March 21, 2014
In a blog post yesterday, Netflix CEO Reed Hastings said that broadband providers should be required to connect their networks to major content providers (including Netflix) free of charge. Hastings issued a call for new rules that would prevent broadband providers like Comcast from charging content companies fees to connect directly to their networks (a practice referred to as “paid interconnection” or “paid peering”). Netflix recently struck such a deal with Comcast to improve its video service for subscribers.
“While both sides have characterized the payments as relatively small, it is the principle of paid peering that concerns Netflix in the long term,” reports The Wall Street Journal. “Hastings said such deals could open the door for Internet service providers (ISPs) to charge Netflix and other content providers escalating fees to reach consumers.”
“If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future,” wrote Hastings on the Netflix Blog.
Hastings framed peering as vital to net neutrality: “Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service… 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.”
While Verizon convinced the U.S. Court of Appeals to dismiss the Federal Communications Commission’s net neutrality rules earlier this year, FCC Chairman Tom Wheeler has suggested he will issue new rules in the coming months.
“Netflix has urged the FCC to ensure that its new net neutrality rules cover peering,” notes WSJ. “In addition, Netflix could push for the FCC to mandate free peering as a condition for approval of Comcast’s $45 billion acquisition of Time Warner Cable.”