Netflix Takes Aim at Usage Based Billing

Netflix said recently that it is not pleased with Internet service providers looking for new ways to charge users by the amount of data they use. Of course Internet service providers claim that they have to switch from flat-rate monthly data fees to usage-based pricing models to pay for network upgrades and prevent consumer congestion.

"Wireline bandwidth is an almost unlimited resource due to advances in Internet architecture," Netflix General Counsel David Hyman wrote in a recent Wall Street Journal editorial.

Netflix has argued against usage-based billing in Canada (as have consumers) and in the U.S. it has complained to the Federal Communications Commission that UBB could curb Internet use or leave consumers with confusing bills and penalties for going over their limits.

"With online-content delivery providers like Netflix and voice services like Skype experiencing explosive growth, competitors see consumption-based billing as a convenient way to slow that growth by making the use of online services more expensive," he added.

Hyman went on to write that the cost of adding an extra gigabyte of data is about one penny for ISP’s.

Naturally Netflix has a vested interest in this topic because usage-based billing could curtail usage of its popular service. Given that a good portion of Internet traffic is being used to stream movies over the service via various platforms, it makes sense that usage based billing schemes by ISP's could cut into Netflix traffic.

Source: Washington Post by way of Free Press