Netflix CEO Proclaims The Death Of Net Neutrality Is No Big Deal

from the this-will-just-sort-itself-out dept

We've noted repeatedly that while Silicon Valley giants like Facebook and Google are portrayed as net neutrality supporters, that hasn't been true for many years now. Google stopped giving a damn about the idea back in 2010 or so when it started eyeing the broadband (Google Fiber) and wireless (Android, Project Fi) markets. Similarly, Facebook has never really been much of a genuine supporter, and has actively undermined the concept of net neutrality overseas in developing nations. Once they became powerful and wealthy enough, they stopped seriously worrying about the threat posed by broadband monopolies.

For a while there, Netflix jumped in to supplant Google as a major net neutrality supporter, frequently highlighting how usage caps can be used anti-competitively or how ISPs were abusing interconnection points and their broadband monopolies to drive up prices for competitors.

But as Netflix has grown more powerful, its advocacy for net neutrality has waned proportionally. The company has repeatedly made it clear that now that it's large and successful, it no longer really has to worry about being bullied by ISPs like Comcast, since it can now afford to pay the abitrary troll tolls they're keen on erecting around the internet:

"It’s not narrowly important to us because we’re big enough to get the deals we want,” Hastings said. It was a candid admission: no matter what the FCC decides to do with Title II, Netflix isn’t worried about its ability to survive. Hastings says that Netflix is “weighing in against” changing the current rules, but that “it’s not our primary battle at this point” and “we don’t have a special vulnerability to it."

That's arguably myopic, and it's unlikely the next Netflix is quite so confident. Because Netflix is wealthy and powerful enough to fend off anti-competitive efforts by AT&T, Verizon and Comcast, doesn't mean the death of the rules won't be problematic for thousands of small businesses, startups and entrepreneurs who'll be operating on a decidedly-tilted playing field.

Netflix doubled down on its myopia this week during the company's conference call with analysts and the media, when CEO Reed Hastings tried to insist that the death of net neutrality rules here in the States was no big deal. Why? Apparently, "consumer expectations" will somehow magically keep telecom giants on their best behavior:

"Around the world net neutrality has won as a consumer expectation," Hastings said Monday during a video discussion of Netflix's second-quarter financial performance. "Broadly around the world consumers have the expectation and ISPs are delivering it," he added, referring to Internet service providers.

"The net neutrality advocates have won the day in terms of those expectations," he said.

That's not how any of this works.

Consumers can have all the "expectations" they want in terms of a healthy, open internet. But expectations mean nothing in the face of limited broadband competition and napping or compromised regulators, since there will soon be no penalty for behaving anti-competitively. ISPs right now are on their best behavior because they're worried about adding fuel to the looming lawsuits against the FCC. But should ISPs win in court, we'll quickly get a crash course on how little "expectations" will matter in the face of unchecked monopoly power.

Filed Under: competition, net neutrality, reed hastings, streaming video
Companies: netflix