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FCC Indulges Netflix CEO

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
4/17/2012
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Another round in the bout between Reed Hastings and Comcast Corp. (Nasdaq: CMCSA, CMCSK) over the MSO's streaming video policies kicks off today's cable news roundup.

  • The Federal Communications Commission (FCC) is monitoring Comcast's streaming video policies on the Xbox 360 amid recent complaints from Netflix Inc. (Nasdaq: NFLX) CEO Reed Hastings that Comcast is violating the Commission's network neutrality rules, reports The Wall Street Journal. Hastings is ticked that using the Xfinity TV app on the gaming console will not count toward a customer's monthly broadband usage cap. But FCC rules allow MSOs to give special treatment to traffic traveling via its private IP network, as Comcast says it is doing in this case. (See Netflix CEO Keeps Whining About Comcast and Comcast's Xbox App Raises Net Neutrality Concerns.)

  • Tablet owners do about 15 percent of their TV show viewing on the devices, making tablets the clear in-home viewing alternative to big screen TVs, reports Multichannel News, citing a study of 2,500 consumers who own tablets that was commissioned by Viacom Inc. (NYSE: VIA), which owns networks such as MTV and Nickelodeon. The findings come into play as MSOs continue to pipe on-demand and a limited lineup of live, linear TV feeds to tablets and other portable devices.

  • Level 3 Communications Inc. (Nasdaq: LVLT) has more than doubled the capacity of its content delivery network (CDN) in anticipation of rising demand for bandwidth-intensive services such as streaming video. The upgrade boosts the company's CDN capacity to more than 5.6Tbit/s, up from the 2.15Tbit/s it put into place in late 2010, about the time Level 3 inked a deal with Netflix and sparked a network neutrality debate with Comcast. (See Comcast: Level 3 Balks at Trial Offer .)

  • OptiComm Co. Pty. Ltd. will use two Docsis 3.0-qualified cable modem termination system (CMTS) models from Casa Systems Inc. to power a wholesale hybrid fiber/coax (HFC) network it's deploying in Australia. The resulting "open access" network will provide links up to 100Mbit/s and enable partners to deliver IP video and other bandwidth-intensive services.

  • Synacor Inc. has cut a deal to build an authenticated TV Everywhere Web portal for MetroCast Communications, an MSO that serves parts of New Hampshire, Connecticut, Maryland, Virginia, Mississippi, South Carolina and Pennsylvania.

  • OfficeDrop has launched a white-label, cloud-based storage service tailored to MSOs and ISPs, offering more competition for Mozy, which has deals with cable operators such as Cox Communications Inc. and Comcast. (See Comcast Picks Mozy for Online Backup.)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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    AESerm
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    AESerm,
    User Rank: Light Beer
    12/5/2012 | 5:36:16 PM
    re: FCC Indulges Netflix CEO


    Capacity has doubled, but L3 says that CDN remains steady at only 2% of its core network services revenue. It expanded reach via Global Crossing, a deal that closed last Oct.

    ibarrera
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    ibarrera,
    User Rank: Light Beer
    12/5/2012 | 5:36:16 PM
    re: FCC Indulges Netflix CEO


    Comcast is playing with a double edge sword. The moment they are allowed that game, it's very likely AT&T goes with the same game. And I see that other than customers and neutrality, the clear looser would be Comcast, given they have no wireless mobile service.


    So the moment this game is allowed to Comcast, very likely Verizon and AT&T will eat them alive. I don't know why they haven't thought about it.

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:36:14 PM
    re: FCC Indulges Netflix CEO


    I've asked Comcast to offer more info on how they are doing this technically  from the start to the finish line, but I believe they are using their own CDN to handle streaming on the Xfinity TV app.  And some evidence of that popped up when I had some trouble signing on when it was first launched, as I got some "Xfinity servers not available" messages.  But i'm also curious how it's done from the edge, and if the Xfinity TV app traffic to the Xbox 360 is on the same bandwidth set aside for best effort HSD and is prioritized for this managed service, or if they're carving out another channel for this purpose.  I'll keep digging on it, but if the pressure keeps up and the FCC is forced to do some sort of probe just to see what's going on then the tech details will certainly show up in the filings.


    And I also wonder if Hastings would be complaining so much about this if Comcast didn't launch Streampix, its new subscription-based video streaming service. JB

    Flook
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    Flook,
    User Rank: Light Beer
    12/5/2012 | 5:36:14 PM
    re: FCC Indulges Netflix CEO


    Regarding Comcast v. Netflix, FCC says it's ok for Comcast to stream because the video traffic is on its private IP network. I could be wrong, but from the subscriber to the network edge, is it still a "private" IP network?

    DCITDave
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    DCITDave,
    User Rank: Light Beer
    12/5/2012 | 5:36:12 PM
    re: FCC Indulges Netflix CEO


    If Netflix traffic doesn't have to compete with Xfinity for bandwidth (since it is being transported via a different network, allegedly), and nothing is being blocked, what's the harm to Netflix?

    ibarrera
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    ibarrera,
    User Rank: Light Beer
    12/5/2012 | 5:36:10 PM
    re: FCC Indulges Netflix CEO


    Seems to me the harm is that Comcast control the caps at their will.


    So I bring more questions:


    First, why they claim it's because the traffic is internal, but connecting to other Comcast customers still counts against my cap?


    Second, why anyone sign with Netflix, for a service Comcast provides, and given their contractual links to networks, probably have even more content?


    Third, wouldn't bundling services imply that Comcast can provide the same service for an imaginary smaller amount to its customers until Netflix goes out of business?


    I personally see more issues, perhaps because I don't like Comcast much, or Internet caps for that matter. And particularly, I don't like how ISP's are making their core service, more lucrative by imposing imaginary limits to charge customers more.

    AESerm
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    AESerm,
    User Rank: Light Beer
    12/5/2012 | 5:36:10 PM
    re: FCC Indulges Netflix CEO


    The question that Dan Rayburn at Streaming Media is asking seems on point: How many Netflix subscribers are going over their caps? Seems fair. In any case, you've got to be streaming a lot to break 250 GB.

    ibarrera
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    ibarrera,
    User Rank: Light Beer
    12/5/2012 | 5:36:09 PM
    re: FCC Indulges Netflix CEO


    And what I say is that it sounds fine and all, until Comcast comes with a new pricing scheme similar to those from AT&T, and rolls out "cheaper" plans with lower caps, bundled with their service.


    I know it's not happening yet, but why always the customers have to take the pre-emptive strike?


    At some point I was consuming 150G on average per month, synchronizing data,  consuming multimedia and sharing a lot of my personal pictures/videos with family overseas. What's to harm Netflix? Limited plans that won't fit consumers demands, but will fit Comcast profits.

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