Netflix Admits It Doesn't Really Care About Net Neutrality Now That It's Big

from the screw-you,-I've-got-mine dept

So if you've been watching the Trump administration's attempt to kill net neutrality, you've probably noted that one-time net neutrality supporters Google and Netflix have been notably absent from the debate, leaving small companies and consumers outgunned and outspent in the attempt to protect the rules. If you're a regular Techdirt reader, you'll recall that despite still favoring a reputation as a consumer ally, Google hasn't really given much of a damn about protecting net neutrality since around 2010 or so. Its interest waned even further once the company launched its own ISP, Google Fiber.

Netflix's blooming disinterest in the subject has been a more recent affair. In a recent letter to shareholders, the company made it clear it believes that now it's an international video powerhouse, fighting for things like an open and healthy internet and level playing fields are no longer a priority:

"Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable."

And while some tried to argue that this was simply Netflix trying to calm nervous investors, it's becoming clear that Netflix's apathy goes quite a bit deeper. Speaking at a conference in California this week, CEO Reed Hastings stated that while net neutrality is still important, it's notably less important to the company now that it's a big freaking deal:

"It’s not narrowly important to us because we’re big enough to get the deals we want,” Hastings said. It was a candid admission: no matter what the FCC decides to do with Title II, Netflix isn’t worried about its ability to survive. Hastings says that Netflix is “weighing in against” changing the current rules, but that “it’s not our primary battle at this point” and “we don’t have a special vulnerability to it."

You might recall that Netflix was singing a very different tune a few years ago, when reports began to emerge that giant ISPs like Verizon, AT&T, Comcast and Charter were intentionally letting their interconnection points congest in order to kill settlement-free peering and extract additional, duplicative tolls from content and transit companies. The move resulted in a notable slowdown for Netflix subscribers, who were quick to blame Netflix for problems originating at the ISP (New York AG's recent lawsuit against Charter for slow speeds includes some internal e-mails supporting these allegations).

The FCC's 2015 net neutrality rules didn't specifically prohibit this kind of chicanery, but they did allow the FCC to investigate anti-competitive behavior on that front on a case-by-case basis. And lo and behold, the mere presence of the rules did appear to magically resolve many of these disputes. But Netflix also had the cash on hand necessary to pay large ISPs like Comcast for direct interconnection, an option smaller companies may not have had the luxury to do.

And of course that's just the thing: net neutrality may not matter to Netflix now that it's big enough to go toe to toe with companies like Verizon and Comcast, but it's still damn important for the Netflix of tomorrow -- companies that will be forced to do business over already uncompetitive broadband networks as an axe looms over nearly all meaningful consumer protections. Hastings' message to these emerging entrepreneurs? Basically to figure it out for themselves because Netflix "done got theirs":

"The Trump FCC is going to unwind the rules no matter what anybody says,” Hastings argues. He might believe that net neutrality is “important for society," but his company, Netflix, isn’t in trouble so it’s not going to get into the fight. “We had to carry the water when we were growing up and we were small," Hastings said. "Other companies have to be on that leading edge."

That's viciously shortsighted. Hastings is basically saying that keeping the internet healthy, level and open is no longer his problem. Granted there are several things driving this ignominious proclamation, including said interconnection deals and the fact that Netflix recently secured a deal with Comcast bringing Netflix to Comcast cable boxes. So in Hastings' mind, he's moved beyond net neutrality because his company was large and wealthy enough to pay for the luxury to temporarily resolve the threat. Problem solved!

But Hastings is dead wrong.

As we move to strip all oversight of the uncompetitive broadband sector, the door will be reopened to ISPs finding a litany of creative ways to abuse that lack of competition. That's going to get easier to do as cable providers grab a growing monopoly over fixed-line broadband, expand arbitrary and unnecessary usage caps, and use zero rating to drive users away from competing services. If Hastings thinks a viciously uncompetitive broadband sector with zero regulatory oversight ends well for anybody not named AT&T, Verizon, Comcast and Verizon -- he's fooling himself. As is anybody else sharing his sentiment.

Sure, Hastings was clear that Netflix will still technically support net neutrality, but only via the occasional tersely-worded press release from lobbying and policy vessels. But if consumers are looking for real help in defending net neutrality, it's abundantly clear they need to start looking elsewhere, because Netflix now believes it's somehow above having to care about silly stuff like the internet fucking working properly.

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Filed Under: competition, net neutrality, reed hastings

Companies: netflix