Netflix Says Comcast Double Dips With Interconnection Fee

Continuing its campaign against Comcast's merger with Time Warner, Netflix is telling the Senate that the deal will harm both consumers and competition.

“The proposed merger will result in online video content providers paying higher prices for access to Comcast customers or delivering poorer service to customers who depend on Comcast for broadband access,” Christopher Libertelli, vice president for global public policy at Netflix says in a letter to Sen. Al Franken (D-Minn.). Libertelli was responding to Franken's recent invitation to weigh in on the proposed acquisition.

The letter also addressed Netflix's recent “interconnection” deal with Comcast, which involves Netflix paying a fee to connect directly to Comcast's servers. Libertelli says the company did the deal in hopes of improving its subscribers experience with streaming video. “Prior to our agreement to interconnect directly with Comcast, Netflix purchased all available transit capacity into Comcast’s networks from multiple transit providers. Every single one of those transit links to Comcast was congested ... resulting in poor video quality for our members,” Libertelli writes. “Until Netflix agreed to pay Comcast, the more that Comcast subscribers requested Netflix content, the more congested these connections became, and the more that their Netflix video quality suffered.”

The company also specifically disputed a Comcast executive's recent assertion to the Senate that Netflix wanted to pay an interconnection fee directly “and cut out a middleman.”

“That is not an accurate description,” Netflix writes. “Netflix agreed to paid peering with Comcast to reverse an unacceptable decline in our members’ video experience.”

He added that the agreement with Netflix marked the first time that the company “was forced to pay an ISP for what amounts to access to their subscribers.”

The video rental company also blogged its opposition to the deal. “Netflix agreed to pay Comcast for direct interconnection to reverse an unacceptable decline in our members’ video experience on the Comcast network,” the blog post reads. “These members were experiencing poor streaming quality because Comcast allowed its links to Internet transit providers like Level3, XO, Cogent and Tata to clog up, slowing delivery of movies and TV shows to Netflix users.”

Netflix goes on to accuse Comcast of “double dipping” by charging Netflix to access subscribers, and also charging subscribers to access Netflix's streams.

Recommend (1) Print RSS