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Netflix tells ISPs profit sharing works both ways as net neutrality row continues

Reed Hastings says ISPs are sacrificing the interests of their customers
Fri Mar 21 2014, 16:17
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STREAMING VIDEO SERVICE Netflix's CEO Reed Hastings has taken to the company's blog to express his views about net neutrality.

Last month Netflix announced that it had struck a direct access agreement with Internet Service Provider (ISP) Comcast. Although that fell outside the net neutrality rules, Hastings believes that it shouldn't.

He said that Netflix will pay the fees being demanded by Comcast "in the near term", but expressed his concern that ISPs are setting fees that could affect smaller organisations as much as larger ones that can't afford the charges that might be levied.

Defending the claim made by ISPs that believe Netflix should share the costs associated with creating 30 percent of peaktime internet traffic in the USA, he responded that surely then it would be equally valid for Netflix to share in the ISPs' revenue, too.

He said, "When an ISP sells a consumer a 10 or 50Mbps internet package, the consumer should get that rate, no matter where the data is coming from."

Naming no names, he went on to say, "Some big IPSs are extracting a toll because they can - they effectively control access to millions of consumers and are willing to sacrifice the interest of their own customers to press Netflix and others to pay."

This might have been a swipe at Verizon, which ignited the debate on net neutrality after winning an appeal ruling that the Federal Communications Commission (FCC) did not have the authority to enforce net neutrality rules.

Hastings said that ISPs "should realise it is in their long term interest to back strong net neutrality".

He also said that the firm's payments to ISPs will continue, but added that Netflix will continue to campaign against them.

As this article was going to press we were alerted to a response Comcast made in a statement to Consumerist, which said, "There has been no company that has had a stronger commitment to openness of the internet than Comcast. We supported the FCC's Open Internet rules because they struck the appropriate balance between consumer protection and reasonable network management rights for ISPs. We are now the only ISP in the country that is bound by them."

This, while it is strictly speaking true, is a result of the concessions it has had to make to satisfy regulators about its multi-billion dollar takeover of rival Time-Warner. µ

 

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