Debunking Netflix’s attempt to rebrand interconnection negotiations as “Net neutrality”

Fresh on the heels of cutting a deal with Comcast that would cost less than the other options Netflix had for carrying its increasingly high-quality video to consumers, Netflix is now demanding it get carriage for all its traffic (now 31% of all U.S. Internet traffic) for free. They’re calling that “strong Net neutrality” just as the FCC prepares a new rulemaking on the subject, which might reconsider the FCC’s 2010 decision not to regulate interconnection between networks (which is already policed by antitrust laws).

Dan Rayburn (at StreamingMedia.com) has been providing refreshingly lucid explanations of what it takes to provide the capacity needed for video streaming — starting with his initial response to the hysterical outrage over the Netflix/Comcast deal and a follow-up post walking through the deal in greater detail. His latest response to Netflix really takes the cake:

Netflix likes to make it sound like they have no choice when it comes to sending their traffic into the ISPs networks, when in fact, they have many choices. The transit market is extremely competitive, with at least a dozen major providers who offer transit services at different price points… So as much as Netflix wants to make this into a net neutrally issue, it’s a business issue. Netflix has alternatives, they chose not to use them. … 

Mark Rogowsky drives the point home on Forbes:

The problem with this kind of doctrine is that it isn’t “strong net neutrality” at all. It’s “net neutrality for the strong.” While it’s true that this kind of rule won’t explicitly harm smaller content providers, the current system of requiring large ones to pay doesn’t either. When Comcast and Netflix announced their deal, we heard a lot about how the little guy was going to be shut out in the future. But in reality, the little guy is either going to escape the notice of ISPs until he’s big (and thus be safe by obscurity) or do business with a CDN, as Rayburn notes, to appear big and have nothing to worry about. In Netflix’s proposed rule, the very largest providers who bypass CDNs altogether could demand ever increasing amounts of resources from ISPs. And if they get rules written by the government that, for example, favor those with the biggest traffic commitments, that could end up hurting the little guy.

That point — that regulation can actually hurt the little guy — is one we’ve made in two recent Wired pieces, first responding to the D.C. Circuit’s decision to strike down most of the FCC’s Net neutrality rules and then in a follow up.

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