Netflix Is No Longer Worried About Net Neutrality Now That It's Massive And Successful

from the sorry,-I-got-mine dept

Once upon a time, Netflix was among the fiercest supporters of net neutrality, and a consistent critic of arbitrary and unnecessary broadband usage caps. So much so that the company effectively became public enemy number one at many of the nation's broadband providers, resulting in a steady stream of bizarre policy and lobbying attacks on the company. Netflix, we were told by a rotating crop of ISP-tied mouthpieces (even by current FCC boss Ajit Pai), was a dirty freeloader, and a nasty company responsible for most of the internet's ills.

But as Netflix has grown larger and more powerful, the company's positions on usage caps and net neutrality has, well, softened.

Back in January, a company letter to shareholders downplayed the looming death of net neutrality, suggesting that Netflix was so popular -- any attack on it would be seppuku:

"Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable."

Of course, what Netflix actually meant was that it's now powerful and wealthy enough to go toe to toe with giant ISPs on interconnection and other disputes. The problem: while Netflix may now be strong enough to survive a world without net neutrality, that's not necessarily going to be true for the next Netflix. Smaller companies will absolutely be hampered by the rising spread of usage caps and zero rating, which as we've long noted are increasingly being used as anti-competitive weapons against them. And the current government has made it very clear that's perfectly ok.

Netflix CEO Reed Hastings reiterated the company's confidence on this subject in a meeting with reporters last week at the company's headquarters, where he insisted the company was "not too worried" about the government's plans to gut net neutrality:

"Netflix CEO Reed Hastings says he’s “not too worried” about what will happen if new FCC chairman Ajit Pai eliminates the Title II regulations that have guaranteed a neutral internet experience for US consumers in recent years.

Speaking to a group of journalists at Netflix’s headquarters in Los Gatos, California, earlier today, Hastings said he believes “the culture around net neutrality is very strong. The expectations of consumers are very strong. So even if the formal framework gets weakened,” he continued, “we don’t see a big risk actualizing, because consumers know they’re entitled to getting all of the web services."

Hastings believes that Netflix is just so damn popular, consumer outrage will magically keep ISPs on their best behavior even if Pai, Trump and the GOP kill all telecom consumer protections. But as we saw during recent interconnection feuds, ISPs have become clever at dodging blame for the congestion they intentionally caused in order to kill settlement-free peering and extract additional funds from transit and content companies (detailed in the New York AG's recent lawsuit against Charter). You'd be hard pressed to think that 10% of the population actually understood what was happening during these feuds.

That said, consumers, startups and people that care about a healthy, open internet should worry.

The new FCC has already killed an inquiry into zero rating, which means incumbent ISPs are now free to use caps to hamper competing streaming services. And with AT&T, Verizon, Comcast and Charter now effectively dictating government internet policy, you can be sure broadband competition issues will be placed on a far back burner -- resulting in a steady expansion of usage caps and overage fees. And Congress is cooking up one or more bills that will not only kill net neutrality and consumer privacy protections, but gut regulatory oversight of one of the least competitive industries in America.

But gosh, now that Netflix is large and successful (with 94 million subscribers worldwide), this is all just something that's apparently going to work itself out. We've tracked a similar trajectory at Google, where net neutrality principles slowly but surely disappeared as the company jumped into the wireless industry. With net neutrality's two biggest and wealthiest proponents wavering on net neutrality now that they've got theirs, the idea of an internet free of incumbent ISP control needs all the help it can damn well get.


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  • icon
    Ninja (profile), 23 Mar 2017 @ 6:20am

    Consumer outrage will sort it out. Until it doesn't. Because not all outrage in the world prevented things from deteriorating and clowns like Pai spewing foul waste every single time he opens his mouth to talk about important Internet related topics.

    Sit tight Netflix, this is going to bite you where it hurts the most: the pockets. Good thing you can survive the bite. But it's going to bleed.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 6:25am

    Cory Doctorow calls for a "Ulysses pact" to stop entities from doing this very thing.

    https://boingboing.net/2016/06/24/how-to-protect-the-future-web.html

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 6:28am

    You're slowly taking "a similar trajectory" to nearly everyone who looks at BIG business...

    that all businesses (and persons) should be kept limited, as used to be.

    Yes, you're aging out of "libertarianism". Late, but inevitable.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 6:29am

    You're slowly taking "a similar trajectory" to nearly everyone who looks at BIG business...

    that all businesses (and persons) should be kept limited, as used to be.

    Yes, you're aging out of "libertarianism". Late, but inevitable.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Mar 2017 @ 6:31am

      Re: You're slowly taking "a similar trajectory" to nearly everyone who looks at BIG business...

      How are they to be kept limited? I don't hear you ask as you elbow-jerk toward the "censor" button?

      With plenty of real regulation and HIGH income taxes.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 23 Mar 2017 @ 11:15am

        Re: Re: You're slowly taking "a similar trajectory" to nearly everyone who looks at BIG business...

        You can write books about these things and people should read up on it. Lay off fiction like Carl Marx and Ayn Rand and read some Adam Smith and John M. Keynes.

        Read Isayah Berlins beautiful definitions of negative and positive freedoms (A lot of the rest he wrote is less thought through).

        Read about debt bondage. Ulf von Lilienfeld-Toal has a good contemporate paper on a related topic (though not that beuatiful!).

        Read some stakeholder theory as a modern tool to understand political process.

        If you do that with an open mind, the more extreme end of libertarian ideals is looking far less attractive.

        reply to this | link to this | view in chronology ]

        • identicon
          vrandon, 23 Mar 2017 @ 4:32pm

          Re: Re: Re: You're slowly taking "a similar trajectory" to nearly everyone who looks at BIG business...

          Any person that advices to lay off on ayan rand should be viewed as untrustworthy and its people like that who are responsible for the current state of the planet

          reply to this | link to this | view in chronology ]

          • identicon
            Wendy Cockcroft, 24 Mar 2017 @ 8:21am

            Re: Re: Re: Re: You're slowly taking "a similar trajectory" to nearly everyone who looks at BIG business...

            You are kidding, right?

            It's the Ayn Rand "Selfishness is a virtue" ethos that is responsible for the state of the planet. She's not even an original thinker: Laissez-faire corporatism predates her writings, all she did was polish the turd.

            reply to this | link to this | view in chronology ]

  • identicon
    DoAsISayNotAsIDo, 23 Mar 2017 @ 6:59am

    Kind of similar to Google

    Seems there's a pattern, not just with Netflix but with companies like Google and others that were held in regard and then turned inward.

    It's like these companies are living beings... (let that sink in) that act in their best interests and turn their backs on society and community and all those that came before them that created the infrastructure, tools and opportunities for them to grow and grow and grow into pathological entities.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 7:29am

    Wait, you mean someone else is creating a barrier to entry for potential competitors FOR us? Damn right we have no problem with this!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 7:54am

    This shouldn't be a surprise. All companies support the idea of free competition and an even playing field when they're young and growing, and then once they become the dominant player, tend to switch over to lobbying for a more regulated environment in which to operate.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 8:05am

    "rotating crop of ISP-tied mouthpieces (even by current FCC boss Ajit Pai)"

    Redundant statement is redundant.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 8:13am

    I think Netflix may be in denial. The power pendulum is soon going to swing back towards incumbent telecoms and their ISP subsidiaries and it's going to swing far enough that it will threaten all content providers who are not one of those companies not directly connected to the incumbent ISPs. That includes Netflix. Consumers have almost no power thanks to sweetheart utility monopoly deals in nearly every muniticipality in the country and most people cannot vote with their feet, even when there's a choice of two ISPs because both of them will be incumbents and both of them will have data caps (legacy telephone v. legacy cable).

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 8:21am

    Net neutrality was always communism for the internet.

    reply to this | link to this | view in chronology ]

    • icon
      ShadowNinja (profile), 23 Mar 2017 @ 8:31am

      Re:

      And that's a bad thing why?

      Communism and Capitalism have a lot of the same core foundations (including support for free public education). Just because Communism failed doesn't mean all it's ideas were bad, 8 out of 10 of Karl Marx's core principles of communism are well practiced in all capitalist countries in the world.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Mar 2017 @ 8:35am

      Re:

      Counterpoint: No it isn't.

      Your move.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Mar 2017 @ 8:55am

      Re:

      Not at all, net neutrality is like the telephone rules, the provider of your line cannot decide who you can call, and similarly the provider of your Internet connection should not decide what sites you can visit.

      Without such rule, you communication provider can control your world view, by deciding what information sources yoy can use.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 23 Mar 2017 @ 11:02am

        Re: Re:

        Exactly.

        Not only distort your world view but also extort users (both consumers and businesses) for more and more money. ISPs are quickly becoming the one delivery mechanism through which we get access to all media and communications so that's obviously a lot of leverage.

        Funny thing. It's 2017 and if you live in the US you have more access to various dial-up providers than broadband providers. Let that sink in for a second.

        Now imagine if those same rules applied and everyone had access to 6 or 12 broadband ISPs that weren't geo-locked like landline ISPs are today. Providers would have to compete on things like actual speed (not "up to" speed), customer service, up time, etc., On no, what a horrible world where companies have to compete...

        reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 24 Mar 2017 @ 1:27am

      Re:

      In the sense that a lot of people who throw around both terms have no idea what they actually mean, but are scared of them because they've been told they're bad?

      Sounds about right.

      reply to this | link to this | view in chronology ]

      • identicon
        Wendy Cockcroft, 24 Mar 2017 @ 8:28am

        Cockcroft's Law

        The argument is invalidated when the word "communism" (or variant thereof) is used to shut down debate on the grounds that the opposing side must be in league with the boogeyman.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 8:38am

    "You'd be hard pressed to think that 10% of the population actually understood what was happening during these feuds."

    I doubt that 1/100 of 1% of the population has the intellectual capability and educational background required to even BEGIN to comprehend this -- even if it is explained to them using a fifth-grade vocabulary. The masses of inferior people out there are simply too dull, lazy, and ignorant to comprehend anything that doesn't fit in a tweet.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 2:15pm

    Technology to the rescue

    The internet sees capped connections as damage and routes around it:

    The next Netflix won't be using centralised Content-Delivery-Networks. It will be using decentralised protocols to route the traffic to the shortest path. Check IPFS.

    Add in a local neighbourhood mesh network to avoid ISP-lines whenever possible and there is your breeding ground for competition.

    Glad to help.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 3:41pm

    Just one of many reasons I canceled my subscription.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Mar 2017 @ 6:58pm

    Ajit, et al, were right. Netflix is a big nasty company. They were just wrong on the 'why'.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Apr 2017 @ 10:49pm

    It all started with Netflix cracking on "paying pirates" using VPNs.

    reply to this | link to this | view in chronology ]


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