Light Reading

4 ISPs That Netflix Hates

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Ted Sarandos, the chief content officer of over-the-top video specialist Netflix Inc. (Nasdaq: NFLX), went a bit over the top himself at the Bank of America/Merrill Lynch investors conference this week when he lashed out at the capping and metering policies run by some of Canada's top broadband providers.

"It's almost a human rights violation, what they're charging for Internet access in Canada," he said, later likening the situation north of the border as "almost third-world access to the Internet."

Netflix has had its share of issues with Canada ever since it launched streaming services there, going as far as letting customers adjust their bit rates to help them avoid overage charges. (See Netflix Canada Cuts Video Streaming Quality and Netflix Fears by-the-Byte Tiers .)

Sarandos may need to save some of that fire and brimstone for the U.S., because caps and overage charges here are slowly becoming commonplace, despite concerns expressed this week by Federal Communications Commission (FCC) Chairman Julius Genachowski.

Before we get to the list, we'll mention a couple of ISPs that Netflix probably loves. Verizon Communications Inc. (NYSE: VZ)'s wireline broadband remains cap-free, and Google (Nasdaq: GOOG) will follow suit as it introduces 1Gbit/s services in the Kansas Cities. (See Google Fiber Bundles TV, Shuns Data Caps.)

But now, here are some ISPs that Netflix hates, or that at least won't be on its Christmas card list.

Rogers Communications
Rogers Communications Inc. (Toronto: RCI) is big, is Canadian and uses policies that meter and cap broadband -- a Netflix trifecta. Rogers also recently put in a new policy that doubles the maximum overage fee it will charge if customers exceed their monthly data allotments. (See Rogers Raising the Ceiling on Overage Fees.)

Netflix has already blown a couple of gaskets about the policy Comcast Corp. (Nasdaq: CMCSA, CMCSK) has applied to its TV Everywhere app on the Xbox 360, namely that any data used for that app does not get applied to broadband caps, in part because it travels Comcast's private IP network. While that's more of a network neutrality argument, Comcast has suspended caps in most markets as it tests out new policies that charge extra for a bucketful of gigabytes when customers exceed a relatively generous monthly ceiling of at least 300Mbit/s. According to DSL Reports, Comcast is also looking at a monthly 500GB cap for some of its higher-speed tiers. That's a big number, but we suspect it's not enough to make Netflix forget about Xbox. (See Netflix CEO Keeps Whining About Comcast, Comcast Denies It's Prioritizing Xbox Video and Comcast Turns On Usage-Based Broadband.)

AT&T Inc. (NYSE: T)'s policy charges U-verse subscribers $10 for every 50GB they consume above a 250GB ceiling. Customers for AT&T's regular DSL service are similarly dinged if they exceed a monthly 150GB threshold. (See AT&T to Fit Subs With Broadband Caps .)

Perhaps this MSO could be placed into a love/hate category. On one hand, Suddenlink Communications has shown interest in offering the Netflix app on leased TiVo Inc. (Nasdaq: TIVO) boxes if all of Netflix's programming contracts allowed for it, so one could almost call the operator a fan of the video streamer. On the other hand, Suddenlink recently suspended its broadband usage policy so it could investigate a rare discrepancy for its byte-meter and hire a third party to validate the accuracy of the system. (See Suddenlink Puts Broadband Overage Fees on Ice and Suddenlink Blames Netflix Contracts .)

Those are just four quick examples. Who else belongs on Netflix's list or at least deserves an honorable mention?

— Jeff Baumgartner, Site Editor, Light Reading Cable

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User Rank: Light Beer
12/5/2012 | 5:20:58 PM
re: 4 ISPs That Netflix Hates


Okay, so let's make sure what they are saying is what is intended.  The private IP network shares both the metro and the access network with the public IP network.  The only place in fact that they really get separated is that the public goes to peering points.  So, Comcast is saying that ALL the cost of running video to subscribers is Internet peering as the rest is apparently free!  This must be so, since each subscriber can use infinite amounts of their private IP bandwidth without penalty.

Good to know.


PS - Yes I know this is an absurdum argument...just trying to make a point.


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