Netflix CEO Reed Hastings posted a write up on the company’s blog yesterday detailing the recent Comcast peering agreement it entered into, doing so with calls for a stronger form of net neutrality. Today AT&T’s Jim Cicconi has responded to the blog post, calling it “dramatic”.
Says Cicconi, Netflix wants “people who don’t subscribe to Netflix [to] nonetheless” pay for it. He goes on to detail the business nature of the arrangement, pointing out the bandwidth consumption of streaming video and that companies are required to expand their capacities to handle the traffic demands.
After pointing out that Netflix’s subscriber numbers have increased in recent years, he says that Hastings’ write up “comes down to which consumers should pay for the additional bandwidth being delivered to Netflix’s customers.” The cost is presently offset to Netflix’s subscribers, he says, and “in Netflix’s view, that’s unfair.”
Netflix wants the cost to be spread out among all broadband subscribers, says Cicconi. He then uses an analogy about Netflix’s DVD shipping days and forcing subscribers’ neighbors to pay the cost of shipping. “…that’s effectively what Mr. Hastings is demanding here, and in rather self-righteous fashion. If there’s a cost of delivering Mr. Hastings’s movies at the quality level he desires – and there is – then it should be borne by Netflix and recovered in the price of its service.”
SOURCE: AT&T Public Policy