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Netflix CEO slams fading net neutrality, interconnect deals with ISPs
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Mar 21, 2014, 07:41 AM
Netflix CEO Reed Hastings has penned a harshly-worded post on the official Netflix blog, and has blasted the state of US net neutrality, and in part, peering deals that the video streamer has struck with large ISPs. Hastings says that deals are in place, with more coming, but the toll to ISPs is being paid "reluctantly" and only to "ensure a high quality member experience."

Hastings lays out his case for net neutrality and the lack thereof affecting his service, saying that "some major ISPs, like Cablevision, already practice strong net neutrality and for their broadband subscribers, the quality of Netflix and other streaming services is outstanding. But on other big ISPs, due to a lack of sufficient interconnectivity, Netflix performance has been constrained, subjecting consumers who pay a lot of money for high-speed Internet to high buffering rates, long wait times and poor video quality."

Nodding at the recent deals to allow Netflix traffic unfettered access to networks, Hastings says that "once Netflix agrees to pay the ISP interconnection fees, however, sufficient capacity is made available and high quality service for consumers is restored. If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

No-fee interconnection is common in the Internet industry. The large networks agree to allow it between each other, as generally speaking, the "same amount of data comes and goes between their networks." However, when Hastings suggested a similar peer-to-peer connection model, where Netflix traffic would upload as much as it would download, the company was met with "an uncomfortable silence."

There is no easy solution to the problem either on a industrial or governmental level, and Hastings knows this. He notes that "in the near term, we will in cases pay the toll to the powerful ISPs to protect our consumer experience." Pointing to his deal with Comcast having fixed the Netflix congestion problem, he notes that "a few weeks ago, we agreed to pay Comcast, and our members are now getting a good experience again."

Hastings believes that "Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service. The big ISPs can make these demands -- driving up costs and prices for everyone else -- because of their market position." Critics of the deals refer to them as simple blackmail schemes foisted on Netflix by carriers who don't apply the surcharge to other (particularly their own) on-demand video services. Proponents of the fees point out that Netflix, by virtue of the nature of its service and escalating popularity, requires larger-than-ordinary amounts of bandwidth in order to stream video, yet contributes little directly to needed capacity infrastructure.
( Last edited by NewsPoster; Mar 22, 2014 at 09:59 PM. )
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Mar 21, 2014, 11:26 AM
While I understand they "paid the toll to protect consumer experience" I think that just sets the precedent for more abuse by near-monopoly ISPs. Either you pay us or your customers leave you because we make their end-user experience terrible.

I would have preferred Netflix to prepare a kit of information with the PR department that fairly detailed the cause for the decrease in quality and give them addresses, emails, and phone numbers of individuals (both ISPs and legislators) to contact to voice their complaints. As soon as the end-user experience is fixed...they no longer care about Net Neutrality because they don't realize it affects them.
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