Netflix Slams AT&T, Comcast and TWC for Not ‘Fairly’ Applying Data Caps

Netflix seeks a “corporate net neutrality plan,” said a foe of net neutrality rules whose group the three ISPs belong to. CEO Reed Hastings has in particular slammed Comcast for not counting under broadband data limits cable channels sent by Internet Protocol to Microsoft’s Xbox 360 videogame consoles (CD May 7 p5). In Netflix executives’ meeting Tuesday with top FCC lawyers and technologists, the company noted that AT&T and Comcast excuse Xbox video from data caps, while Time Warner Cable doesn’t include what’s sent to its iPad app.

"Broadband caps should be applied fairly to all online video sources or eliminated entirely,” Netflix reported (http://xrl.us/bm6ymw) executives told FCC General Counsel Austin Schlick, Chief Technology Officer Henning Schulzrinne and others. “If the first bit over the cap is not a Comcast, AT&T, or TWC bit, it’s blocked (or differentially priced)” for some content, Netflix said in a slide that was part of 14 shown to more than a half-dozen commission staffers. AT&T, Comcast and Time Warner Cable spokespeople had no comment. Netflix last made an oral lobbying presentation to commission staff in the summer of 2010 (http://xrl.us/bm6ytt) seeking ISP nondiscrimination of video content in the agency’s review of Comcast’s purchase of control of NBCUniversal, and last visited the agency in May of that year (http://xrl.us/bm6ytx), filings show (http://xrl.us/bm6yyd). Netflix also in 2010 hired its first full-time Washington employee and that year made its first FCC filing (CD Nov 15/10 p6).

"What’s wrong with a ‘free service'” is that it’s “economically irrational or anti-competitive,” said a slide Netflix showed FCC officials (http://xrl.us/bm6ytp). “Differential treatment of affiliated services” is “opaque to consumers” and the “extent of and justification for differential treatment has not been publicly disclosed,” a slide said. The three ISPs’ services don’t fall under Title VI of the Communications Act, which covers cable programming, because they “share last-mile capacity with broadband Internet access services” and “depend on broadband Internet access services for operation and delivery,” a slide said.

Netflix “isn’t in need of public assistance,” Netcompetition.org Chairman Scott Cleland wrote on the group’s blog Wednesday. “It is America’s video subscription leader with 23 million subscribers.” The company “flexed its exceptional pricing power last year in raising its prices 60 percent without losing many subscribers,” he continued. A company spokesman had no comment on the post from Cleland, whose group also includes CTIA, NCTA and USTelecom as members (http://xrl.us/bm6yta). “Netflix’ net neutrality plan is a shameless Washington plea for corporate welfare via Government price regulation of privately-owned broadband networks so Netflix’ uniquely voracious 33 percent usage of the Internet’s traffic peak does not cost Netflix anything!” Cleland wrote (http://xrl.us/bm6yti). “Netflix’s view of net neutrality effectively would ban innovation on devices (including set-top boxes and remote controls) and on the network (including bandwidth management and new business models) so that there can only be innovation by apps providers like Netflix.” The commission’s 2010 net neutrality order “expressly” allows private managed data services, Cleland noted.