Netflix CEO Rips Comcast On Net Neutrality

It’s been a few weeks since Comcast announced that data chewed up by customers who use the cable company’s Xfinity Xbox app won’t count toward their monthly data cap. The move ignited a debate over whether or not Comcast was unfairly making its product more readily available than those provided by others, like perhaps… Netflix. Well, yesterday, Netflix CEO Reed Hastings decided it was time to make his position known.

Posting on his Facebook page, Hastings wrote:

Comcast no longer following net neutrality principles.

Comcast should apply caps equally, or not at all.

I spent the weekend enjoying four good internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu.

When I watch video on my Xbox from three of these four apps, it counts against my Comcast internet cap. When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast internet cap.

For example, if I watch last night’s SNL episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all.

The same device, the same IP address, the same wifi, the same internet connection, but totally different cap treatment.

In what way is this neutral?

Comcast argues that the Xbox app doesn’t count toward data usage because the data does not go through the public Internet, but through a more direct connection.

Wrote GigaOm’s Stacey Higginbotham at the time of the initial Comcast announcement, “Unlike content coming in from a service like HBO Go or Netflix, which does go over the top using the public Internet, this travels from Comcast’s servers over its network, to hardware authenticated by Comcast to your TV.”

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  1. Alliance to Restore the Republic of the United States of America says:

    Let the dismantling of cable company monopolies begin!

    • Torgonius wants an edit button says:

      As soon as someone comes up with a realistic solution to the cost of entry barrier, it could happen.

      No company is going to spend the money to lease space on the current poles, run cabling and establish a head-end without some form of quasi-guaranteed return on investment in terms of homes per mile of plant.

      When the first companies set up shop, they had to run cable and lease space on poles, but they were doing so into an untapped, ready and willing market. Where I worked, if there was a density of 20 homes / mile of plant, it was considered a safe investment. At 14 homes / mile, they’d pre-sell to make sure they’d recover costs, and then run the cable. At a density of less than 14 homes per mile, the individual customers would split the cost of the plant install.

      Verizon was able to make inroads with FiOS because in many cases, they either already owned the poles or could tack on their cable to existing leases. Fiber optic cable has become progessively less expensive since it was introuduced.

      A brand new cable company would face too many financial challenges to be considered a safe investment.

      • Alliance to Restore the Republic of the United States of America says:

        How do you explain away the many lawsuits citing “unfair competition” companies like Comcast file when a city/county/state/whatever decides it wants to install and run its own internet and infrastructure?

        Poles and cable costs money. Got it. Doesn’t stop the obvious power grab by cable companies to both control content and content delivery infrastructure, which is called “monopoly” in most circles.

        You can make as many arguments as you want for Comcast, but the end result of what they do is brazenly using their power to stifle fair competition.

      • Alliance to Restore the Republic of the United States of America says:

        Geez, I just re-read your comment and realized I was so eager to berate Comcast that I completely misjudged your comment and ended up replying like a complete dick. I apologize.

        • Torgonius wants an edit button says:

          It’s cool. I wish it was an easier nut to crack.

          With 20/20 hindsight, it’s easy to blame the municipalities of the time setting the table for monopolization by granting exclusive franchises.

          But then, even if they had allowed for 2 or more companies to set up shop at the same time, would there have been enough companies willing to go for it knowing they’d have to compete for customers, and look at realistically getting only 40-60% of the customer base?

          The cost of entry for satellite isn’t a cakewalk, either. Those birds don’t get in the air cheap, and there’s still the entire uplink facility to construct. And then you’re still behind the curve when it comes to Internet/Telco service in addition to the TV signal.

      • xantec says:

        And yet somehow Sonic.net is able to run their own fiber in California, using the utility poles no less, and offer 1Gbps for $70. How exactly is the cost a barrier to entry again?
        http://arstechnica.com/tech-policy/news/2011/06/1gbps-fiber-for-70in-america-yup.ars

  2. Rena says:

    So it doesn’t count because it only has to go from Comcast to you, instead of from someone else to Comcast to you. Seems backwards to me. It’s the “from Comcast to you” part that costs them, is it not?

    A bit like saying delivering a package across town containing something you made is different than delivering a package across town containing something you imported.

    • MyTQuinn says:

      It seems “forwards” to me. Content originating within Comcast’s network being delivered to Comcast subscribers travels solely on networks owned by Comcast. While they must maintain the infrastructure necessary for the transmission, there’s no incremental cost associated with delivering any specific content or piece of data. On the other hand, content originating elsewhere must be delivered to Comcast via their connection to the Internet, which does not come free, and almost certainly has an incremental cost resulting from the additional bandwidth usage.

      I still don’t think it’s fair that they can offer a product that competes with 3rd party services and give themselves an advantage over those same 3rd parties.

      • BobOki says:

        That is completely untrue. Comcast does not have thier own lines 100% of the way through their network. There are PLENTY of aeras and hops that go through switches and lines owned by other companies. For instance in my area there is a single pipe coming into the city from uunet (I think Verizon bought them) and i can promise you if I use the app I would not get any data taken from my cap. That is data over “internet” lines.
        While SOME traffic very well stays 100% in their own network it is just not true to say all does. other good examples are when comcast has to use lines into business buildings owned by other companies. Comcast has to pay for the use of those lines, it is not their own network, but still it would not count towards a cap. This by definition is the anti-competative stuff that got Ma Bell broken up and Microsoft nailed. Can’t wait to see them get nailed too.

        • MyTQuinn says:

          Like I said, I don’t think what they’re doing is fair. But if what you say is true, then they really are giving their content/services special treatment and *THAT* should not be allowed.

    • Southern says:

      So it doesn’t count because it only has to go from Comcast to you, instead of from someone else to Comcast to you. Seems backwards to me. It’s the “from Comcast to you” part that costs them, is it not?

      No, it’s not. Data that stays within the Comcast network means they don’t have to pay someone “upstream” for that data.

      Just like now, if you have a Verizon cell phone, you can call anyone else on Verizon for free, because the call stays within the Verizon network and they don’t have to pay another company for handling that call (such as if you were to call an AT&T customer). (I’m sure Verizon isn’t the only one that does that, it’s just the only one I know that does, having had Verizon in the past).

      So for instance, if I watch a NetFlix movie, a Tracert shows that the data passes from NetFlix, to a company called NTT.NET (a Tier 1 Internet Backbone provider), then to AT&T (for U-Verse), then to me. So if I watch a Netflix movie, AT&T has to pay NTT.NET for that bandwidth.

      Now if I watch an “On Demand” movie through U-Verse, where the data would stay completely within the AT&T network, then they don’t have to pay anyone for that bandwidth (or if anything, it would just be an internal charge, shifting between different divisions on paper).

      • c152driver says:

        My understanding has always been that the bottleneck with cable Internet is the local cable loop, not the Internet backhaul, in which case it doesn’t matter if it’s Comcast Xfinity video or Netflix. They’re both adding traffic to the local cable loop. I think Comcast is being disingenuous.

      • Jawaka says:

        So its a cost issue and not a bandwidth issue then unlike what they’ve been trying to tell us.

        • Kuri says:

          Well, it’s easier to feed people a technical sounding reason than it is to say “we just don’t want to pay for it”

    • Lyn Torden says:

      Think of it as “local” vs. “long distance”. It costs them more to deliver data over long distance lines (to the internet) than through local lines. The Xfinity stuff is duplicated all over their network so the core network only needs to make ONE delivery to each of the systems for new stuff, instead of hundreds of parallel deliveries for everyone watching.

      The theory here is since this isn’t using the core data network or the internet gateways, you shouldn’t be “charged” for that.

      This is still a net neutrality issue. But it’s one of not allowing others to position themselves throughout Comcast’s network this way.

  3. techstar25 says:

    This is a great example of why it’s so bad for consumers when one company owns the content, the delivery network, and the decoding hardware.

  4. world-inferno says:

    I work at Comcast. Just wait till we have “Streampix” up and rolling… I’m sure Netflix will magically start not working real well then when you call to complain we’ll just casually recommend switching to our streaming service for only $4.99 a month lol

    • Carlos Spicy Weiner says:

      If you’re allowed to say, what is Streampix?

      • world-inferno says:

        well it’s already live, just not much of a selection yet. It’s comcast’s response to netflix. Google it, you’ll see what I’m talking about.

        • Carlos Spicy Weiner says:

          Seems only natural Comcast would “upgrade” On Demand to be more like Netflix delivery. But what’s really the difference?

    • Alliance to Restore the Republic of the United States of America says:

      Please be the mole that leaks damning Comcast proprietary info to WikiLeaks or something.

  5. petermv says:

    I guess the data being transmitted is “magic” data as it doesn’t interfere with everyone else on their network. Also being quite different to that other data those evil bandwidth hogs use that necessitate having a cap in the first place

  6. Vox Republica says:

    Now I have to wonder whether or not it’s possible for a few dozen noble consumer activists using Comcast to constantly clog everybody’s pipes by ceaselessly streaming content over Xfinity apps (and NOT doing anything that would otherwise invalidate or contradict the EULA). This way, everybody’s service suffers, and then Comcast has to explain to people that these select few users aren’t being charged for their data hunger. Great moments in corporate homina-homina-homina.

  7. NeverLetMeDown says:

    The people paying for Comcast video service are also paying, in part, for the bandwidth they use streaming to the Xbox. If Netflix wants to start paying Comcast for the bandwidth its customers use, rather than have it count against the data cap, I’m sure Comcast would be happy to speak with them.

    • Alan says:

      I’m sure Comcast would love to charge netflix for what it is already charging it’s customers for.

      • NeverLetMeDown says:

        They’re not, though. They’re selling up to 250GB of any content you want via the Internet. If you go over that, you have to either pay more or switch plans. If Netflix wants to pay for the overage, on the customer’s behalf, then that’s up to Netflix.

        • petermv says:

          Yes, but the reason they have the cap in the first place is because of all those nasty data hogs that clog the pipes with their data. But, for some reason, the “magic” data that is part of this video service doesn’t clog those same pipes.

          Perhaps instead of worrying about this, they should just convert all the data to “magic” data and then they don’t have to worry about caps or clogged bandwidth or anything else, it will be all unicorns and rainbows.

          In other words, there is no need for a cap, because it doesn’t matter at all, this is purely away to get around net neutrality.

          • NeverLetMeDown says:

            Sure, using the Xfinity app on the Xbox clogs the pipes (if you want to use that analogy). But it also generates revenue for Comcast, which supports the expansion of those pipes, so the network impact is offset. If you want to use more than 250GB of data, somebody pays for that. In the case of Xfinity, it’s you (through your cable TV bill). In the case of Netflix, it’s either you (through overage charges) or, if they want to pony up to offset the cost to you, Netflix.

            • Uphoria says:

              Your idea falls flat on its face when you realize this:

              You pay X and get 250 gigabytes a month. This is a set number. Use less, and you will get nothing in return. use more and you WILL pay more.

              user pays netflix 7.99 for streaming only. in 3 months uses 50, 250, 450 gigs. First month he paid for something (comcast) he didnt use, second month he did, and third month he did but overdid it and might pay more.

              User pays streampix 4.99 a month. in 3 months uses 50, 250, 450 gigs. First month he paid for something he didnt use (comcast), second month he did, third he overdid it and pays more.

              Reasonably the 4.99 a month is “competitively priced” to force out netflix, since they have to pay for licensing to get movies on there.

              So reality – Comcast only makes 4.99 a month. If you can use all 250 gigs on streampix OR netflix, the reality is they only made the 4.99 a month more IF you sign up, and a lot of that goes into content, not delivery.

              All in all, comcast is trying to double dip the competition, and single dip themselves to look more attractive. Pure and simple monopoly tactics. Look at M$ and Internet Explorer.

        • Talmonis says:

          Look kids! A corporate shill!

    • LanMan04 says:

      If Netflix wants to start paying Comcast for the bandwidth its customers use, rather than have it count against the data cap, I’m sure Comcast would be happy to speak with them.
      —————
      BZZT, wrong, try again. I, the Comcast customer, am ALREADY PAYING for that bandwidth. Comcast doesn’t get to double-dip, and that’s exactly what network neutrality is supposed to prevent!

  8. Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

    We need to get on with proving string theory so we can have quantum-entanglement modems. Then we won’t have to pay Comcast for their lines [i]or[/i] their poles!

    • RxDude says:

      String theory is a dead end. Quantum loop gravity provides more testable hypotheses.

      • Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

        Well bummer… Will firing the Hadron Collider still lead to the end of the world, or did Loop Gravity theory drop that notion?

  9. Andy Dufresne says:

    Comcast won’t allow the HBO Go app to work on my Xbox at all, yet it does work on my iPad. Stupid. You can access some HBO content through the Xfinity app, but it is very sparse (only 3 episodes of The Wire available, whereas the iPad app has ALL HBO content). Why allow one and not the other?

  10. personwholives says:

    So, if that’s the way it works, all data from within comcast’s network is free, does that mean my torrents are free, so long as they only connect to other comcast customers? I should make that argument, then set up some clever ip filters and download every linux distro ever simultaneously and constantly. Seems like a sane argument, right?

    • LanMan04 says:

      Absouletly! I’d love to merge my LAN with a friend of mine a couple hundred miles away (also on Comcast) via VPN, so we could stream each other’s….err….Linux distros for no bandwidth charge.

      • BobOki says:

        Here here! Sounds to me like ALL companies out there should just put ALL their data/services on comcast lines, that way everything to EVERYONE IS FREE!

  11. mikesanerd says:

    I know this isn’t the point, but who uses Netflix, HBO GO, Xfinity, and Hulu all in one weekend…especially if you are the CEO of one of said companies. I think the netflix ceo needs to get a life…though he is right about this

  12. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    I don’t get this argument. If I have an X Box, and it’s getting data from my wireless router, and I run an application, how is it possible that the data is delivered differently? It still has to come from that green box on the pole across from the house, up the cable outside, and into the house & through the modem, to the actual device.

    Maybe this is just to complicated for me to understand.

  13. IrwinJacobs says:

    This is fundamentally no different than the way AT&T uVerse handles things: any kind of data entering my home through the uVerse cable to my computer counts against my usage cap whereas watching video content (and recording at the same time) delivered across the same uVerse cable to all four televisions in my home 24/7 (two of them HD), doesn’t count against my usage cap.

  14. Jawaka says:

    Ok so someone correct me if i’m wrong here (and I very well may be). Comcast and all other cable services provide a pool of bandwidth to neighborhoods which is why we may see our performance slow down a little during peak hours. This slow down is also why Comcast has their caps in place.

    so explain to me this. When I download a video from Xfinity via my Xbox isn’t it going through the same lines lines and using the same bandwidth from my home to Comcast as it would normally use if I were downloading the video from Netflix? My neighborhood would still see the same performance hit regardless of which service I downloaded the movie from the way I see it.

  15. necrosis says:

    If it does not use my bandwidth cap it should not count against my speed cap either.

    For sake of simplifying things.
    Speed Cap = 3MBit
    XBox streaming eats = 1MBit
    I should still have 3MBit to do whatever else i want even if my XBox is streaming content.

  16. Kuri says:

    I suppose it’s a lot easier for Comcast to feed us technobabble and to just be honest.

  17. CyberSkull says:

    The service is not entirely on Comcast’s network. You still have to authenticate on Xbox Live before getting service on the Xbox 360.