Netflix Hunkers Down in Battle for Net Neutrality
Netflix (NASDAQ:NFLX) is no stranger to the battle for net neutrality, the philosophy that all Internet data should be treated equally. The streaming service put out a blog post in March about why it supports the concept (besides savings for the company). Netflix even recently went to the Federal Communications Commission about net neutrality after paying Verizon (NYSE:V) and Comcast (NASDAQ:CMCSA) to maintain its service.
Net neutrality in the United States may not be dead, but it is certainly on life support. A court ruling earlier this year decided that it is not a violation to charge for higher speeds and greater data usage. In the United States, the Internet has traditionally been available for one access rate — it didn’t matter if the user used the Internet to check his or her email once a month or if he or she used the Internet for more than 12 hours a day.
Either way, the user would pay the same fee. The FCC’s Open Internet rules helped sustain this system. Then, a federal appeals court struck down several provisions of these Open Internet policies, opening the door to an Internet service cost structure similar to cell phone data. Some services have even begun to advertise for this fast lane of the Internet. Companies on the side of this new policy are service providers like Verizon and Comcast. Netflix, Google (NASDAQ:GOOG), and Yahoo (NASDAQ:YHOO) are among the companies trying to prevent net neutrality from becoming obsolete. These technology firms deal with large amounts of data, making the loss of net neutrality expensive for them in addition to their customers. While Netflix has been a particularly vocal advocate for net neutrality, Google has been an ally in this fight through its Internet Association, which put out a statement regarding net neutrality in late April.
Some reports speculate that Internet giants are planning another SOPA-style blackout in protest of the new threat to Internet connectivity. On the other side, the FCC is preparing new proposals to navigate the landscape. The federal agency has already said that services cannot deliberately slow down a service, but added that it is acceptable to offer faster speeds or better service to some services over others. FCC Chairman Tom Wheeler wrote some potential new rules that would help Internet providers to do exactly this; before heading the FCC, Wheeler worked in the cable industry. A vote on the potential policies is expected May 15.
Netflix Chief Executive Reed Hastings posted his opinion on his Facebook page when news of these potential rules came out. “Tolls coming for the Web thanks to FCC. What is the FCC thinking?” he wrote. The battle for net neutrality continues. For those who remember the Internet’s reaction to SOPA and PIPA, expect déjà vu.