Netflix: Comcast-Time Warner Cable Merger Threatens Internet

The streaming-video provider breaks its silence on the proposed merger.

A sign is posted in front of the Netflix headquarters on January 22, 2014 in Los Gatos, California. 
National Journal
Laura Ryan
See more stories about...
Laura Ryan
April 21, 2014, 2:54 p.m.

Net­flix came out against the pro­posed Com­cast-Time Warner Cable mer­ger Monday, warn­ing that a com­bined com­pany would use its power to charge web­sites tolls to reach their cus­tom­ers.

Com­cast — the coun­try’s largest In­ter­net pro­vider — is already big enough to charge web­sites “un­pre­ced­en­ted” fees, and a com­bined Com­cast-TWC would be­come even more “anti-com­pet­it­ive,” Net­flix said in its earn­ings re­port Monday,

“The In­ter­net faces a long-term threat from the largest [In­ter­net ser­vice pro­viders] driv­ing up profits for them­selves and costs for every­one else,” Net­flix said in a state­ment.

Al­though this is the first time Net­flix com­men­ted on the mer­ger, the com­pany has been very crit­ic­al of Com­cast in the past. Last month, Net­flix CEO Reed Hast­ings blas­ted Com­cast over the agree­ment Net­flix entered in­to with the In­ter­net pro­vider in Feb­ru­ary that re­quires Net­flix to pay a fee to en­sure smooth stream­ing for Com­cast sub­scribers.

This kind of deal, known as an in­ter­con­nec­tion deal, was not part of the fed­er­al gov­ern­ment’s re­cently over­turned net-neut­ral­ity rules, which re­quired all In­ter­net pro­viders to treat In­ter­net traffic equally. But Net­flix re­cently urged the Fed­er­al Com­mu­nic­a­tions Com­mis­sion to ex­pand the rules to pro­tect against such prac­tices.

“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,” Hast­ings said in a March blog post. “The tra­di­tion­al form of net neut­ral­ity which was re­cently over­turned by a Ve­r­i­zon law­suit is im­port­ant, but in­suf­fi­cient.”

Com­cast called Net­flix’s ar­gu­ments for its op­pos­i­tion “in­ac­cur­ate,” say­ing that in­ter­con­nec­tion deals have “noth­ing to do with net neut­ral­ity” in a state­ment Monday. The com­pany main­tained that the mer­ger will be good for net neut­ral­ity be­cause it is the only ISP still bound by the open-In­ter­net rules, due to con­di­tions set when it ac­quired NBC Uni­ver­sal in 2009. Those rules would ex­tend to Time Warner cus­tom­ers if the mer­ger is ap­proved.

“Net­flix should be trans­par­ent that its opin­ion is not about pro­tect­ing the con­sumer or about net neut­ral­ity,” Jen­nifer Khoury, Com­cast’s seni­or vice pres­id­ent of cor­por­ate and di­git­al com­mu­nic­a­tions, wrote Monday. “Rather, it’s about im­prov­ing Net­flix’s busi­ness mod­el by shift­ing costs that it has al­ways borne to all users of the In­ter­net and not just to Net­flix cus­tom­ers.”

The pro­posed mer­ger has at­trac­ted a great deal of reg­u­lat­ory scru­tiny and is cur­rently un­der re­view by the FCC and the Justice De­part­ment.

What We're Following See More »
‘PULLING A TRUMP’
GOP Budget Chiefs Won’t Invite Administration to Testify
1 days ago
THE DETAILS

The administration will release its 2017 budget blueprint tomorrow, but the House and Senate budget committees won’t be inviting anyone from the White House to come talk about it. “The chairmen of the House and Senate Budget committees released a joint statement saying it simply wasn’t worth their time” to hear from OMB Director Shaun Donovan. Accusing the members of pulling a “Donald Trump,” White House spokesman Josh Earnest said the move “raises some questions about how confident they are about the kinds of arguments that they could make.”

Source:
A DARK CLOUD OVER TRUMP?
Snowstorm Could Impact Primary Turnout
1 days ago
THE LATEST

A snowstorm is supposed to hit New Hampshire today and “linger into Primary Tuesday.” GOP consultant Ron Kaufman said lower turnout should help candidates who have spent a lot of time in the state tending to retail politicking. Donald Trump “has acknowledged that he needs to step up his ground-game, and a heavy snowfall could depress his figures relative to more organized candidates.”

Source:
IN CASE OF EMERGENCY
A Shake-Up in the Offing in the Clinton Camp?
23 hours ago
THE DETAILS

Anticipating a primary loss in New Hampshire on Tuesday, Hillary and Bill Clinton “are considering staffing and strategy changes” to their campaign. Sources tell Politico that the Clintons are likely to layer over top officials with experienced talent, rather than fire their staff en masse.

Source:
THE LAST ROUND OF NEW HAMPSHIRE POLLS
Trump Is Still Ahead, but Who’s in Second?
10 hours ago
THE LATEST

We may not be talking about New Hampshire primary polls for another three-and-a-half years, so here goes:

  • American Research Group’s tracking poll has Donald Trump in the lead with 30% support, followed by Marco Rubio and John Kasich tying for second place at 16%. On the Democratic side, Bernie Sanders leads Hillary Clinton 53%-41%.
  • The 7 News/UMass Lowell tracking poll has Trump way out front with 34%, followed by Rubio and Ted Cruz with 13% apiece. Among the Democrats, Sanders is in front 56%-40%.
  • A Gravis poll puts Trump ahead with 28%, followed by Kasich with 17% and Rubio with 15%.
×