FCC Commissioner Pai Continues His Strange, Somewhat Incoherent Assault On Netflix

from the what-the-hell-are-you-talking-about dept

Netflix’s vocal support of Title II, criticism of usage caps and, most recently, its complaints about the use of interconnection as an anti-competitive weapon have made the company policy enemy number one among the nation’s biggest ISPs. As part of an attempt to undermine Netflix, these ISPs (with Comcast leading the charge) have been using their lobbyists, fauxcademics, and various policy folk to try and portray the streaming company as a dirty freeloader and a nasty company that is really the one to blame for most of the Internet’s problems.

Joining this chorus last month was FCC Commissioner Ajit Pai, who in a bizarre letter to Netflix (pdf) tried to paint Netflix as a hypocrite on net neutrality. To accomplish this, Pai pretended (one hopes) he didn’t know what a content delivery network (CDN) was, and that Netflix’s creation of its own CDN is somehow the same thing as creating Internet “fast lanes.” Pai also oddly tried to claim that because Netflix refused to join a new streaming video coalition spearheaded by Netflix critics like Comcast and Charter — that this was somehow proof positive that Netflix was against “Internet openness.”

Pai’s sudden interest in streaming video fairness was particularly strange coming from a former Verizon regulatory lawyer turned FCC Commissioner who repeatedly turns a blind eye to broadband industry competition and consolidation woes. Still, Netflix played along, and in both a letter and during personal visits explained to Pai that the company’s Open Connect CDN isn’t a “fast lane,” is free to use, and its peering locations, guidelines, hardware design and open source software components are all pretty plainly documented.

Trying to get more mileage out of his attack, Pai is now pretending that Netflix “refused” to answer many of his questions. In a press release (pdf) issued by the Commissioner, Pai again insists that Netflix is somehow “undermining the development of open standards for Internet video.” His evidence? Again, it’s the fact that Netflix runs its own “Open Connect” CDN, and encrypts certain CDN URL structures to help protect consumer streaming behavior from third-party observation. This is, Pai insists, proof positive that Netflix has been incredibly naughty:

“In order to test the validity of this assertion, I then asked Netflix to respond to the allegation that it had rolled out its new encryption protocols by first targeting those ISPs that had installed open caching appliances. The company assured me that this was not true and agreed to submit information after our meeting that would disprove this charge.

One month later, that commitment remains unfulfilled. When my office reached out to Netflix for the information (in particular, which ISPs were targeted on which dates), the company refused to turn it over. I am disappointed and perplexed by this decision. If Netflix did not target those ISPs using open caching, why would it withhold information that would disprove this allegation? I hope that the company will reconsider its position and supply the facts that would resolve this matter once and for all.”

Pai forgets to note that Netflix’s “Open Connect” CDN is completely free, and benefits both Netflix and ISPs alike by making streaming more efficient. He also somehow omits to mention that incumbent ISPs refused to sign on to this CDN, something Netflix and Level3 have claimed was part of a plan to force Netflix to pay steep new interconnection fees (this is all currently being investigated by Pai’s colleagues at the FCC). While I’ve noted that Netflix absolutely needs to be more transparent regarding the interconnection feud, its transparency practices are a far cry from the kind of obfuscation incumbent ISPs have been engaging in for years (which you’ll note Pai has spent the lion’s share of his tenure turning a blind eye to).

Basically, Pai is conflating a bunch of issues, ignoring a bunch of others, and demanding a response to inquiries that can’t really be answered because they don’t make any coherent sense. In his closing paragraph, Pai makes it clear he’s not looking for anyone to do anything about Netflix’s villainy, he just basically wanted to make Netflix look stupid with a “gotcha” that isn’t much of a gotcha at all:

“To be clear, I do not favor additional FCC regulation in this area. However, if a company asks the FCC to impose public utility-style regulation on every broadband provider in the country in the name of preserving the open Internet but then selectively targets open video standards to secure a competitive advantage over its rivals, it should be called to account.”

Netflix has since responded stating it answered all of Pai’s questions and that Pai “appears to be targeting us because he disagrees with our Open Internet advocacy, not because of our efforts to protect member privacy.” Pai apparently hoped that his criticisms would somehow undermine the credibility of a Title II supporter, but in the process he only really succeeds at making a public official look petty, incompetent, or a delicate combination of both.

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Companies: netflix

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Comments on “FCC Commissioner Pai Continues His Strange, Somewhat Incoherent Assault On Netflix”

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Anonymous Coward says:

‘Netflix….is really the one to blame for most of the Internet’s problems.’

if Google is added into the frame, then there is nothing else that can be blamed for all the wrongs etc that happens on the ‘net. i must say though it’s a change to not have Google right up at number 1 for the cause of all internet ills!!

Violynne (profile) says:

Pai’s sudden interest in streaming video fairness was particularly strange coming from a former Verizon regulatory lawyer turned FCC Commissioner…
I stopped reading right there, and I wouldn’t be surprised if I were the only one.

I’m sure the rest of the article debunked what he had to say, but for me, reading anything he said is a complete waste of my time.

There’s nothing to debunk when you know the source is always wrong.

Derek Kerton (profile) says:

“Netflix….is really the one to blame for most of the Internet’s problems.”


“Netflix….is really the one to blame for most of the Internet’s Service Provider’s market demand.”

There. Fixed that for him. Essentially, Netflix isn’t stealing anyone’s slice, it’s just growing the Pai. I’d estimate by a factor of about 3.14.

Anonymous Coward says:

There is no such thing as “Open Video Standards” in reality everyone has their own custom system. Netflix, Youtube etc.

There is HTML5 standards which are guidelines that do not need to be followed.

Netflix encrypts in order to hide certain URL strings from caching appliances that would be used by ISP’s in an analytical fashion in order for the ISPs to tell who watches what so they can use (steal) that information for themselves. Netflix uses encryption to protect this info. Its pretty cut and dry. It actually has little to do with speed.

John Fenderson (profile) says:

Re: Re:

“There is HTML5 standards which are guidelines that do not need to be followed.”

Technically, almost all standards are guidelines that that do not need to be followed unless you expect to correctly work with things made by other people or you have some sort of contractual obligation. This is particularly true for internet standards, where literally all of them are just guidelines. /pedant

Dan Rayburn (user link) says:

i am not a "lobbyist" or "policy" person

Karl, you link to my blog twice in the post, but both times, classify me as something that is not accurate.

Linking to my first post in the same sentence as a “lobbyists” and “policy folk” is wrong. I am neither. I am simply a blogger like you. I don’t work for any ISP/MSO and I am not involved in anything policy related. In fact, I turned down an invite from the U.S. House Committee on the Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law, to be a witness at the Comcast & Time Warner Cable merger hearing.

In the second link, you say that “Netflix refused to join a new streaming video coalition spearheaded by Netflix critics like Comcast and Charter”. I am not “spearheading” the Streaming Video Alliance. I didn’t come up with the idea and wasn’t involved in the creation of the organization. I am not the executive director. I was only recently asked to become a fouding member, and agreed to do so, because of the diversity of the group. You only mention Comcast and Charter to reinforce your point, yet neglect to mention that the SVA also has some of the largest content owners as founding members, including Yahoo, Fox Networks, EPIX and MLBAM.

I’m not suggesting you are anyone else has to agree with any of my blog posts, but referencing me as something I’m not, simply to try and reinfornce your point isn’t the way to do it. If you are going to reference me in your posts, please do so correctly.

John Fenderson (profile) says:

Re: i am not a "lobbyist" or "policy" person

“You only mention Comcast and Charter to reinforce your point, yet neglect to mention that the SVA also has some of the largest content owners as founding members, including Yahoo, Fox Networks, EPIX and MLBAM.”

To be fair, if he had mentioned those other members it would have made the SVA sound even more questionable. Out of curiosity, I looked at the complete member list for the SVA and I have to say that Karl actually went easy on this point. That member list is quite the rogue’s gallery.

Leonardo (profile) says:

The BIGGEST Net Neutrality Elephant is.....Retarnsmission Fees

Simple math and follow the money:
Retransmission fees are being subsidized by the growth in broadband subscribers.
PayTV bundles subscriber growth at best is flat and the cable cos have been bundling VOIP and other data services to prop up the bundled PayTV subsctiber model.
Keep in mind that broadband is not a telecommunication service contrary to all the various types of telecommunications that flow over WiFi which then flows over the fixed broadband line connection.
Which begets the question of how retransmission fees which are directly linked to payTV subscribers is projected to double their growth over the next 4 years. The simple math and answer is growth in retransmission fees is being subsidized by broadband subscriber growth. Put another way, retransmission fees have created their own fast lane but its not tied to capacity but to the revenue generated by other providers that use that capacity. If one is to have meaningful net neutrality this needs to be LOUDLY addressed as it is the biggest elephant in the room no one sees- the linkage of payTV subsidies to broadband.

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