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Netflix Wants Government Help For Data Caps
Tells Congress Caps Are All About Protecting TV Revenues
by Karl Bode 09:38AM Wednesday Jun 27 2012
Netflix, who once thought bandwidth caps were no big deal, not too long ago finally realized that they can indeed be used anti-competitively to put services that compete with an ISPs content at a competitive disadvantage. Since that time they've been heavily criticizing "cap and overage" ISP pricing models, arguing that they're in no way based on economic or network congestion realities, but are instead primarily used to drive already-expensive broadband prices up, and to drive Internet video competitors out of business.

Though the chance of any real net neutrality consumer protections are essentially dead in the United States for now, the subject has seen renewed interest after it was revealed Comcast Xfinity content on the Xbox 360 doesn't count against their usage cap. Netflix likewise has turned up the heat, recently offering a presentation at the FCC highlighting how such caps are being used anti-competitively. In prepared statements before a House communications and technology subcommittee hearing today in Washington, Netflix put it rather succinctly:
“When you couple limited broadband competition with a strong desire to protect a legacy video distribution business, you have both the means and motivation to engage in anticompetitive behavior,” David Hyman, Netflix’s general counsel, said in testimony submitted for today’s hearing.
The result has been a DOJ investigation into not only whether cable is involved in anti-competitive behavior against over the top video operators, but whether cable companies are violating antitrust laws by conspiring to keep prices high. For his part, former FCC boss turned cable industry lobbyist Michael Powell this week insisted that any claims of anti-competitive actions by the cable industry are "flatly wrong." At one press hearing this week, Powell asked "Why would you want to frustrate consumers?"

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West Tenness

4 recommendations

loads of ignorance here

To all the anit-Netflix/pro-caps people

A) Netflix already pays for bandwidth

B) ISPs customers already pay for bandwidth

So the whole "Netflix needs to pay it own way" argument is bullshit.

C) Some of these companies are or will move to overages. Which means as long as you're willing to pay more you can use more. Um ok. If caps are their to prevent congestion then allowing people to use more doesn't prevent congestion. Doesn't matter of they are paying more use is use. Smell that? It's call bullshit form ISPs. And if someone tries to say that extra money will go to pay for infrastructure improvements that's BS too.

1)That extra money is INSTANTLY used? Supposed congestion would be happening NOW. Improvements take YEARS. So how does that help NOW? ISPs are going to allow congestion for years? Makes perfect sense.

2)That extra money will go into the pockets of the CEOs and investors not improving infrastructure. So the whole notion that forcing Netflix to pay more and ISPs would actually use that extra money to improve their network is hilarious.

D) Did it occur to ISPs the whole reason why people pay $50+ a month for hi speed internet is BECAUSE of companies like Netflix? If all an ISP expects me to do is check e-mail, sports scores, weather, pay bills and do my fantasy football well I can use their much cheaper 3 Mbps tier to do that. I wonder how they would like LESS money from me every month? Oh wait since I have a smartphone and I'm forced to pay a data fee on it anyways I can do all that stuff on that on my phone so I don't need internet from my ISP at all then.

E) If Netflix and others have to pay ISPs well guess what, they aren't going to. Like ALL businesses, that cost will passed on to the customers.


Hazelwood, MO

1 edit

2 recommendations

reply to ITALIAN926

Re: idea !

And if Microsoft wants to sell XBox Live, they should build their own network to your house.

And when Vonage wants to sell IP Phone service they should build their own network to your house.

And when Sony wants to give away their online gaming service they should build their own network to your house.

And when OnLive wants you to get their service they should build their own network to your house.

And when.....

I could go on forever, but instead I will simply say Shut up and get a clue about the internet!

ISP's are dumbpipes trying to be relevant. You need nothing more than an IP address from them and you can get EVERY service you want on the internet EXCEPT those things specifically blocked so you can't.

EDIT: Let me correct my above last statement. ISP's are dumbpipes AND TV providers trying to stay relevant and protect their failing business model.



2 recommendations


Caps have nothing to do with congestion. If they wanted to curtail congestion, they could throttle people over a certain amount of data or throttle everyone during peak times. Most of us know exactly what the cable co's are up to except maybe the shills that visit this site.

There is no competition and if there were, the natural progression would be prices going down and not up, which seems to happen several times a year now. Remember dial-up? How many dial-up providers were there? Prices went down, caps went away if there were any, and there was plenty of competition. Now all that remains is usually the cable co and the phone co in an area, both of which have been monopolies in their own regard for a long time.

Snohomish, WA

1 edit

3 recommendations

reply to Alex J

Re: idea !

Sounds like the history of the cable industry fighting existing "free TV"(really TV ad companies and local gov't seeking control)... And yes, they made the INVESTMENT, and now reap the profits.
I guess your grandparents should have planned ahead and built a muni network instead of letting someone else do it.

Elwood Blues
Somewhere in

2 recommendations

It's about protecting legacy systems

IF you think the MPAA/RIAA were bad, ISP's that are also TV network owners and TV distribution owners are worse.

They want eyeballs on their properties and F*K everyone else. It's really bad in Canada, we're lucky to have 3rd parties riding on the last mile,that gets us around incumbents, but it's not an easy ride.
No, I didn't. Honest... I ran out of gas. I... I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake.......

Snohomish, WA

2 recommendations

SO Netflix* wants...

the cost of delivering their service shifted to the customers of various ISP's**, even if many of the ISP's customers are not Netflix customers, and that is somehow pro-consumer?
I don't think so, let netflix and it's customers (of which I am one.) pay for their own costs.

*a for profit corporation
** MAY be a for profit corporation, or a not for profit consumer owned muni or co-op.