Netflix has been inching toward outright opposition over the past several weeks. Netflix opposes Comcast deal

Netflix on Monday officially opposed Comcast’s $45 billion bid to buy Time Warner Cable, becoming the first major Internet company to challenge the cable giant’s plans.

“If the Comcast and Time Warner Cable merger is approved, the combined company’s footprint will pass over 60 percent of U.S. broadband households,” Netflix CEO Reed Hastings wrote in a letter to shareholders, adding, “Comcast could control high-speed broadband to the majority of American homes.”


The Netflix statement could provide a major boost to the merger’s still-nascent opposition, which until now has consisted mainly of public-interest groups. However, Netflix did not indicate whether it plans to actively lobby against the deal, which federal regulators are beginning to scrutinize.

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Comcast quickly fired back. “Netflix’s opposition to our Time Warner Cable transaction is based on inaccurate claims and arguments,” spokeswoman Jennifer Khoury said in a statement. “There has been no company that has had a stronger commitment to openness of the Internet.”

The “House of Cards” maker had been inching toward outright opposition over the past several weeks.

Netflix fired its first major shot at Comcast last month, slamming the cable company for failing to support strong net neutrality, the principle that Internet providers should not speed up or slow down particular kinds of Web traffic. Netflix at the time also expressed unease that it had to pay Comcast for an “interconnection” deal to improve streaming speeds for its TV and movie offerings — a theme the company hit again in the letter to shareholders Monday.

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“Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix. The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers,” Hastings wrote.

But Comcast’s Khoury said it was Netflix that approached Comcast about an interconnection agreement, which she stressed is a separate issue from net neutrality. And she touted Comcast’s adherence to net neutrality — a condition of its 2011 purchase of NBCUniversal — as a plus for the Time Warner Cable deal.

“In fact, one of the many benefits of our proposed transaction with Time Warner Cable will be the extension of net neutrality protections to millions of additional Americans,” she said.

Netflix on Monday took similar shots at other Internet providers, including AT&T. Hastings said AT&T’s “fiber-based U-verse has lower performance than many DSL ISPs, such as Frontier, CenturyLink and Windstream” and that “reinforces our view that connectivity to the broader Internet is critical to the quality of experience consumers receive.”

Netflix also announced a rate hike. “Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only,” Hastings wrote, noting that existing customers would remain at the $7.99-per-month rate “for a generous time period.”