Netflix CEO Critical of Multiple Internet Providers

Netflix

Netflix CEO Reed Hastings on Thursday deeply criticized multiple Internet Service Providers (ISP) such as Comcast and Verizon. Hastings claimed that these internet providers were responsible for jeopardizing internet freedom and that customers deserved better. He went on to state that these providers were responsible for violating the rules of net neutrality.

Net neutrality by definition is the idea that internet service providers should not limit access to content or application irrespective of the source. It also states that these providers should not favor or even block any particular content provided by a website. These terms were breached when Netflix had to pay a higher amount to Comcast so that Netflix could stream their movies faster. Hastings said that such agreements should not be allowed and should not exist.

News about the agreement surfaced when earlier in February many noted that Netflix streaming speeds for customers using ISPs such as Verizon and Comcast were slowing down. Netflix soon after announced that they would enter an agreement with these internet providers and pay for better connections. Hastings however was keen to add that they were reluctant participants in the entire agreement.

These statements were made by Hastings on the company’s blogs and were the first to be made after the much controversial agreement between Netflix and Comcast was signed. Hastings wrote that most ISPs extort this toll simply because they can. They control access to millions of users and are willing to compromise the service to their customers just so that they can force websites like Netflix to pay. Hastings remained skeptical of the internet providers and criticized their decision to ignore the demands of their customers.

Hastings said that if a company as large and well known as Netflix is forced to pay for connections, imagine the predicament new and smaller businesses might find themselves in. The board at Netflix maintains that even though they are aware of the unfair demands made by these internet providers, they are willing to go along so as to not hurt their customer experience.

Comcast executive vice president said that claims made by Mr. Hastings were inaccurate and wrong. The open internet rules were never meant to be linked to internet interconnection or peering. All companies like Netflix have paid for their interconnection and that there is no other company that values net neutrality like Comcast. Big ISPs argue that given the huge amount of online traffic that Netflix generates, they should not be shocked when service providers ask for more in return for their service.

Hastings however maintained that Netflix is simply satisfying the requests made by the ISP users. If they do access Netflix in large amounts then they also pay a hefty monthly bill to the companies. These customers hence expect to receive uninterrupted service at the speed of which they pay irrespective of the content they view. Keeping that in mind internet service providers should not charge companies based on content alone.

Verizon when approached regarding the matter declined to respond whereas AT&T and Time Warner Cable did not respond at all. Comcast stated that they are happy that Netflix and them were able to arrive at cordial solution. As Hastings continues to criticize multiple internet service providers for their biased actions, it is still not clear if even he just like Comcast considers the agreement, cordial.

By Hammad Ali

Source:
USATODAY
NYTIMES
CNNMoney

7 Responses to "Netflix CEO Critical of Multiple Internet Providers"

  1. Leonardo Zachary   March 21, 2014 at 8:10 am

    “Comcast executive vice president said that claims made by Mr. Hastings were inaccurate and wrong. The open internet rules were never meant to be linked to internet interconnection or peering.”- Yet if the consumer already pays 100% for the connection which gives Comcast a good profit, then this extra layer of payment should be viewed as a) double-dipping; b) subsidizing pay-TV or c) given lack of competition, Comcast can charge any price.

    Reply
  2. bob morso   March 21, 2014 at 5:20 am

    “Comcast stated that they are happy that Netflix and them were able to arrive at cordial solution.”

    think you’ll find, hammad, that the correct english here is “netflix and they.”

    Reply
  3. Harry Covington   March 21, 2014 at 4:16 am

    Reading this, one might think it’s all about the $$$…you know, get as much as you can however you can. AT&T has proved themselves to be nothing but gangsters, charging rates according to competition in your area. Anywhere they have a monopoly, the rates go up. Don’t believe me? Try getting a price for service without first giving an address. To make the service even more criminal, if they know they are your only choice, forget getting service when there is a problem with their old hardware. I live in a small and remote neighborhood that had the installation done more than forty years ago. When my speeds dropped in half because the old plastic box that housed the wires had a hole in the top and filled with water every time it rained. They refused to send a repair man, saying they considered my speeds “acceptable”. I finally called at 4 AM, reached a service center in Manila, begged and pleaded till a supervisor there approved a repair. Once the box was replaced, the corrosion cleaned, my service was restored to what I was paying for. It took two weeks.

    That said, Netflix flexing it’s muscle by having series auto-play, is not helping matters. Being charged an extra 10 bucks by AT&T for going over the 150 gig limit is bad enough without Netflix continuing to pump data when you fall asleep while watching at night. I wonder how many billions of gigs are wasted because of this.

    Reply
    • Michael L.   March 21, 2014 at 4:36 am

      The 150GB limit on DSL is why I switched back to cable internet. That, and the prices were about even for much faster service. As for the auto-play thing, Netflix usually prompts me if I’m still there after a couple of hours of streaming… this is on Playstation 3 and Playstation 4 tho. Not sure what you’re using!

      Reply
  4. Robert Pealton   March 21, 2014 at 3:48 am

    What Netflix and the rest of the world thinks is irrelevant. ISPs don’t care what you think as long as you pay. ISPs only speak money. Until net neutrality is law with really BIG teeth ISPs will continue to charge as much as they can because they can.

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  5. Ol'Salt   March 21, 2014 at 3:16 am

    Internet providers are breaking the bank on everyone by, charging $70.00+- per month for internet service, then extra fees for faster connections. This is the equivalent of the auto companies charging car owners for their tires, then charging more for the speed of your car. Many have waited for the FCC to address this over charging practice; but perhaps many who sit in a legislative seat in Washington have provider stocks in their investment portfolios, for all calls for a clampdown, have fallen on deaf ears. For the amount of two ended profiteering, meaning, charging advertisers at one end, then charging internet users at the other, there can be no excuse for this practice, except greed. The American people deserve better for their money. Internet service, should be free, as was expected at the onset of cable; remember the statement “We will have television, without commercials, because, it will be already paid for, by our monthly bill”. In mid 1985 I lived and worked in Montreal Canada, which ‘at that time’ had a cable service and ‘interactive’ programing provided to all its customers. After returning back to the states and hooking up to our low standard of cable services, I was immediately convinced, that service providers in this USA, were conspiring to pray upon the American public, with overpricing and little, if any advanced applications. That was 1985, in the country, just next door!. Internet, should be free to hook up to, for amount of revenue already gleaned by double charging customers, period. The American public deserves much better, than open, unabashed thievery, that weakens the country and usurps the economies of average people overall; not to forget the retired elderly especially.

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  6. Robert   March 21, 2014 at 2:05 am

    Netflix is correct; the ISPs are running unregulated monopolies; they are ramping up internet fees to replace the profits they are losing as customers cancel TV service in favor of streaming video. The FCC should re-define internet service as a telecommunications service and establish regulations for service speeds, reliability and rates – with a defined rate-of-return for the ISPs. Americans are paying higher rates for slower internet speeds than most western countries because our government has not stepped up to managing the natural monopoly of wired broadband service.

    Reply

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