When Netflix struck a deal with Comcast to have a better connection, it insisted that the deal had nothing to do with net neutrality. Now, a month later, Netflix CEO Reed Hastings has switched his stance and is doubling down on the importance of net neutrality by calling out Comcast, Verizon, and other Internet service providers (ISPs) who have allegedly slowed down data connections.
Net neutrality has been a major topic since January, when existing Open Internet laws were struck down as a result of Verizon’s win against the Federal Communications Commission (FCC). At that time, an appeals court sided with Verizon and overturned the FCC's net neutrality laws that had been in place to prevent ISPs from obstructing Internet traffic. Verizon had been engaged in a legal battle against the commission since it imposed its Open Internet rules in 2011, claiming that the rules overstepped the organization's boundaries.
Even though ISPs have promised to protect the Internet, Hastings says that since it agreed to pay Comcast, speeds to Netflix subscribers have improved, suggesting that Comcast previously infringed upon the basic principles of net neutrality.
The Bandwidth Issue
It appears that if an ISP were to limit the speeds to a Web site, it would be Netflix. A large portion, 30 percent to be exact, of the Internet’s bandwidth is now used up by Netflix subscribers. The more bandwidth that a data-intensive Web site uses, the more it costs ISPs, which is why a company like Comcast wants more money from the services that require a lot of data.
As it is harder to argue on the side of Netflix when considering the massive amount of bandwidth that its subscribers need, Hastings said that promoting net neutrality is necessary for smaller sites as well. “If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future," he said.
One of the major issues with the argument that has been put forward by ISPs is that technically, Netflix subscribers are the ones who are using the bandwidth. The 30 percent figure is a reflection of how many people are using Netflix, but if a new service were to come along that streams videos, it could then use just as much bandwidth. This means that when speeds are limited, people who pay their ISPs every month are the ones who suffer.
Hastings may be stepping up his fight for net neutrality, but Netflix will continue paying “tolls” to ISPs so that the consumer experience is not degraded any farther. "Netflix believes strong net neutrality is critical, but in the near term we will, in cases, pay the toll to the powerful ISPs to protect our consumer experience," Hastings said.
Verizon has claimed that Netflix is “dumping” data onto its network, making it more costly to provide quick data connections to many of its customers. At the same time, Hastings said that the subscribers are the ones who are using the data.
“Netflix isn't "dumping" data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet. Netflix doesn't send data unless members request a movie or TV show,” he said.
There are valid concerns on both sides of the net neutrality debate, but the FCC may be coming out with new Open Internet laws and until then, it reserves the right to regulate ISPs on a case-by-case basis. Netflix is keeping all of its options on the table, and according to Hastings, that could even involve legal action, since paying Comcast, Verizon, and others, is not a long-term solution.