It was reported that in the wake of new net neutrality laws, Netflix has agreed to pay Comcast to ensure that its movies and TV shows stream more quickly.
Now I already spent a few hundred words last week discussing how Netflix not only climbed out of a grave, but has thrived in the cutthroat world of television entertainment, but when it comes to this net neutrality business, things get a little more complicated.
Therefore, I figured I’d go back for a follow-up interview with our resident expert on all things net neutrality, Google (to get learned up on the basics of net neutrality, please see my previous interview with the monolith search engine).
Bryce Rudow: Google!
Google: Hello, Bryce.
Bryce Rudow: So there was some big news regarding net neutrality that happened this weekend.
Google: “Comcast, the country’s largest cable and broadband provider, and Netflix, the giant television and movie streaming service, announced an agreement Sunday in which Netflix will pay Comcast for faster and more reliable access to Comcast’s subscribers.”
Bryce Rudow: Yeah, that’s what I saw. So what exactly happened?
Google: “The exact details of the deal are a little murky, but it’s a long term contract that will have Comcast connecting to Netflix servers inside third-party data centers. The company has previously sought to have its servers placed directly inside Comcast’s data centers, but the new arrangement will still reduce Netflix’s dependence on middlemen like Cogent.”
Bryce Rudow: Sounds a bit dicey. Why did this all go down?
Google: “Netflix eats up an incredible amount of global bandwidth. In 2012, Netflix was estimated to hog 1/3rd of traffic in North America.”
Bryce Rudow: Oh wow. I had no idea. So who’s the big winner in all of this?
Google: “The deal will certainly be used by Comcast as evidence that its [recent merger with Time Warner Cable] should receive regulatory approval, even as it demonstrates the provider’s growing leverage over content providers.”
Bryce Rudow: So Comcast wins?
Google: “Netflix is essentially eliminating middleman providers like Cogent, whom Netflix had previously been paying to deliver traffic to Comcast subscribers…A certainty here is that quality of service (speed of Netflix streams) will be improved for Netflix content delivered to Comcast subscribers.”
Bryce Rudow: So Netflix wins?
Google: “The main takeaway of this agreement is that it is quite possible that the agreement is mutually beneficial to both, such that the barrier to entry around the delivery of Netflix-like streaming services may have just been raised.”
Bryce Rudow: So it’s two big companies using a partnership to elevate themselves even higher above their competition. That seems…capitalistic?
Google: “The deal confirms that if you’re a video company that wants to get your stuff from point A to point B through a broadband pipe, you have to pay a tariff.”
Bryce Rudow: So bye-bye smaller video companies. And this is all a response to the new net-neutrality laws?
Google: “According to sources close to the negotiations, the negotiations have been going on for over a year, including a CES meeting between CEOs Brian Roberts and Reed Hastings where the framework came together.”
Bryce Rudow: Hmm…interesting. What about other ISP’s?
Google: “Comcast, under terms of its deal to acquire NBCUniversal, signed a consent degree ending in 2018 in which it agreed not to give its own content preferential streaming treatment over other video providers.”
Bryce Rudow: And we feel good about this?
Google: “President Obama’s Senior Technology Advisor, Todd Park wrote, ‘Absent net neutrality, the Internet could turn into a high-priced private toll road that would be inaccessible to the next generation of visionaries.’”
Bryce Rudow: So we don’t feel good about this? Is there any kind of law that this is breaking?
Google: “The deal between Comcast and Netflix…may be legally outside of the traditional net neutrality rules.”
Bryce Rudow: Balls. So who is stepping up to do something?
Google: “The Federal Communications Commission plans to write rules that will forbid content blocking and ensure Internet providers treat Web traffic equally, FCC Chairman Tom Wheeler said last week.”
Bryce Rudow: The FCC plans to write rules? Is there anything that can get done quickly and efficiently in DC?
Google: Well in the first episode of the new season of House of Cards, Frank Underwood…
Bryce Rudow: WHOA! No spoilers Google! This is why I hate it when you start trying to fill in what I’m typing. I don’t why you think I’m always…
Google: Extremely terrified of Chinese people?
Bryce Rudow: I hate you Google.