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AT&T Tells FCC It's Impossible, Impractical to Hinder Netflix

As AT&T pushes the FCC to approve its $49 billion acquisition of DirecTV, the company is promising regulators it won't use its gatekeeper power to attack over the top Internet video competitors like Netflix. As we noted last week, Netflix is pushing for conditions to the merger aimed at protecting Internet video operators, the company specifically highlighting last years interconnection squabbles (and corresponding Netflix streaming performance dip for AT&T customers) as an example of AT&T shenanigans to be wary of.

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You'll recall that Level3, Netflix and Cogent accused Comcast, AT&T, Verizon and Time Warner Cable of intentionally letting key peering points saturate as part of a quest to eliminate settlement-free peering, and force Netflix to pay new direct interconnection fees.

In a new, heavily-redacted filing by AT&T, the company claims that not only wouldn't AT&T engage in such behavior, it's technically impossible:

quote:
"AT&T could not effectively and persistently degrade any OVD [online video distributors] without degrading all OVDs and degrading any single OVD, much less all OVDs, would risk significant loss of broadband and bundle customers while saving few, if any, video customers."
AT&T also tried to claim that there's no way it would intentionally degrade Netflix traffic to use interconnection hikes as a revenue driver, because customers annoyed with degraded Netflix performance would leave AT&T:
quote:
"Providing high quality broadband services aimed at attracting and retaining profitable broadband and bundle customers is, and will remain, at the heart of AT&T’s business. The record shows that when AT&T customers drop broadband services, they almost always drop AT&T video and other entertainment services as well.

Thus, a degradation strategy would risk losing not only broadband profits, but also associated, and much greater, double and triple-play revenues and profits, which include video profits. Simply put, it makes no economic or business sense for AT&T to pursue the hypothetical OVD degradation strategy put forth by Netflix, either before or after the transaction."
Of course a lack of competition might stop AT&T customers, many of which are on usage-capped DSL, from switching to other companies. While the FCC's new net neutrality rules include a mechanism to file complaints over interconnection shenanigans, there's no guarantee the rules won't be dismantled by the flood of ISP lawsuits. As such, Netflix pretty clearly wants the FCC to include some conditions requiring AT&T be on its very best behavior.

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IluvMoney (banned)
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MiddleClass

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IluvMoney (banned)

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Pot calling kettle black

Netflix, in league with Cogent & Level3, are just as bad as AT&T, comcast, & others they accused, of trying to grab a bigger share of the streaming income pie. Cogent and Level3 are screaming like stuck pigs because the ISPs have cut them out of a bigger share of streaming video income from providers like Netflix and Amazon Prime.