FCC to Netflix: Be Prepared to Pay Internet "Toll Fees" to More ISPs
April 1, 2014 1:34 PM
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The FCC won't allow net neutrality to regulate the way companies like Netflix connect to the Internet
Netflix was hoping for an end to internet tolls by calling to expand the scope of net neutrality, but the Federal Communications Commission (FCC) isn't having any of it.
, the FCC denied Netflix's call to expand net neutrality so that it covered companies and their methods of connecting to the internet.
More specifically, Netflix CEO Reed Hastings wanted the FCC to regulate the way companies like Netflix connect to the internet so that they wouldn't have to pay tolls to other companies (like Comcast, for example) to make sure its video gets to customers quickly and without any issues.
"Peering and interconnection are not under consideration in the Open Internet proceeding, but we are monitoring the issues involved to see if any action is needed in any other context," said an FCC spokesperson.
Netflix agreed last month to
to ensure that its movies and TV shows stream easily without traffic jams on Comcast's broadband network. While it's not clear how much Netflix is paying Comcast, the new deal will span several years and Comcast said it would connect to Netflix's servers at data centers operated by other companies.
But Netflix wanted this to be a one-time deal until it managed to push laws in place that eliminated these tolls.
Having to pay Comcast means Netflix could end up having to
pay tolls to other providers
like Verizon and AT&T -- and there's no way these tolls come cheap. The streaming company already pays high prices for content licensing from content providers, and having this extra fee on the table (and potentially from many big cable companies) would really put a damper on Netflix's cash flow.
"Some big [Internet service providers] are extracting a toll because they can—they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay," said Hastings.
"If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."
Big cable got even bigger this year when
Comcast acquired Time Warner Cable
(TWC) in February for $45.2 billion USD. Comcast has about 25 percent share of the broadband market while TWC controls around 12 percent. As far as the subscription cable TV market goes, Comcast currently controls roughly 19 percent and TWC controls around 9 percent. Together, the pair would control about a third of the markets (37 percent of broadband; 28 percent of cable TV).
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Paying Dane-Geld Netflix?
4/1/2014 2:30:40 PM
It is always a temptation to an armed and agile nation
To call upon a neighbour and to say: --
"We invaded you last night--we are quite prepared to fight,
Unless you pay us cash to go away."
And that is called asking for Dane-geld,
And the people who ask it explain
That you've only to pay 'em the Dane-geld
And then you'll get rid of the Dane!
It is always a temptation for a rich and lazy nation,
To puff and look important and to say: --
"Though we know we should defeat you, we have not the time to meet you.
We will therefore pay you cash to go away."
And that is called paying the Dane-geld;
But we've proved it again and again,
That if once you have paid him the Dane-geld
You never get rid of the Dane.
It is wrong to put temptation in the path of any nation,
For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
You will find it better policy to say: --
"We never pay any-one Dane-geld,
No matter how trifling the cost;
For the end of that game is oppression and shame,
And the nation that pays it is lost!"
RE: Paying Dane-Geld Netflix?
4/1/2014 5:31:10 PM
Hey wait a second, The Dane, isn't that racist?
RE: Paying Dane-Geld Netflix?
4/2/2014 10:04:14 AM
Denmark is European so it doesn't count.
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