ISPs Say ‘They Are Afraid’ Netflix Will Start Charging Them For Access

In a recent filing with the FCC by The National Cable & Telecommunications Association (which represents Time Warner Cable, Comcast, and other broadband providers throughout the U.S.) the trade groups claims that ISPs are worried that Netflix will start charging them for access. Ironically Comcast and Verizon are currently in deals with Netflix to provider faster access to their customers.

While the net neutrality debate has focused primarily on whether ISPs should be able to charge companies like Netflix for faster access to their customers, cable companies are arguing that Netflix holds the market power to charge them.

Here is what the group told the FCC in its filing:

Even if broadband providers had an incentive to degrade their customers’ online experience in some circumstances, they have no practical ability to act on such an incentive. Today’s Internet ecosystem is dominated by a number of “hyper-giants” with growing power over key aspects of the Internet experience—including Google in search, Netflix and Google (YouTube) in online video, Amazon and eBay in e-commerce, and Facebook in social media.

If a broadband provider were to approach one of these hyper-giants and threaten to block or degrade access to its site if it refused to pay a significant fee, such a strategy almost certainly would be self-defeating, in light of the immediately hostile reaction of consumers to such conduct. Indeed, it is more likely that these large edge providers would seek to extract payment from ISPs for delivery of video over last-mile networks.

The ISPs seem to be saying that it will have to negotiate deals with Netflix similar to the deals that they currently have to negotiate with networks…

Netflix CEO Reed Hastings noted in an earnings call this week that "the question comes up—should we over time be charging ISPs for the privilege of carrying our data to their customers, and charging for that?"

His answer for now seems to be an emphatic "no."

"I think the Internet really has this different, much more open architecture than classic cable, where we meet in the middle, we bring the bits to where they want, we don't charge them, they don't charge us," Hastings said. "Both sides innovate. It's very open structure, and I think then you get more competitors for Netflix frankly, but what you get is this open vibrant system that the Internet has been so famous for, and that's really the tradition that we grew up in, and that we're trying to see carry forward, and I'm optimistic about it, frankly."

Meanwhile TWC calls this whole idea about ISPs charging Web services for "fast lanes" a "red herring,"

"To TWC’s knowledge, no broadband provider has expressed any intention of prioritizing one class of Internet traffic at the expense of another," the company wrote. "If anything, it is more likely that some content owners might well seek payment from broadband Internet access providers as a condition of delivering their content—paralleling the business model that already exists on MVPD [multichannel video programming distributor] platforms. The Commission should not turn a blind eye to actual marketplace dynamics in developing open Internet protections."

Source: Ars Technica

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