AT&T: ‘Arrogant’ Netflix Wants a Free Lunch

The telecom company fires back over a push for new federal rules.

Actor Kevin Spacey as Rep. Frank Underwood in the show House of Cards.
National Journal
Brendan Sasso
Add to Briefcase
See more stories about...
Brendan Sasso
March 21, 2014, 2:17 p.m.

Net­flix is try­ing to shift the cost of its ser­vice on to all In­ter­net sub­scribers, AT&T claimed on Fri­day.

“As we all know, there is no free lunch, and there’s also no cost-free de­liv­ery of stream­ing movies. Someone has to pay that cost,” Jim Cic­coni, a seni­or ex­ec­ut­ive vice pres­id­ent for AT&T, wrote in a blog post.

Cic­coni is fir­ing back over Net­flix’s blog post from Thursday in which the on­line video site called for new fed­er­al rules to en­sure it can con­nect to In­ter­net pro­viders for free.

Net­flix CEO Reed Hast­ings warned that without gov­ern­ment in­ter­ven­tion, In­ter­net pro­viders could ex­tort pay­ments out of web­sites, ul­ti­mately strangling com­pet­i­tion and growth on­line.

Last month, Net­flix agreed to pay for dir­ect ac­cess to Com­cast’s net­work. The agree­ment en­sured smooth­er movie stream­ing for Net­flix’s Com­cast sub­scribers, but it was the first time the video site had ever had to pay for such a dir­ect con­nec­tion deal.

AT&T and Ve­r­i­zon have now said they are try­ing to broker sim­il­ar agree­ments with Net­flix, which ac­counts for about 30 per­cent of all In­ter­net traffic. In his blog post, Hast­ings urged the Fed­er­al Com­mu­nic­a­tions Com­mis­sion to en­act new net-neut­ral­ity rules that bar In­ter­net pro­viders from “char­ging a toll” for in­ter­con­nec­tion deals.

“The es­sence of net neut­ral­ity is that [In­ter­net ser­vice pro­viders] such as AT&T and Com­cast don’t re­strict, in­flu­ence or oth­er­wise meddle with the choices con­sumers make,” he said.

But AT&T’s Cic­coni ar­gued that broad­band com­pan­ies have to in­vest huge sums of money to in­crease the ca­pa­city of their net­works to meet the heavy de­mand of Net­flix users.

Net­flix is es­sen­tially ask­ing for all In­ter­net cus­tom­ers to bear the cost of up­grad­ing net­works for just its users, Cic­coni ar­gued.

“Mr. Hast­ings’ ar­rog­ant pro­pos­i­tion is that every­one else should pay but Net­flix,” he wrote. “That may be a nice deal if he can get it. But it’s not how the In­ter­net, or tele­com­mu­nic­a­tion for that mat­ter, has ever worked.”

What We're Following See More »
SAYS TRUMP JUST ATTACKING REPUBLICANS
Former Top Aide to McConnell Says GOPers Should Abandon Trump
14 hours ago
THE LATEST
“YOU CAN’T CHANGE HISTORY, BUT YOU CAN LEARN FROM IT”
Trump Defends Confederate Statues in Tweetstorm
18 hours ago
WHY WE CARE
CEOS HAVE BEEN FLEEING FOR THE EXITS
Trump to End Business Councils
1 days ago
THE LATEST
FROM STATEMENT
McConnell: “No Good Neo-Nazis”
1 days ago
THE LATEST
NO FORMAL LEGISLATIVE EFFORT
CBC Members Call for Removal of Confederate Statues from Capitol
1 days ago
THE LATEST

"Members of the Congressional Black Caucus are reviving calls to remove Confederate statues from the Capitol following the violence at a white nationalist rally in Virginia." Rep. Cedric Richmond, the group's chair, told ABC News that "we will never solve America's race problem if we continue to honor traitors who fought against the United States." And Mississippi Rep. Bennie Thompson said, “Confederate memorabilia have no place in this country and especially not in the United States Capitol." But a CBC spokesperson said no formal legislative effort is afoot.

Source:
×
×

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