& cplSiteName &

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        ADD A COMMENT
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: Light Sabre
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...
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Charting the CSP’s Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it’s going from two industry veterans.
LRTV Custom TV
Cisco's Innovations in Cable

5|26|16   |   03:18   |   (0) comments


Marc Aldrich from Cisco discusses the latest in security, the evolution and momentum for CCAP and what the industry will be seeing next from Cisco.
LRTV Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (1) comment


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
DT: Telcos Must Escape Vendor Prison
Iain Morris, News Editor, 5/24/2016
AT&T to Start 5G 'Friendly' Trial by 2016 End
Dan Jones, Mobile Editor, 5/24/2016
Cable Is Eyeing Its Retail Options
Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
AT&T's Margaret Chiosi Retires
Ray Le Maistre, Editor-in-chief, 5/25/2016
Verizon Backpedals on Go90
Mari Silbey, Senior Editor, Cable/Video, 5/24/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.