Netflix CEO Reed Hastings delivered some pointed thoughts about Comcast’s play for national broadband dominance and the world of net neutrality while speaking at a conference in California this morning.
Hastings spoke in no uncertain terms before the audience at Code Conference today, making clear his issues with the ever-growing scope of Comcast.
He called residential internet a “natural monopoly,” which in most places it is, and drew attention to the fact that for most consumers, the only non-cable option is fiber — and even that’s limited. Cable, Hastings said, is pretty much the entire residential internet.
That turned the conversation to the recent peering deal Comcast and Netflix made earlier this year. Comcast continues to claim that Netflix is thirty percent of their internet traffic, and so should pay its fair share. Hastings quipped, “We offered to pay 30 percent of the costs if we get 30 percent of the revenue.” Comcast was not particularly interested in that arrangement.
Though the details of the arrangement between Comcast and Netflix remain confidential, Hastings expressed his displeasure with the fact that it needed to exist at all. The principle of the thing, he said, is the problem. “They want the whole internet to pay them for when their subscribers” do anything online. It starts with a small charge now, but over time, Comcast will want more and more. “Not just us, but to the whole internet,” Hastings said.
Comcast’s double-dipping money-making doesn’t just face the consumers, after all. It can hit businesses, too. And of course, it’s not just Comcast. Now, Netflix has to cut similar deals with everyone else, too.
Hastings pivoted from there to say that’s why Netflix endorses net neutrality: “If you have a monopoly structure, you need some protections,” he said. “That’s why we’ve been talking about creating an Internet with no slow lane.”
“When you listen to the radio more, it doesn’t cost you more,” explained Hastings. “But with gasoline, you pay more. The Internet is much closer to radio than to gas. There’s only a marginal increase in costs.”
Hastings has been on the record before saying that the Comcast/TWC merger is a terrible idea. When asked why he and his company have been such staunch and solo voices against the Comcast merger and for net neutrality, Hastings readily admitted that it was in the company’s best interests to do so. But, he added, someone has to:
“Someone has to stand up for what’s important. We’re raising the question –- [Comcast will] have 40 percent of residential Internet – what does it mean when one company has that kind of control?”
Data caps, higher prices, and even tighter control, that’s what. Netflix doesn’t see Comcast as the competition; that place is reserved for content companies like HBO. But it does need to get to viewers to succeed. And for that, it needs Comcast.
For more, not only about Comcast and net neutrality, but also about upcoming Netflix shows and why its DVD-only spinoff failed, check out the full liveblog at Re/Code.