Netflix Fears the Internet Could Become Like Cable TV

Fights between big companies could leave Internet users in the dark, the video site’s lobbyist warns.

A sign is posted in front of the Netflix headquarters on January 22, 2014 in Los Gatos, California. 
National Journal
Brendan Sasso
Add to Briefcase
See more stories about...
Brendan Sasso
June 11, 2014, 1:22 p.m.

When ne­go­ti­ations between big me­dia com­pan­ies and cable TV pro­viders break down, view­ers are of­ten left without ac­cess to their fa­vor­ite chan­nels and TV shows.

A fight between CBS and Time Warner Cable last year blacked out chan­nels for mil­lions of con­sumers. Sub­scribers to small cable pro­viders lost ac­cess to Vi­ac­om chan­nels earli­er this year.

Those black­outs could be a pre­view of the In­ter­net’s fu­ture, Net­flix’s top lob­by­ist warned dur­ing a pan­el dis­cus­sion Wed­nes­day.

Chris­toph­er Liber­telli said fed­er­al reg­u­lat­ors should in­ter­vene or the In­ter­net ser­vice pro­viders could “turn the In­ter­net in­to more of a cable tele­vi­sion sys­tem.”

Just like in the cable TV in­dustry, dis­putes between video web­sites and In­ter­net ser­vice pro­viders could keep cus­tom­ers from watch­ing the shows they want, he warned.

For years, web­sites have hired third parties to de­liv­er data to In­ter­net pro­viders, who carry the con­tent to con­sumers’ homes. In re­cent years, be­cause of the massive amount of data that Net­flix is de­liv­er­ing to its sub­scribers, the com­pany has been by­passing those third parties and con­nect­ing dir­ectly to the pro­viders’ net­works. Those dir­ect con­nec­tions en­sure that Net­flix videos stream as smoothly as pos­sible.

But Com­cast and oth­er pro­viders are de­mand­ing that Net­flix pay for dir­ect ac­cess to their net­works. If Net­flix doesn’t pay up, videos be­come grainy and take longer to load.

“This in­ter­con­nec­tion point has be­come the new choke point, the place for ISPs to tax con­tent com­pan­ies,” Liber­telli ar­gued dur­ing the pan­el dis­cus­sion hos­ted by the As­pen In­sti­tute.

He said Net­flix chose to pay Com­cast earli­er this year for a dir­ect-con­nec­tion deal be­cause the situ­ation had be­come “in­tol­er­able.”

“We paid our way around con­ges­tion,” he ex­plained.

The Fed­er­al Com­mu­nic­a­tions Com­mis­sion’s net-neut­ral­ity rules only cov­er how In­ter­net pro­viders handle traffic once it’s on their net­work. The reg­u­la­tions don’t af­fect how net­works con­nect to each oth­er.

But Liber­telli warned that the FCC shouldn’t just give In­ter­net pro­viders a new place to dis­crim­in­ate. He urged the agency to en­act new reg­u­la­tions or im­pose con­di­tions on the massive mer­gers pending be­fore the agency to en­sure Web com­pan­ies can con­nect to broad­band net­works for free.

Jim Cic­coni, AT&T’s top lob­by­ist, ar­gued that Net­flix has al­ways had to pay to trans­mit its traffic and that there’s noth­ing spe­cial about the dir­ect-con­nec­tion deals.

“Net­flix wants free. I get it,” he said dur­ing the pan­el dis­cus­sion. “Some­body ends up hav­ing to pay for the trans­mis­sion of that traffic.”

Reg­u­la­tions re­quir­ing free con­nec­tions would end up for­cing all In­ter­net users to pay for Net­flix’s traffic, re­gard­less of wheth­er they ac­tu­ally sub­scribe to the ser­vice or not, he said.

In an emailed state­ment fol­low­ing the dis­cus­sion, Sena Fitzmaurice, a Com­cast spokes­wo­man, ar­gued that only Net­flix can de­cide how to de­liv­er its traffic.

“They choose the path the traffic takes to us. They can choose to avoid con­ges­tion or in­flict it,” she said. 

What We're Following See More »
CITES CONFLICT OF INTEREST
Lieberman Withdraws from Consideration for FBI Job
2 days ago
THE LATEST
MINIMUM 2 PERCENT GDP
Trump Tells NATO Countries To Pay Up
2 days ago
BREAKING
MANAFORT AND FLYNN
Russians Discussed Influencing Trump Through Aides
2 days ago
THE DETAILS

"American spies collected information last summer revealing that senior Russian intelligence and political officials were discussing how to exert influence over Donald J. Trump through his advisers." The conversations centered around Paul Manafort, who was campaign chairman at the time, and Michael Flynn, former national security adviser and then a close campaign surrogate. Both men have been tied heavily with Russia and Flynn is currently at the center of the FBI investigation into possible collusion between the Trump campaign and Russia.

Source:
BUT WHITE HOUSE MAY USE AGAINST HIM ANYWAY
Ethics Cops Clear Mueller to Work on Trump Case
3 days ago
THE LATEST

"Former FBI Director Robert Mueller has been cleared by U.S. Department of Justice ethics experts to oversee an investigation into possible collusion between then-candidate Donald Trump's 2016 election campaign and Russia." Some had speculated that the White House would use "an ethics rule limiting government attorneys from investigating people their former law firm represented" to trip up Mueller's appointment. Jared Kushner is a client of Mueller's firm, WilmerHale. "Although Mueller has now been cleared by the Justice Department, the White House may still use his former law firm's connection to Manafort and Kushner to undermine the findings of his investigation, according to two sources close to the White House."

Source:
BUSINESSES CAN’T PLEAD FIFTH
Senate Intel to Subpoena Two of Flynn’s Businesses
4 days ago
THE LATEST

Senate Intelligence Committee chairman Richard Burr (R-NC) and ranking member Mark Warner (D-VA) will subpoena two businesses owned by former National Security Advisor Michael Flynn. Burr said, "We would like to hear from General Flynn. We'd like to see his documents. We'd like him to tell his story because he publicly said he had a story to tell."

×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login