightning
3/24/2014 | 10:32:28 AM
Good for Netflix
I don't trust or like Comcast, and I have nowhere to turn, but ATT.  Which charges the same for the same services.  This duopoly is killing consumers and innovation.   Break them up into fifty pieces each and sell those pieces to Google, Amazon, Apple, Facebook, Microsoft, etc...
Flash Poll
From The Founder
The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
LRTV Custom TV
Sonus NaaS IQ Real-Time Demo

3|6|15   |   4:03   |   (0) comments


Compass Networks Chairman and CEO Matt Bross and Ray Dolin, CEO of Sonus Networks, demonstrate their Sonus IQ SDN solution using a live video conference connection.
LRTV Custom TV
LRTV Talks Carrier WiFi & WiFi Calling With Aptilo Networks

3|6|15   |   4:53   |   (0) comments


We stopped by Aptilo Networks, a market leader in WiFi service management and offloading, to discuss the new possibilities with next-generation WiFi calling and why WiFi should be a natural part of any operator strategy.
LRTV Interviews
NGMN Chairman Outlines His 5G Vision

3|6|15   |   5:10   |   (0) comments


Bruno Jacobfeuerborn, chairman of the NGMN Alliance and Deutsche Telekom CTO, shares his thoughts on the challenges, opportunities and costs of 5G.
LRTV Interviews
In the Cloud With Telecom Italia

3|5|15   |   7:10   |   (0) comments


Light Reading CEO Steve Saunders sits down with Telecom Italia's Simone Battiferri at Mobile World Congress to discuss virtualization, agility and the economic advantages of the cloud.
LRTV Huawei Video Resource Center
New Ways of Working

3|5|15   |   4:24   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Hong Kong Telecom's Michael Yue explains how the transformation in its business has changed its customer relationships.
LRTV Huawei Video Resource Center
Bridging the Digital Gap

3|5|15   |   4:03   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Boingo's Dr. Derek Peterson explains how ICT can help telcos bring the physical and virtual worlds closer together.
LRTV Huawei Video Resource Center
Making the Internet of Things Affordable

3|5|15   |   2:42   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Telefonica's Dr. Mike Short explains how the Internet of Things demands a new low-cost approach to connectivity from telcos.
LRTV Huawei Video Resource Center
Evolution, Not Revolution

3|5|15   |   2:00   |   (0) comments


At the ICT Leaders Roundtable, hosted jointly by Light Reading and Huawei at the Hotel Renaissance in Barcelona just prior to Mobile World Congress, Heavy Reading's Patrick Donegan explains why telcos can't be too hasty in their efforts to transform themselves.
LRTV Custom TV
Management & Orchestration Enablement Strategies Required for NFV Commercial Success

3|5|15   |   6:22   |   (0) comments


NFV commercial success rests on successful service orchestration strategies which can span heterogeneous physical, virtual, legacy and next-gen networks. Network data and security integrity are additional key aspects. Nakina provides a suite of orchestratable network integrity applications built on an open, scalable MANO enablement platform.
LRTV Huawei Video Resource Center
The Power of Five Convergences in OceanStor OS

3|4|15   |   6:24   |   (0) comments


OceanStor OS is Huawei's brand-new storage operating system. While inheriting the consistent high stability, reliability and performance from the company's previous storage products, OceanStor OS abounds in new converged storage features. Specifically, the new storage operating system achieves "five convergences" to lift storage convergence to a higher level.
LRTV Huawei Video Resource Center
4K Brings Extreme Video Experience

3|4|15   |   8:10   |   (0) comments


4K video is a hot topic in the video industry. It will certainly bring an extreme video experience to end users. At the same time, however, it will also pose a big challenge to operators. Check out this Huawei 4K experts' discussion about how operators can achieve success in 4K video service.
LRTV Interviews
DT's Virtualization Vision for Europe

3|4|15   |   10:23   |   (0) comments


Light Reading CEO Steve Saunders talks virtualization, cloudification and standards with Deutsche Telekom's Axel Clauberg at Mobile World Congress.
Upcoming Live Events
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
All Upcoming Live Events
Infographics
Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
Hot Topics
Internet Pioneers Decry Title II Rules
Carol Wilson, Editor-at-large, 3/2/2015
Wheeler: We'll Enforce Title II 'Case-By-Case'
Sarah Thomas, Editorial Operations Director, 3/3/2015
New CenturyLink CTO in Major Overhaul
Carol Wilson, Editor-at-large, 3/4/2015
Verizon Takes Radio Dot to Detroit, VoLTE Overseas
Sarah Thomas, Editorial Operations Director, 2/27/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders talks transformation and virtualization – including Light Reading's independent testing of the vendor's virtualization solutions – with Cisco CEO John Chambers at Mobile World Congress in Barcelona.
Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.