23 Comments

Summary:

When most Comcast subscribers complain, it’s a blip. When Netflix CEO Reed Hastings vents to his 120,000 subscribers on Facebook, it’s a salvo. Reed Hastings doesn’t agree with Comcast’s approach to net neutrality and caps — and he wants everyone to know it.

Netflix CEO Reed Hastings at F8
photo: Getty Images / Justin Sullivan

When most Comcast subscribers complain, it’s a blip. When the CEO of Netflix vents to his 120,000 subscribers on Facebook, it’s a salvo. Reed Hastings doesn’t agree with Comcast’s approach to net neutrality and caps — and he wants everyone to know it.

His beef? Watch Netflix, Hulu or HBO Go on Xbox and it counts against Comcast’s broadband cap for consumers. Use Comcast’s own Xfinity app and it doesn’t. Translation: Anyone worried about hitting the cap will watch what they can on Xfinity, giving it an advantage over the other services like Netflix or even a service it partially owns (but has no say over), Hulu.

From his Facebook post:

Comcast no longer following net neutrality principles.

Comcast should apply caps equally, or not at all.

I spent the weekend enjoying four good internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu.

When I watch video on my Xbox from three of these four apps, it counts against my Comcast internet cap. When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast internet cap.

For example, if I watch last night’s SNL episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all.

The same device, the same IP address, the same wifi, the same internet connection, but totally different cap treatment.

In what way is this neutral?

It’s not the first time Hastings has turned to Facebook to raise a question about Comcast. Late last month, he lobbied for the nation’s largest cable operator to allow access to HBO Go on the Xbox. Then, he raised the cap issue a tad more gently:

Once I get HBO GO on my Xbox, then it will be strange that streaming Game of Thrones from the HBO GO app on my Xbox will count against my Comcast internet cap, but when I watch those same Game of Thrones streams through the Comcast app on Xbox, over the same wifi connection to my Xbox, then it will not count against my cap. Hmmm…

No “hmmm” about it this time.

Netflix recently formed Flixpac, its own political action committee. What can it do about net neutrality? My colleague Stacey Higgenbotham explained:

In conversations with insiders in DC and at Netflix, the video streaming service’s agenda has become clear. Get rid of the Video Protection Privacy Act and help push an agenda to keeps content flowing across the web. Issues such as Comcast not counting video streamed via the Xbox against its cap and the Verizon deal to buy spectrum from the cable companies all have implications for Netflix’s business model. In the first example it brings up the issues of creating what essentially becomes a private version of the Internet to sling Comcast video on demand content around in a manner that won’t penalize the consumer for streaming.

We haven’t heard the last from Hastings on this subject. He’ll use any and every means to get the point across.

Update: I should have included the reason Comcast sees a difference between the video it delivers through Xfinity and video that comes from other services. As Stacey H. explains here, Comcast manages Xfinity delivery to the Xbox through its own IP network rather than across the public Internet. Comcast the ISP isn’t counting usage managed through its private network against the 250GB broadband cap. Comcast has yet to reply to my request for comment.

(via Jason Hirshhorn)

 

  1. Looks like Whitacre was prophetic. Local streaming doesn’t use expensive Internet backbone capacity, while Netflix does. So, it’s perfectly reasonable for it to be uncapped. But Netflix wants to use ISPs’ pipes for free.

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    1. Dominic Jones Monday, April 16, 2012

      Um, I’m paying my ISP to deliver Netflix, Hulu and other content. In fact, I took a more expensive plan with higher speeds and a higher cap. They’re making a fortune on me. If they make Netflix also pay, then I want a discount from my ISP.

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    2. It doesn’t matter. Not all sites require the same amount of bandwidth. That’s the way the internet works. When you start deciding which sites are allowed to use bandwidth and which are not, you’re in violation of net neutrality. If you don’t like the way the internet works, get out of the ISP business.

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      1. Actually, ISPs currently *do* treat different services differently, as part of their OM strategy. If you don’t like the way reality is, get out of the commenting business.

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  2. ChrisAnthonySalazar Sunday, April 15, 2012

    I actually don’t see this as a big issue. To me, its an incentive to use Comcast’s own app instead of the other competition. The other apps just need to find ways to suck less data. I wrote more about this here: http://www.chris-salazar.com/blog/2012/04/16/netflix-ceo-calls-out-comcast-heres-his-issue/

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    1. Paul Szerlip Sunday, April 15, 2012

      I’m not sure you fully understood the point of his statement. It isn’t about the *amount* of data the Comcast app consumes. If the Comcast app consumed a whopping 50x the Netflix app, it still wouldn’t count against your cap.

      In essence, they’re using their broad content deals, and ownership of the pipelines to wedge out services like Netflix, or any competitor for that matter (i.e. monopoly power over content on the internet). I have a hard time understanding how that isn’t a problem for everyone.

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    2. Chris

      Can you share you full comment instead of advertising the link to your blog :-) It would help us actually follow the conversation thread. Thanks

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  3. He’s the same idiot who almost ruined his company last year

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    1. He is also the guy who realized his mistake, reversed his decision and is actually talking about something that is going to affect and impact your Internet future.

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  4. Jay Cuthrell Sunday, April 15, 2012

    If you look back upon the impact of AOL during the dial-up era upon traditional Class 5 switching platforms within service provider environments (telco) in various parts of the US and the eventual prevalence of broadband which begat OTT plays… well, here we are.

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  5. Courtney Powell Sunday, April 15, 2012

    You can sign a petition asking Comcast to stop penalizing Netflix/Hulu/HBOGo users and adhere to Net Neutrality at http://www.publikdemand.com

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  6. The Comcast app delivers the content locally. Therefor it doesn’t cost Comcast anywhere near as much to deliver the content. I bet if Netflix was paying to use their pipes, it wouldn’t be a problem.

    Don’t get me wrong here. I hate Comcast. However I don’t see that they are doing anything wrong here.

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    1. Netflix could easily solve the problem. Build their own pipes.

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      1. That’s a ridiculous statement. Just “easily” build their own pipes. And Comcast’s “pipes” were built with taxpayer money. Support for a system like this will lead to Comcast as your only source for content. And how is that good?

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  7. Dominic Jones Monday, April 16, 2012

    Rather than compete on price, quality or utility, Comcast is using caps as a way to discourage broadband customers from using non-Comcast video products. Today it’s video, but what’s tomorrow? Will they give preference to their own news apps, social network, software as a service products…? It’s a slippery slope from here.

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    1. Staci D. Kramer Monday, April 16, 2012

      Dominic, I think Comcast is competing on a variety of levels but the idea of private vs. public traffic raises a lot of concerns.

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      1. Dominic isn’t that just another form of competition. If consumers don’t like the cap of how Comcast counts it they can go with another service, or they could if current FCC regulations didn’t substantially limit the number of competitors in each market. This seems to me like another corporate fat cat CEO looking to congress to use the force of law to solve his problems instead of fixing it themselves by competing in the marketplace.

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  8. How is Comcast’s delivery through the Xbox app different from a CDN (e.g. Limelight, Akamai, Level3)? Don’t they pay the ISP to hook directly into the ISP’s private network? I have to assume that’s how HBO controls what ISP’s have access to their content as well.

    If you look at the technical details and Comcast’s public reasoning, there’s a 99% chance it’d fall apart in court. Why hasn’t GigaOm understood this yet?! Read about the Level3 “peering” dispute on NANOG then come back and make public comments that don’t challenge Comcast’s position. :/

    ^– That’s me. Being disappointed in GigaOm.

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  9. How low is his cap so that this even makes a difference?

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    1. Staci D. Kramer Monday, April 16, 2012

      The Comcast cap is 250 GB.

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  10. Paul Sweeting Monday, April 16, 2012

    What this dispute exposes, like the dispute between Comcast and Level 3 (also involving Netflix traffic) is the difficulty of asking the FCC tackling competitive issues using the tools of telecommunications regulation. These issues are really best addressed through antitrust laws, by the FTC and Justice Department.

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