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It’s on: Time Warner Cable alleges that Netflix discriminates against its customers

Time Warner Cable (s twc) upped the ante in the dicey relationship between Netflix (s NFLX) and some of the country’s largest ISPs Wednesday, alleging that the video subscription service discriminates against Time Warner Cable customers. “Netflix is… closing off access to some of its content while seeking unprecedented preferential treatment from ISPs,” the company told Multichannel News.

The point of contention is Netflix’s recent launch of 3D and Super HD video formats. Netflix launched a limited number of 3D titles during CES last week, and also added the ability to stream many of its titles in Super HD — a better-looking 1080p HD format that features less compression, and thus higher bandwidth requirements, that Netflix’s regular 1080p streams.

Both 3D and Super HD are exclusively available to subscribers whose ISPs take part in Neftlix’s Open Connect CDN network, and the company is actively encouraging its subscribers to contact their ISPs and get them to adopt Open Connect.

This kind of customer-driven campaign apparently didn’t go over so well with Time Warner Cable. The company told Multichannel News that it is wrong for Netflix to “withhold any content formats” from Time Warner Cable Customers, adding: “Time Warner Cable’s network is more than capable of delivering this content to Netflix subscribers today.”

Of course, Netflix doesn’t exactly agree with this point of view. Netflix Chief Communications Officer Jonathan Friedland sent me the following statement via email:

“OpenConnect provides Netflix data at no cost to the location the ISP desires and doesn’t seek preferential treatment. We hope TimeWarner will join the many major ISPs around the world who are participating in Open Connect to reduce costs, minimize congestion and improve data delivery to enhance the consumer experience.”

As we wrote before, this conflict between Netflix and ISPs has been going on for some time, and it essentially comes down to peering arrangements. ISPs want big content providers like Netflix and Google (s GOOG) with its YouTube service to pay for traffic, but Netflix and Co. point out that consumers are already paying for their traffic.

These disputes have largely remained under the radar, but Netflix elevated the issue by tying it to its new video formats, and enlisting consumers in the process. It now looks like Time Warner Cable is responding with the same vigor it displays during cable TV carriage disputes.

The question is whether consumers will side with Netflix, or with their cable company.

22 Responses to “It’s on: Time Warner Cable alleges that Netflix discriminates against its customers”

  1. Gregory Pierce

    Really? Between Netflix and my cable company? One gives me something at a cheap/reasonable price and the other keeps bending me over to get more money out of me every 6 months. Hmmm… I wonder which one I’d side with.

  2. btgibson

    When I wrote Time Warner Cable telling them my desire to watch Super HD and 3D content via Open Connect, I got the following response “Thank you for your request. Please note that, we do not support Netflix.” Unbelievable

  3. Suzanne Quinn

    This article fails to point out the purpose for the CDN. The new formats take up too much bandwidth, most networks including Netflix’s servers can not handle the extra traffic this causes. To combat this they are deploying copies of their new SuperHD/3D videos at the ISP’s themselves. Its not that Netflix has something against ISP’s or Time Warner, there is simply no other way to deliver this type of content currently.

    • Stephen Condon

      Not true Suzanne, Akamai and other CDNs could deliver this content. Netflix just wants better access and more efficient and reliable way to deliver this content which is to co-locate with the ISPs. But… read my earlier comment.

  4. Stephen Condon

    From a TWC perspective (I’m not associated with TWC) why should I invite a competing video service, that is eating into my share of my customers’ entertainment dollar, to get preferential access to my network (that I’ve spent $billions building) so that they can provide an even better service and take more dollars from my pocket? If they do this for Netflix why not HBO or PlayboyTV? If we take this to the Nth dgree then TWC just becomes a dumb pipe provider – a utility.

  5. I’d side with Netflix over the cable companies because as far as I’m concerned insufficient competition and choice in the broadband internet industry has left Americans with slower service and higher costs than much of the rest of the world. Until the FCC deems broadband internet a utility and regulates it as such, we will continue to be held hostage by an industry content on squeezing us for $50 a month for a service worth $5.

  6. Virtuous

    TWC wants customers to pay more for subscribing to Netflix. This is a clear attempt to circumvent net neutrality. If Netflix has to pay TWC to access TWC customers, Netflix will be forced to pass along the greater cost to consumers. This is why strict net neutrality must be set in law. Free and low cost web services are all in danger of becoming paid services. This includes services such as Facebook, Youtube, Hotmail, Google search and Flickr.

  7. Nick Vlku

    The problem with spending decades poisoning your relationship with your customers means you are screwed when you try to get them to side with you.

    TWC will get NO customer sympathy here. None.