I wrote about this recently regarding Senator Al Franken (D. MN):
http://www.startribune.com/...
Franken reached out to Netflix to gauge the company's thoughts on "interconnection" -- the process by which content flows from providers through cable companies to consumers. He worries that the proposed merger would give Comcast enough power to act as a gatekeeper for traffic on the Internet.
Franken has been fighting the possible merger from his post on the Senate Judiciary Committee saying it will be bad for consumers and will result in fewer cable choices and higher prices.
Ultimately, the Justice Department and the Federal Communications Commission will make a decision on it. Franken likes to point out there are 100 some lobbyists working to make it happen in Washington, D.C.
From its own business perspective, Netflix obviously has interest in getting as many Americans as possible access to a high-speed Internet line, through which they could buy a streaming service. Netflix says about 70 percent of Americans have access to two, at best, options for fast enough Internet to stream video content. - Star Tribune, 4/24/14
And the Netflix folks did respond and helped Franken make his argument:
http://www.cnn.com/...
In its second such complaint this week, Netflix told U.S. Sen. Al Franken that Comcast's takeover of Time Warner Cable would give the merged cable behemoth the leverage to extract higher fees from content providers, costs that would ultimately be passed on to consumers.
"The proposed merger will result in online video content providers paying higher prices for access to Comcast customers or delivering poorer service to customers who depend on Comcast for broadband access," wrote Netflix Vice President Christopher Libertelli in a letter to Franken.
"Ultimately, competition and consumers will suffer," he continued in the letter, made public by Franken's office Thursday. "That is why Netflix opposes the merger."
Netflix's letter to Franken came on the heels of its Monday letter to shareholders, in which CEO Reed Hastings and CFO David Wells argued a merged Comcast-TWC could "charge arbitrary interconnection tolls for access to their customers." - CNN, 4/24/14
Here's a little more info:
http://www.latimes.com/...
Noting that a Comcast-Time Warner Cable combination would have a 40% share of broadband subscribers, including 19 of the nation's 20 biggest cities, Netflix Vice President Christopher Libertelli said the proposed merger "will result in online video content providers paying higher prices for access to Comcast customers or delivering poorer service to customers who depend on Comcast for broadband access."
Netflix was responding to a letter Franken sent the company last week seeking its input on Comcast's plans to acquire Time Warner Cable. Franken is on the Senate Judiciary Committee, which held a hearing about the sale two weeks ago.
In February, Netflix reached a deal to pay Comcast in return for a direct connection to the cable giant's broadband network. Previously, Netflix paid third-party providers for such access to Comcast's network.
But since that agreement, Netflix has been vocal in its criticisms of Comcast and suggesting that if it hadn't agreed to pay, its customers would have received an inferior product.
"By degrading consumers' experience, Comcast can demand that content providers pay them a toll to avoid congestion and reach their captive subscribers," Libertelli wrote. "If content providers cannot effectively reach Comcast subscribers, they cannot compete." - LA Times, 4/24/14
Of course the Comcast people shot back against Netflix's argument:
http://variety.com/...
In a statement issued Thursday, Comcast’s Jennifer Khoury said that “Netflix’s argument is a House of Cards.”
“As we and other industry observers have already noted, Netflix’s decision to reroute its Internet traffic was all about improving Netflix’s business model,” she said in a statement. “While it’s understandable for Netflix to try to make all Internet users pay for its costs of doing business (as opposed to just their customers), the company should at least be honest about its cost-shifting strategy.”
She noted that Comcast has many other agreements like the one with Netflix, as have other Internet providers. “And those agreements have not harmed consumers or increased costs for content providers. If anything, they have decreased the costs those providers would have paid to others,” she said. - Variety, 4/24/14
Folks at Netflix have been expressing their concern about this merger before Franken was able to get them to make their statement:
http://www.baltimoresun.com/...
Netflix made a similar point in a blog post on Thursday.
"We're very concerned that a combined Comcast-TWC will place toll taking above consumer interests," wrote Ken Florence, vice president of content delivery at Netflix. "Comcast is double dipping by getting both its subscribers and Internet content providers to pay for access to each other."
Netflix streaming accounts for nearly one-third of all Internet traffic in North America during peak times, according to research by broadband networking equipment company Sandvine Corp. - Baltimore Sun, 4/24/14
I wanted to bring this story up because Franken really does deserve praise for leading on this fight. With net neutrality on life support, hopefully other tech companies and streaming services like Netflix will speak out more. Franken certainly deserves to be re-elected to the U.S. Senate. Click here if you would like to donate and get involved with Franken's re-election bid:
http://www.alfranken.com/...