Netflix CEO Slams US ISPs Over Net Neutrality

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Netflix CEO Reed Hastings says it reluctantly pays US ISPs for interconnection fees, but argues providers shouldn’t be allowed to abuse their position

Netflix CEO Reed Hastings says net neutrality must be strengthened if the Internet is to remain “humanity’s most important platform for progress,” and has lashed out at US ISPs which charge the video streaming service for ensuring additional capacity is available for its users.

Hastings says that many of its users suffer from buffering, poor video quality and long waiting times, despite the fact they pay a lot of money for fast Internet connections, because ISPs deliberately constrain Netflix unless it pays interconnection fees.

Netflix recently agreed a deal with Comcast and says it will “reluctantly” continue to pay such fees to protect its user experience, it says it will continue to campaign for net neutrality, because interconnection charges could prove prohibitive for smaller firms, stifling innovation on the web.

Net neutrality

reed hastings netflix square“If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future,” says Hastings. “Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service. The big ISPs can make these demands –driving up costs and prices for everyone else – because of their market position. “

Unlike the UK, where there is strong competition in the broadband market, US households often only have a limited selection of ISPs, something which Hastings believes is abused by broadband providers who know their customers have few alternatives.

“For any given US household, there is often only one or two choices for getting high-speed Internet access and that’s unlikely to change,” he explains. “Furthermore, Internet access is often bundled with other services making it challenging to switch ISPs. It is this lack of consumer choice that leads to the need for strong net neutrality.”

Netflix accounts for 30 percent of traffic on some ISP’s networks and the argument is that because the service uses so much bandwidth, the company should share some of the cost. However, Hasting retorts that if Netflix is forced to share the cost, then it should be able to share some of the providers’ revenues as well.

“Some big ISPs are extracting a toll because they can -they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay,” he continues. “Though they have the scale and power to do this, they should realize it is in their long term interest to back strong net neutrality.”

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