Less than a month after agreeing to pay a leading US ISP to ensure that its over the top (OTT) service was delivered without service interruption, Netflix is demanding that net neutrality is enshrined in the US.
In an impassioned plea and attack on ISPs in the country —including Comcast, AT&T, Time Warner Cable and Verizon—Netflix CEO Reed Hastings condemned existing net neutrality regulation 'weak' and insufficient'.
Instead he argued: "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. 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."
This is a burning issue for Netflix. At the end of February 2014, in a deal predicted to have ramifications for net neutrality, Netflix agreed to pay Comcast for direct access to the leading US cable MSO's network — an interconnection agreement that will help ensure that Netflix films and television shows stream without hiccup to Comcast customers.
Even though the CEO did commend Cablevision, who he said already practiced strong net neutrality and for their broadband subscribers, and described the quality of Netflix and other streaming services as outstanding, he said it was a much different picture on the major network providers. Indeed Hastings pointed out that congestion was hurting Netflix's average primetime performance due to a lack of sufficient interconnectivity.
These problems were, he said, "subjecting consumers who pay a lot of money for high-speed Internet to high buffering rates, long wait times and poor video quality." Yet Hastings warned also of ISPs of taking unfair advantage of online video players such as his company.
"Once Netflix agrees to pay the ISP interconnection fees, however, sufficient capacity is made available and high quality service for consumers is restored," Hastings added. "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.
"Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service. The big ISPs can make these demands -- driving up costs and prices for everyone else -- because of their market position. For any given U.S. household, there is often only one or two choices for getting high-speed Internet* access and that's unlikely to change. Furthermore, Internet access is often bundled with other services making it challenging to switch ISPs. It is this lack of consumer choice that leads to the need for strong net neutrality."