According to Reed Hastings, the CEO of Netflix, net neutrality regulation must increase in strength and breadth of coverage — an opinion that seems like the obvious one Hastings would have, given his role as the head of a vastly popular content provider. But a specific event has brought Hastings to the point of formally declaring his views on net neutrality: Netflix’s deal with Comcast, signed in February.
VISUAL CONTEXT: MEASURING BROADBAND IN THE U.S.
Hastings has penned an essay on the Netflix blog describing the issue at hand as a result of Netflix’s deal with the internet service provider (ISP) that was designed to provide better interconnection at the portal between Netflix’s servers and Comcast’s network. Traditionally, the better interconnection exacts a price from content providers so that ISPs do not have to bear the brunt of handling all of the traffic costs of the many users who want access to the content provider’s content. But Hastings describes what happened after Netflix agreed to pay the costs for better interconnection as having an effect on the direct-end connections to consumers — a provision not in the deal signed between the two companies. He argues — after witnessing Comcast’s opening-up of the direct-to-user stretch of connection after being paid by Netflix for the front-end connection — that there is a clear need for strong net neutrality regulation. He sees the need for rules that will ensure the fair relationship between what content providers pay for, and what ISPs deliver to consumers.
Hastings explains the effect that lack of regulation could have on smaller companies as well:
Once Netflix agrees to pay the ISP interconnection fees, however, sufficient capacity is made available and high quality service for consumers is restored. If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future. Roughly the same arbitrary tax is demanded from the intermediaries such as Cogent and Level 3, who supply millions of websites with connectivity, leading to a poor consumer experience.
He makes some important points — ones that Comcast’s EVP David Cohen has, in turn, flouted. According to The New York Times, Cohen describes peering and interconnection as not under the auspices of net neutrality, and therefore not relevant to the regulation argument. Perhaps Hastings is suggesting they should be.
The Federal Communications Commission certainly has a doozy on its hands with regard to drafting new regulation that will effectively support the needs of content providers, the many users calling for the maintenance of the “free and open internet”, and all without stepping on the toes of ISPs.