Blog Post

Netflix claims Comcast abuses its market power in peering negotiations

While the internet debates the death of network neutrality, the Comcast (S CMCSK) and Time Warner Cable merger back-and-forth continues. Sen. Al Franken released Netflix’s response to his request for its thoughts on the proposed merger. Netflix, (S NFLX) needless to say, doesn’t like it. In details that have not been aired publicly, the letter accuses Comcast of abusing its market power to charge Netflix an interconnection fee to reach its customers — the first time Netflix has ever paid such a fee to an ISP. However, if the FCC has its way on net neutrality, this may just be one of many fees Netflix will find itself paying.

5 Responses to “Netflix claims Comcast abuses its market power in peering negotiations”

  1. Patrick W. Gilmore

    Anyone afraid what will happen when companies which have monopolies can charge content providers or guarantee packet loss?

    In a normal “free market”, if two companies with a mutual consumer have a tiff, the consumer decides which to support. Where I live, I have one broadband provider. If they get upset with, say, a streaming provider, I cannot choose another BB company because I like the streaming company. I MUST pick another streaming company, as that is the only thing I can “choose”.

    How is this good for the consumer? How is this good for the market?


    TTFN,
    patrick

    • John Willkie

      Cable firms 1) aren’t monopolies (haven’t been for some time) and 2) don’t compete: they operate within franchised areas. Just like your water company doesn’t compete with the water provider in a nearby city.

      • Comcast operates its franchise as a cable television provider. They are (loosely) regulated as a television provider. They are not considered a monopoly because of the existence of Dish, DirecTV, and your neighborhood tel-co.

        When it comes to broadband, that is another story. That is the context of this article — comcast as an abusive, monopolistic internet service provider.