By Gautham Nagesh
Broadband companies should be required to connect their networks
to major content providers such as Netflix for free, according to
Netflix Inc. Chief Executive Reed Hastings.
In a blog post published Thursday, Mr. Hastings called for rules
to ensure big broadband providers like Comcast can't keep charging
companies such as Netflix a fee to connect directly to their
networks--a practice known as interconnection or peering.
Mr. Hastings framed peering as crucial to the principle of net
neutrality, which states that Internet service providers can't
discriminate between two similar content providers. Verizon
recently convinced the U.S. Court of Appeals for the D.C. Circuit
to throw out the Federal Communications Commission's net neutrality
rules, but FCC Chairman Tom Wheeler has signaled he intends to
issue new rules in the coming months.
Mr. Hastings' comments are the first time Netflix has called for
rules to govern deals between broadband providers and content
companies.
"Without strong net neutrality, big ISPs can demand potentially
escalating fees for the interconnection required to deliver high
quality service," Mr. Hastings said.
In the post, Mr. Hastings publicly acknowledged that Netflix
recently struck a paid peering deal with Comcast, which had
improved the quality of service for its customers. He said Netflix
would continue to strike such agreements as needed, but
acknowledged that the deal opens the door to bigger fees down the
road.
"Netflix believes strong net neutrality is critical, but in the
near term we will in cases pay the toll to the powerful ISPs to
protect our consumer experience. When we do so, we don't pay for
priority access against competitors, just for interconnection," Mr.
Hastings said.
When asked if Netflix was calling on the FCC to regulate peering
as part of a coming process to create new net neutrality rules, a
Netflix spokesman said no-fee interconnection is essential for an
open, competitive Internet.
"We hope the big ISPs embrace strong net neutrality on their
own," he said. "To the extent companies don't do the right thing,
government will have to consider stepping up its obligations to
protect consumers."
Netflix's business model depends on spending a great deal on
content and less on its Internet infrastructure. The company has
warned in regulatory filings that its results could suffer if ISPs
don't agree to interconnect with their servers. Broadband
providers, in turn, have blamed Netflix for routing its traffic
inefficiently.
Write to Gautham Nagesh at gautham.nagesh@wsj.com
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