Does Cable Fear Netflix and Online Offerings Could Streaming Bring An End...

Does Cable Fear Netflix and Online Offerings Could Streaming Bring An End To The Pay TV Model

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Netflix has been one of the loudest voices for net neutrality since the rules were struck down and is now becoming one of the strongest voices for changing the entire model of the Internet as we know it. The company which has been fighting a public relations war with ISP’s like Comcast and Verizon over accusations of throttling (slowing down connection speeds for the service) in order to degrade its signal has even gone as far as to roll out experimental messages aimed at customers informing them that the reason their latest video binge session has been interrupted was due to the shoddy connection speeds provided by their ISP’s and not the online streaming network. In its comments to the FCC regarding net neutrality it called out the companies for their practices and the FCC for giving them the legal cover to do so. Netflix is now urging law makers to change the paradigm of the Internet by redefining high speed Internet as a utility. Read the full statement from Netflix here.

What is the difference?
Let’s think of what our utilities are. Water, electricity even the old land line (not the ones from the cable company) phones that so few still have.

Shows like House Of Cards Rival Game Of Thrones in reach.
Shows like House Of Cards Rival Game Of Thrones in reach.

These are services that are deemed so necessary for normal life and the functioning of our modern society that to allow a company to drive its use to some sort of market value would put too much power to control people’s lives in the hands of a for profit company. How much would you pay to keep the lights and heat on during the winter if the price were based on open market principles? Would anyone want Pepsi to sell water to a home in the same fashion that it sells water at a football game in September? If the market value for water is four dollars a bottle how expensive would it be to take a shower? What Netflix and others are pushing for is a change in the way that high speed internet is regulated so that it can exist as an essential service without constant price hikes at the whim of a CEO.

Netflix Sees This As A Fixed Point In Time
The authors of the letter paint a picture of this period as a time of peril for communication in the modern world
“The Internet is at a crossroads. Down one road—a road defined by the Commission’s failure to put in place meaningful open Internet rules—is an Internet that looks more like cable TV, one characterized by legalized discrimination, carriage disputes, gamesmanship, and content blackouts which harms consumers. Down another road is a scalable, more affordable, and open Internet built on strong network neutrality rules and a policy of settlement-free interconnection to last mile ISP network,” say the authors. “The Internet is improving lives everywhere—democratizing access to ideas, services, and goods. The Internet has grown into the amazing medium it is today largely because information is received by the person requesting it efficiently, unimpeded by gatekeepers. In other words, “the Internet’s remarkable ability to generate innovation, investment, and economic growth is a product of its openness.”

Cable Trying to kill Netflix and competition from streaming before it fully takes hold
In a section labeled “Paid Prioritization Is Bad Public Policy” Netflix laid out an argument that broaches antitrust issues. Pointing out that cable

Netflix and Amazon offer customers High Quality viewing experiences outside of the Pay TV sphere.
Netflix and Amazon offer customers High Quality viewing experiences outside of the Pay TV sphere.

companies would essentially be allowed to decide which services win and which ones whither on the vine.

“Through an open Internet, the consumer, not the ISP or the edge provider, picks the winners and the losers. Prioritization turns this successful model on its head, effectively allowing ISPs to choose what their subscribers see and do on the Internet and from whom they get their content” Say the writers of the letter. “Netflix also adds Pay-for-priority also would enable terminating ISPs to increase costs for online rivals or degrade their services.”

It is the online rivals argument that takes aim at the real issue here. Netflix sees the writing on the wall as well as the ISPs/cable services themselves. Netflix is a threat to the current model that cable has been profiting from. Its original shows were nominated for 31 Emmy nominations. Netflix has more than 40 million subscribers, which ranks ahead of HBO, the pay TV industry’s favorite wrecking ball to swing at perspective cord cutters besides live sports. Netflix has not come out and said it, but it appears to see the end of net neutrality as a way for ISP’s/Cable to crush competition from Netflix and other providers of high definition content before it gains a foothold in the middle class via the emerging population, which is far less likely to sign up for cable than their parents.


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