The Cable Industry Wants Netflix Investigated… For Throttling Itself

Too Much Free Time

from the blowhards-and-fisticuffs dept

Netflix’s criticism of usage caps and vocal support of net neutrality (not to mention its threat as a pay TV competitor) has helped it replace Google as public enemy number one for the telecom industry. As such, every PR, lobbying, and political asset at the telecom industry’s disposal has taken aim at the streaming giant over the last few years, accusing the company of being a dirty freeloader and horrible hypocrite that’s unfairly lobbying the government to attack poor, honest, hardworking companies like AT&T and Comcast.

So when Netflix announced last week it was throttling the connections of AT&T and Verizon customers, the telecom industry’s various policy tendrils quivered in collective orgasm at the fresh opportunity for attack.

As noted last week, offhand comments by T-Mobile CEO John Legere appear to have forced Netflix to admit that it has been throttling AT&T and Verizon wireless customers back to 600 kbps. This was, the company insists in a blog post, an attempt to help out users stuck on metered plans with low usage caps and high overage fees. More curiously perhaps, Netflix also admitted that it hasn’t been throttling connections for users on Sprint and T-Mobile, because “historically those two companies have had more consumer-friendly policies” (read: they offer unlimited data plans).

Netflix’s revelation quickly resulted in AT&T, a company that has throttled customers and lied about it for years, insisting it was “outraged” by the revelation (since obviously Netflix’s decision would have cost it user overage fee penalties). The American Cable Association, a coalition of hundreds of smaller cable companies (but with Comcast NBC Universal also as a member) took things one step further, issuing a statement demanding an FCC investigation into Netflix’s behavior:

“ACA has said all along that this Federal Communications Commission’s approach to Net Neutrality is horribly one-sided and unfair because it leaves consumers unprotected from the actions of edge providers that block and throttle lawful traffic. The FCC’s disclosure rules also fall short by covering ISPs but allowing edge providers to affect consumers’ Internet experience in the same ways that ISPs’ actions can. And now we see further evidence of these shortcomings in Netflix’s confession that it has been engaging in covert video throttling to select groups of consumers.”

“ACA is disappointed, but not surprised, that Netflix used its immunity from the FCC’s Net Neutrality rules to engage in this practice. Netflix has the ability and incentive to engage in this anti-consumer behavior notwithstanding its impact on the virtual cycle that promotes the broadband deployment sustaining Netflix’s business model. In light of this revelation, ACA calls on the FCC to initiate a Notice of Inquiry into the practices of edge providers and how these companies can threaten the openness of the Internet. Under Section 706, the FCC has the authority to conduct such an inquiry and issue regulations, should it be deemed necessary.”

There’s obviously a few things wrong with that statement. One, it’s not a net neutrality violation if you’re throttling yourself, that’s just vanilla stupid. Two, net neutrality rules were applied to the broadband industry because of limited competition. If there was competition, users could punish bad behavior by switching ISPs, making the rules unnecessary. Net neutrality rules weren’t applied to edge content companies because users actually have a choice of options there. The same can’t be said for the broadband industry, where most are lucky to have the choice of one ISP that can provide anything resembling next-gen connectivity.

If there’s one thing that Netflix can be dinged for, it’s for lecturing ISPs on transparency, then failing to reveal that this was even happening. And thanks to competition, anybody bothered by that (and that’s not many, since nobody noticed what Netflix was doing for five years) has the choice of switching streaming video providers. But an investigation into a company for effectively throttling itself? The cable industry either doesn’t actually understand how net neutrality works, or it’s feeding the public a line of bullshit, trying to saddle Netflix with regulations it just spent the last decade trying to argue weren’t necessary in the first place.

Filed Under: competition, net neutrality, throttling, transparency, video streaming
Companies: american cable association, at&t, comcast, netflix, t-mobile