Netflix asks FCC to block Comcast/Time Warner Cable merger

27 Aug 2014

Streaming video platform Netflix has filed a petition with the US Federal Communications Commission (FCC) seeking to block the proposed Comcast/Time Warner merger.

The merger of broadcasting and cable company Comcast and media corporation Time Warner would result in the largest cable service in the US with more than 30m customers.

According to a 2013 report by Sandvine, Netflix is the biggest source of North American downstream web traffic, at 32.3pc.

At the heart of the issue is net neutrality and how in the US some ISPs are effectively charging internet companies tolls to allow consumers to surf the internet with adequate performance levels.

In February, Netflix agreed to a multimillion-dollar deal with Comcast in the US to ensure Netflix users could enjoy a fast service and not be throttled.

In the petition, Netflix’s legal representatives warned, “The combined entity would have the incentive and ability – through access fees charged at interconnection points and other means – to harm internet companies, such as online video distributors, which applicants view as competitors.

“The transaction would give applicants control of a dominant share of the nation’s residential high-speed broadband customers at a time when those customers increasingly engage with more content-rich applications that require high-speed broadband to work properly, such as internet-delivered video.”

Re-imagining how video content is consumed

Netflix described the present time as a critical time for consumers and said online video distributors have re-imagined the way in which consumers access and enjoy video content.

If anything, Netflix argued, this creates a virtuous circle whereby consumers will opt for more robust broadband services.

However, despite this boon, Netflix has warned that ISPs see players like Netflix as a threat to their core business.

“Comcast has already acted to lessen that threat by using its control over interconnection pathways to allow its own customers access to Netflix content to degrade until Netflix paid Comcast a terminating access fee.

“Online video distributors are particularly vulnerable to congestion and degradation of their services, owing to the myriad video providers available to consumers, the low cost of switching distributors and the sensitivity to congestion of video-streaming traffic,” Netflix said.

Netflix image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years