The Net-neutrality nannies are shocked and outraged by the Comcast-Netflix deal—and by new reports that AT&T is in similar talks with the streamer that gave us the binge-worthy “House of Cards.”
They are appalled that Netflix, their poor oppressed corporate hero, would stoop to signing a deal to pay a traffic-bounty to its tormentor, Comcast, the nation’s largest cable guy. Much less to AT&T, the new-old heir to the nation’s old telephone monopoly.
This as the Federal Communications Commission prepares a third attempt to impose new restrictions on cable operators, dictating how they manage traffic on their networks and how much they can charge for it.
The FCC is the ultimate bureaucratic control freak, overreaching to smack down cable under the guise of “Net neutrality,” despite federal courts ruling twice that the agency had overstepped its legal authority.
The agency frets that Comcast or some other giant might intentionally slow down Netflix traffic until Netflix pays “protection” to speed it up. And it turns out Netflix traffic has slowed down 27% on Comcast cable systems from October to January.
But this likely is due to Netflix’s volumes growing too fat for the pipes, not a secret plot by Comcast meanies to mess with Netflix. Message to Comcast: Turn our “House of Cards” stream to poky sludge and we’ll cancel your service in favor of Verizon, AT&T, DirecTV or Dish. Or, someday, Google Fiber.
That customer threat is the best regulation—not some wrongheaded intervention by the FCC. It has virtually no evidence this feared slowdown practice is intentional and orchestrated, nor that it has occurred widely or much at all . . . it’s just worried.
This is the Obama bent: Regulators preemptively trying to impose rules and restrictions to crack down on things that haven’t happened yet.
This new deal between Netflix and Comcast shows why the FCC ought to stay out of it. Netflix hogs fully one-third of the nation’s bandwidth every night—it SHOULD have to pay a premium to cable operators for priority treatment.
This deal lets Netflix bypass the middleman data-haulers it typically has used, such as Level3 and Covad, and link up directly to Comcast. It’s offering to spend more up front to stay out ahead of Hulu and Amazon’s Prime service, which now may want to pay extra, too. Netflix wouldn’t sign this deal if it made its own business worse.
And I’d bet the terms exacted by Comcast from Netflix are nowhere near as onerous and dominating (nor as profitable) as Netflix’s self-appointed protectors fear. Comcast needs to win over the Net-neutrality nannies at the FCC to win approval to buy #2 cable operator Time Warner Cable. So it has to be seen as making nice.
Comcast, Verizon and other carriers spent billions of dollars in private shareholder money—not government funds, no subsidies—to build the Internet networks the FCC now presumes to oversee. Yet the FCC has said these aren’t “common carrier” nets subject to strict government oversight.
But lately, the FCC has held out an implicit threat that, if it can’t find a way to impose Net-neutrality rules that stand up in court, it may redefine the Internet as a common-carrier system like the old phone monopoly. And slap carriers with regulations based on century-old technology.
That would be a blow to the Internet growth the FCC purports to want to ensure. Government need not step in to protect one multibillion-dollar business from another. It is time the FCC learned that.