Netflix says ISPs could threaten Web video
Netflix, the Web's hottest video rental service, is worried that bandwidth providers could abuse their position as the gatekeepers of Internet access to hamstring competing Web-video distributors.
As the Federal Communications Commission continues to consider proposals for Net neutrality regulations, Netflix recently asked the agency (PDF) to adopt rules that protect Web video fans from anti-competitive practices.
(Credit:
Netflix)
"Network operators control the delivery pipes and generate significant revenue from content that travels over those pipes," Netflix wrote to the FCC. These operators "provide both the means and motive for discriminating against new ventures that might threaten revenue sources of the network operators."
Netflix's comments to the FCC, first reported by The Washington Post on Monday, is a signal that the company sees a showdown coming with Comcast, Time Warner, and other broadband providers over the distribution of online video.
While seemingly everyone predicts the Web will one day be the preferred means of distribution for on-demand film and TV shows, Netflix has aggressively prepared for that day by building up its Web-streaming service and partnering with set-top box makers that enable users to watch Internet-video on TV sets. But in the future, cable and satellite companies may have the upper hand when it comes to acquiring Internet rights to films and TV shows.
The bigger network operators possess huge numbers of subscribers (for example, Comcast boasts 25 million cable TV subscribers and 15 million Internet customers), and can afford to pay big bucks for content. The cable guys have also established strong ties to the studios after decades of heavy spending in Hollywood.
Netflix has 12 million subscribers--many of whom pay only $10 a month for the service--and has at times clashed with the studios over acquiring access to content. Typically, Hollywood sees far better returns from cable and satellite providers than Web services, such as Netflix and Apple.
In comments to the FCC, Netflix wrote: "There is substantial discrimination and consumer harm if a network operator uses its ownership affiliation with a (studio or TV network) or even its bulk buying leverage with a video content provider, to deny attractive programming to a competing online video service."
The "ownership affiliation" that Netflix is obviously referring to is Comcast's proposed merger with NBC Universal. The deal would give Comcast, the nation's largest cable company, a huge say in where NBC's content goes. /p>
Comcast has said that it has no intention of hurting NBC by limiting how the company distributes shows. Another concern for Netflix is that ISPs could use the so-called TV Everywhere initiative as another means to control distribution. TV Everywhere calls for cable and satellite companies to offer subscribers Web access the same content they can watch on their TVs--just as long as they keep paying that subscription fee.
In a statement last summer about TV Everywhere, Comcast said that it intends to roll out the service in a "manner that is consumer-friendly, pro-competitive and non-exclusive."
This is what Netflix would like to see the FCC do nonetheless.
First, Netflix supports a proposed rule known as a "transparency principle" that calls for network operators to disclose "practices that affect the consumers' ability to access content, use devices or services, and run applications," Netflix wrote.
"The Commission and consumer and other watchdog groups can monitor these disclosures," Netflix added, "to ensure that the associated practices do not violate the other open Internet rules."
Netflix wants the FCC to create a group assigned to determine what kind of information network operators must disclose.
Finally, Netflix doesn't want the proposed "managed services" exception to be able to circumvent the FCC's open Internet policies.
In the FCC's Notice of Proposed Rulemaking (NPRM), the group ponders the idea of "managed services." The FCC asks whether some services should be exempt from some or all of the Net neutrality rules. Netflix is very wary of this one.
The company wrote in its comments that a task group "would help assure that the 'managed services' exception does not become so extensive as to in effect create a 'fast lane' for service offerings from network operators and their affiliates while relegating all unaffiliated entities to the 'slow lane' of the open public Internet.
Greg Sandoval covers media and digital entertainment for CNET News. He is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at http://twitter.com/sandoCNET. 
If Cable wants to be an internet content company (and why wouldn't they) they should compete just like eveone else.
The other problem we're starting to see is that these corporations also belong to certain "associations" that are for their supposed interest which are nothing more than groups who help them collude against customers in the form of anti-competition. Pharmaceuticals, Mobile services, Media, etc all have memberships to groups that helps them from being competitive by not competing and keeping their products and services artificially high. The Mobile services are an easy example in the way they gouge the customers with the sms services, since sms is sent and received on the mobile networks downtime therefore generate minimal to no load on their network infrastructure while the cost per message has risen anywhere from 20-25 cents per message (when I first worked at Tmobile about 8 years ago all rate plans had the first 50 incoming messages free and were 5 cents per message which held up til about 4 years ago). I find it strange in the mobile industry competing with one another that sms services are going up instead of down as a result of the competition (this isn't like data where new hardware must be bought, setup, and used to deliver higher speed services).
I do believe the government needs to have a government panel that takes feedback from consumer watchdog groups, similar to a bbb with teeth, in the event a valid complaint about their business practice requires regulation because usually when there are too few of a competitor for a particular service or product (because they were initially competitve and absorbed the competition) those remaining few businesses seem to collude to artificially keep prices high. It's very similar to our two party system where the two parties will collude to prevent a third party from rising up to either become competitive or powerful by enacting certain laws to register a candidate and gathering of signatures (anyone should be able run and let their merits and positions determine their victory imho). There is a point that competition is good for business and consumers but collusion is never good for the consumers and is a mockery of an open market.
The competing ISP coopeartes with the RIAA, and also has data caps less than their bandwidth promises.
If a higher price is what it's going to take to find a 3rd ISP who actually wants to be a good ISP...I'm game.
I am actually very worried about what Netflix brings up.... that as more and more ISP's get into offering video and TV, they will relegate other services to a 'slow lane' in order to try and force people to use their services, which is totally unfair to both those competitors AND the consumers.
The short answer is, YES.
If they are not regulated by State or Federal Government. One can argue that it is the consumer that will decide if the corporation will continue their practices. But that isn't correct when many of the large ISPs are what they are today because of 5-15 years of lobbying and paying city, state, and federal pockets to make their monopolies.
The long answer: If yes to any of the following:
1) Does the ISP provide competing content products?
2) Does the ISP have business agreements with one or more content publishers or distributors?
3) Does the ISP have a monetary advantage to limiting network usage or defining "tiered" bandwidth to consumers?
Then assume that the consumer and any company that doesn't "play ball" will get shafted.
Then comcast admits their wrong doing and shrugs it off with are "so what are you gonna do about it..nothing because we rule your living room" and adds monthly usage caps.
What else will they do once services blatantly eats away at their core business.
Competition is your best means of fighting them. Perhaps cellular companies can do that, I don't know. But if cellular data plans were to reach about 4-6 mbps in download speed and you can tether that connection to your home computer, tv, networked appliance then we'll see some consumer lovin from comcast. Until then, they're just going to do whatever they want.
I've long thought about what Netflix brings up as more and more people are doing away with cable, including myself for 3 months now saving me $100/mo. A very wise move so far.
Businesses fear real innovation from real competitors who think outside of the box, especially when it allows us to cut the chains that binds us to them. We've requested these in the past and they didn't have to listen back then (with various cable boxes they could have easily controlled the content to allow us to pick and choose channels we wanted). I hope our government listens to us the people, so that the quality of our service with become better at a better price we deserve.
"Hey, don't watch Netflix it counts against your cap, but here at CableCo our movies don't count against your cap! We provide better service that way!"
Celtic, check this out from antennaweb.org
http://www.antennaweb.org/aw/info.aspx?page=FAQ#_Ref28770286
basically, your condo, apartment complex, hoa doesn't have the right to prevent you from installing an antenna for OTA television reception, including satellite. I live in a complex that insisted upon a $100 fee to have an antenna (because I too refuse to pay for vastly overpriced cable). I simply informed them of the Federal Law in writing, and haven't heard back from them since. Most hoas / rental properties aren't even aware of it.
I don't know if this helps you in regards to an ISP, but you definitely have the right to install satelitte TV if you want it.
It's finally nice to see Netflix agree; I hope others see the light.
I did file a complaint with the FCC about it. So, we'll see.
my account >> change plan >> show additional limited plans:
Starz Play Only (no DVDs) $7.99 a month
Only includes access to Starz Play and live Starz Play TV channel
Unlimited streaming of Starz Play
No DVD rentals are included
Might as well pay the extra $1 a month for:
1 DVD out at-a-time
+ unlimited instant watching
$8.99 a month
I could even imagine them offering certain content (new movies, cable TV shows) for a low pay-per-view price above subscription, or an extra $10/mo for unlimited access to that content. But something like that would cause people to drop cable in droves, so the networks and cable companies would probably fight it.
It's all too often either Cox or Comcast, never..BOTH!
Offering both would bring on real competition.
btw, DSL is so yesterday...and only good if you're in their area...
Cable, Telco and now Wireless are in an enviable position of "having their cake and eating it too."
That has to stop, and the sooner the better.
forcing separation of Content and Infrastructure opens up opportunities for competition, increases potential for Service and Product configurations and so much more. Complete independence is required, however, not just window dressing Separation, but Ownership and Management must be completely separate; through spin off, sale or merger as best serves a net Neutral Marketplace, but separate, completely separate.
There is more than enough revenue and profit potential in the Pipeline business, but current monopolistic management restricts Content development, and, as has been shown, monopolistic practices have caused the negative gap between the U.S. and many other countries regarding Broadband speeds and Reach, to continue, even to grow.
The U.S. MUST restore it's leadership in the Internet Marketplace. The U.S. economy is already approaching 50% dependence of Internet-based communication and activity, with more growth to come, particularly in Wireless utilization, to achieve Convergence (AnyThing, AnyTime, AnyWhere (AAA).
Separation leads to free market competition leading to reasonable access at competitive prices; more choices at less cost-that's a Marketplace.
- by littleM February 13, 2010 8:54 AM PST
- The Holy Grail of the Internet is a Bandwidth Monopoly. Anyone who has one will become vastly wealthy and powerful. Right now, those in the USA are AT&T, Verizon, and Comcast. None has a monopoly on the backbone but each has a partial monopoly on the distribution. Fortunately, their businesses main sources of revenue lie elsewhere. This is not true overseas. One day, China may have such power internationally.
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