Netflix Is Totally In Favor Of Charter’s Plan To Buy TWC Because It Will Save Them Some Money

timecharterlogoNetflix is almost 37% of all prime-time internet traffic. ISPs have been known to degrade that traffic until Netflix pays for peering. Netflix really hates having to make (and pay for) those agreements. And so Charter has quickly learned that the quickest way to Netflix’s heart is to promise not to do that.

Netflix pledged their support for the merger in a filing with the FCC today, after Charter made their pledge in the same way. Bloomberg spotted the filings.

In one document, Charter promised to maintain its policy of not charging for peering connections through the end of 2018. In a different but perfectly timed separate document, Netflix told the FCC that Charter’s peering policy makes the merger plan in the public interest.

“Charter’s new peering policy is a welcome and significant departure from the efforts of some ISPs to collect access tolls on the internet,” Netflix writes. “Netflix believes that this new policy and the commitment to apply it across the ‘New Charter’ footprint is a substantial public interest benefit … Accordingly, Netflix supports the proposed Charter-Time Warner Cable transaction.”

Netflix reached a paid peering agreement with Time Warner Cable about a year ago, sometime in the summer of 2014. The streaming video juggernaut also pays Comcast, AT&T, and Verizon for direct access to those ISPs’ customers.

If Comcast had succeeded in its bid to buy TWC, not only would Netflix have had to keep paying up, but also Comcast would have had such nationwide leverage that the price tag on that agreement could have gone up considerably. And indeed, Netflix strenuously opposed that merger, with CEO Reed Hastings at one point saying that Comcast was out to control the whole internet.

Of course, that plan did not work, clearing the way for Charter to try to succeed where Comcast failed.

The FCC has opened a docket on its review of Charter’s merger plans, but has not yet set a pleading cycle for public comment.

Netflix to Support Charter Acquisition of Time Warner Cable [Bloomberg News]

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