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Amazon, Netflix and tech giants defend net neutrality in letter to FCC

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In a rare public stand for the internet retailer, [company]Amazon[/company] has come out against the Federal Communications Commission’s purported plan to bifurcate the internet into faster and slow lanes as part of its new network neutrality rules. Amazon joins a list of more than 100 tech firms that include expected names like [company]Netflix[/company] and [company]BitTorrent[/company], but also surprises like the National Association of Realtors and [company]Lyft[/company], in signing a letter to the FCC Chairman and commissioners.

Other significant signatories include Facebook, Google, Kickstarter, Twilio, Codecademy, OpenDNS, Zynga, Tumblr, Reddit and Foursquare. The letter protests the FCC’s plans to implement net neutrality rules that could let ISP’s charge content providers like Netflix or Amazon to deliver their packets faster or at a higher quality.

This proposed change in rules, which comes after the original network neutrality rules implemented in 2010 were struck down by a U.S. Federal Court of Appeals earlier this year, has caused the tech and media world to freak out about the death of the open internet. While the FCC has tried hard to downplay this threat, it has so far been unable to convince people knowledgeable about the industry that this plan isn’t a step back for the open internet.

Last week, tech companies visited D.C. to plead their case, and the letter sent to the FCC on Wednesday does the same. The letter comes out against paid prioritization, but offers Chairman Wheeler an out by blaming the media for possibly misunderstanding how he really intends to play this rule-making process. From the letter:

According to recent news reports, the Commission intends to propose rules that would enable phone and cable Internet service providers to discriminate both technically and financially against internet companies and to impose new tolls on them. If these reports are correct, this represents a grave threat to the Internet.

Instead of permitting individualized bargaining and discrimination, the Commission’s rules should protect users and Internet companies on fixed and mobile platforms against blocking, discrimination, and paid prioritization, and should make the market for internet services more transparent. The rules should provide certainty to all market participants and keep the costs of regulation low.

Such rules are essential for the future of the Internet. This Commission should take the necessary steps to ensure that the Internet remains an open platform for speech and commerce so that America continues to lead the world in technology markets.

There are some notable tech names missing from the list of companies asking the FCC to consider how it plans to regulate broadband, but, perhaps with pressure from the current participants, they may get on board. Or maybe consumer outrage and the current signees are enough to convince the FCC it shouldn’t move ahead with its plans as they stand.

28 Responses to “Amazon, Netflix and tech giants defend net neutrality in letter to FCC”

  1. Rob from iowa

    Isn’t this just a way for ISPs to extort more money out of businesses? If some one is holding the future of your business hostage or basically for ransom by throttling access isn’t this the textbook definition of extortion and there fore illegal? This is why net neutrality is needed.

  2. Simple solution:

    Google, Netflix, Amazon, etc – when someone accesses you from behind Comcast, simply pop up a screen saying “Change your service provider. We do not service comcast.”

  3. Hypocrisy

    The ISPs do things like deploy thousands of workers, climb poles, install hardware, etc. Their workers even, at times, die on the job. Software companies sit in front of their desk, coddled with free food and benefits.

    Yet the rich techies think that the common workers of the ISPs should be prevented from adding premium tiers. The Freemium startups can’t take their own medicine.

    It’s as if they think the ISP laborers are dumb, so the pipes they lay must be dumb as well.

      • Ceradon

        Firther research and you would come to the conclusion that many supposed “significant signatories” aren’t significant at all. Level3 is one the largest “last mile” providers, so they’d be most affected by this and, here’s where their bias shows, some of the co.panies that would be most adversely affected with hundred of millions of active users (eBay, Microsoft) would be left out whil others that wouldn’t be affected much (Reditt, Codeacademy) are staged prominently. An exceedingly laughable article, even for GigaOM standards.

  4. Hahahahaha you think you web content companies can sway anyone at the Telecom bought and paid for FCC? Welcome to the world of the fracked over everyday consumer. ISP’s biotch Wheeler is laughing as he frames the letter for a gag go hang on his wall.

    Get a clue Silicon Valley!

  5. Bruce

    You folks have it all wrong!

    This is all about extorting campaign contributions to Obama and his push for cash for the mid-terms.

    These guys do this all the time. Pitting two huge interest groups against each other with the threat of offensive new rules and regulations.

    Just look at the history of this with the cable tv industry, something Wheeler has first hand experience with from his days at the NCTA.

    And let’s not forget how he got his FCC appointment as a top bundler for Obama’s re-election.

  6. Jack N Fran Farrell

    Easy fix, let users meter their as delivered bandwidth, both in and out. Let them underpay their nominal monthly rate by the amount the ISPs under deliver according to the user’s home meter.

    What Comcast is doing is equivalent to contracting for 10,000 BTUs, delivering 2,000 BTUs while demanding payment for 10,000 BTUs. Meanwhile blaming Netflix and suggesting you buy a sweater.

  7. jh1289

    Net Neutrality is a “must-have”. I’m glad to see big money companies feel the same, even if it’s because they know these fast/slow lane changes will hurt them. The Internet has worked great for a quarter-century now (yes, I was on it when it was all text-based and not yet public). Changing it to allow corporations control is a huge mistake.

  8. If the new regulatory regime is going to give large content providers an advantage over the little guys, why are the largest content providers leading the charge against it? Cause they are all just good people?

    • jh1289

      Look at who is for and against it. It’s very clear. Netflix will get charged more, which means a price increase for Netflix users. Amazon has high volume. Foursquare has high volume. BitTorrent has high volume. These companies don’t want to raise their prices and possibly lose customers.

      • Exactly. They would rather see their costs spread across all broadband subscribers. Can’t say I blame them. But, not so good if you are not one of their customers.

        • hackersGalley

          Ya that’s not how the internet works. You pay for a certain amount of data, where, how and if you use that data does not affect some one elses experience. That’s is the BS that the cable companies are putting out there to make it seem like it is a finite resource like oil or something.

    • roxahris

      Because they’d have to pay for it – and not just pay, but overpay, because the ISPs rallying for no neutrality are the ones that stand to profit the most off it by charging content providers, large and small alike, ridiculous fees for non-awful speeds and access.

    • cathy

      Because those large content providers (e.g. Netflix) aren’t only in competition with small content providers, but they are in competition with ISPs (e.g. Comcast). Moreover, the ISPs who want to compete with the content providers can throttle the delivery of content from large content providers to end users while prioritizing their own content (or that of a competitor of the large content providers if they pay up) to the end user, providing an unfair advantage.

      History shows that ISPs like Comcast are having their cable TV/video on demand subscriber base shrink due to cord cutters who choose to have their content delivered via Internet delivery. It might be hurting their traditional media delivery business, simply because the tech is better and more personalized. But it’s definitely not hurting the ISPs Internet delivery business in the least. It is actually helping it grow by increasing the demand, simply because Internet delivery requires ISPs as the last mile, and therein lies the problem.

      Amd the problem is this:
      The Internet delivery business runs on top of ISPs’ infrastructure, and if ISPs can manipulate and prioritize who and what runs on their infrastructure and how fast (or slow), they will be in a position to create unfair advantages.

      Additionally, the end user who pays for the delivery of content is having their content shaped before it arrives. This was what happened with Comcast subscribers accessing Netflix over Comcast’s last mile to their homes. Their sluggish video experience (as throttled by Comcast) ultimately forced Netflix to proceed with a peering agreement with Comcast.

      So it’s basically like this:

      Suppose you fly somewhere with Netflix Airlines and you pay for your bags to be transported and placed on the baggage claim cart for pick up after arriving, based on luggage weight. But your destination airport is Comcast Airport, and they also have their own airline – Comcast Air – which competes with other airlines. So, after arriving at Comcast Airport, the Comcast baggage crew (which is the only crew who can do this, mind you) takes your bags off the plane, just like they do all the other planes. HOWEVER, because you flew with Netflix Airlines, they have a policy where they will hold your luggage for 24 hours before putting your bags on the cart. Meanwhile, customers flying with Comcast Air have their bags placed on the cart immediately when getting off the plane. Comcast will also place bags immediately on the cart for other airlines who pay Comcast Airport a fee, despite the fact that customers already paid for their bags to be transported and put on the cart.

      So given these options, with whom will you fly:
      1) Netflix Airlines, where you must wait 24 hours for your luggage,
      2) AmazonPrimeAir, where you don’t wait for your luggage, but you must pay for higher ticket prices so AmazonPrimeAir can pay Comcast Airport for the cart fee, or
      3) Comcast Air, where there’s no waiting and fees are cheaper.

      Seem unfair? That’s because it is.

      The Internet needs to be defined as a utility, and let’s stop all this nonsense.

      • I think the analogy is more like this. There was an existing train service that was optimized for delivering bulk cargo. Then, some clever people invented an airplane service that could deliver small cargos very quickly. This enabled a vast array of entirely new applications that were not possible with the old train service. Then, some people realized the airplane service had enough capacity to begin carrying bulk cargo, replacing the train service for a small minority of people.

        Except, it turned out that the airplane service did not actually have enough capacity to deliver bulk cargo to very many people. As more people wanted to get their bulk cargo by plane, the airplane service began to perform very poorly, even for people who were trying to use it for truly innovative applications, that needed an airplane and were never possible with the train. It turned out that it was actually all of these people, who paid for airplane service to access these new applications once in a while, which funded the capacity that the bulk carriers were able to jump in and consume. Now, the excess capacity is used up, and the bulk carriers want to spread the cost of additional capacity across all airplane users rather than making their own customers pay for it. Meanwhile, the performance of truly innovative applications that could not function without the airplane service suffer, while a small number of users demand their train cargo by airplane.

        • Nathan

          Tim that is a horrible analogy. To begin with, the reason service gets slow and shoddy for some people or during high traffic times is because the ISPs try to predict traffic rates and oversell their connections.

          Imagine the pipe can support 100 megs of simultaneous traffic. If the ISP said OK, you get a 10 meg service and then allotted each house 10 megs it would be one thing, each house would have 10 megs all the time and there would be 10 houses with a connection. What happens though is they sell everyone “up to 10 megs,” and then sell internet access to 20 people based on traffic shaping and patters so that for most of the day you will get 10 megs. However, if everyone logs in at once, all you can get is 5 megs.

          I pay for almost one terabyte of bandwidth a month. If I go over my limit, I have to pay per gigabyte used in excess. Since I am defined by a set amount of “water in my bucket,” it shouldn’t matter how I pour it out. If I want to pour it all out at once, that should be no different than if I wanted to trickle it out over several weeks. Either way I paid for a set amount of water in my bucket and how fast I use it up is my business. Especially since I will be billed more if I run out of water and need more.

          • You confirm my point. They do not have enough capacity. I can think of 3 ways to fund capacity upgrades:
            1. Increase revenue collection from data originators like Netflix
            2. Increase revenue collection from home subscribers like you
            3. Spend revenue they have already collected
            If 3 is a viable option, then 1 might still be a good idea, so that more of the excess cash the ISP’s have on hand could go back to home subscribers in the form of lower rates.

  9. Mitch Crase

    The Net Neutrality people have no respect for business assets so it is selfish for them to avoid a compromise. The compromise is thoroughly possible and expected. The matter will be open to debate and monopoly monsters will be met at the door.

    • What is there to respect? The government gave these companies monopoly to recoup on those “assets” They are not trying to double dip on the user and the companies. They charge the consumer for a internet access fee then they charge companies like Netflix another fee for the same data that streaming to our homes. Do you really think that an internet fast lane will give you cheaper internet? You are delusional if you think so. All internet data should be treated equally and there will never be a situation where one data is “more equal” than another data.

      • Hypocrisy

        John – you’re 100% wrong. The governments didn’t give these companies monopolies. The companies PURCHASED finite-lived leases to the tech. If the government wanted stipulations, they must be included in the sale.

        There is no double dipping. Charge consumers a fee to access the internet. Charge companies for the right to better service. Apple takes a 30% cut of the the App Store apps – who are they really charging? You pay for the App, but Apple takes 30% from the companies providing that. How is that any different than Comcast charging Netflix? (Except that Comcast actually incurs ongoing expenses from piping you content.)

        • Not only that, but Apple explicitly reserves the right to reject any app that competes with their own apps. So, basically, they can encourage an army of startups to develop new apps, and then if any turns out to be a big money maker, they can shut it down and replace it with they own.