Netflix A Fallen Hero? Comcast Deal Washes Net Neutrality (commentary)

aNewDomain.net — This week Netflix entered into a streaming agreement with Comcast. Comcast is now the largest broadband monopoly after its takeover of Warner Brothers. Due to the deal, it’s looking like cable has won big time when it comes to the issue of streaming. A month ago I called Netflix an “Unlikely Hero.” That moniker comes into question as it moves closer to the largest cable provider, leaving Internet neutrality in the dust. Business seems to have come first … as it usually does. Netflix’s House of Cards is the final Comcastic joker for net neutrality.

The Haves and the Have-nots

The deal basically means that not all Internet traffic is equal. Some entities with deep pockets, like Netflix, will have preferential treatment. Faster streaming is the initial proponent, but blocked and allowed content is another issue. This model kills the basic concept of net neutrality. The broadband providers have increased their powers with each new deal, and teaming with Netflix is at the top of the list.

The change represents a fundamental shift in power in the Internet economy, which threatens to undermine the competitive market structure that has served Internet users so well for the past two decades. The deal will also transform the debate over network-neutrality regulation. Officially, Comcast’s deal with Netflix is about interconnection, not traffic discrimination. But it’s hard to see a practical difference between this deal and the kind of tiered access that this deal enables. House of Cards will be on your machine at the rate you wished for.

The LA Times wrote:

The Netflix-Comcast agreement shines a light on the obscure world of ‘peering agreements’ that govern how big companies exchange traffic on the Internet. To improve the quality of its streaming service, Netflix had been commissioning third parties, such as Cogent Communications Inc., to deliver its video traffic across the Internet to Comcast and other Internet providers. But Netflix wanted to cut out the middleman and deal directly with Comcast.”

New Unlikely Heroes: Google and Andreessen?

A month ago we called Netflix an Unlikely Hero — very unlikely, in fact, as it did not want to wait for the FCC regulators to fix net neutrality. The FCC moves slowly, and the issue of net neutrality will certainly not be decided in D.C. anytime soon. But now it seems Netflix has leaned the other way. It is not quite clear. Meanwhile, Google, with its fiber initiative in more than 30 U.S. cities, could be the real competitor who fights this conglomerate marriage. But it will take time.

As Forbes remarks:

Google recently announced an expansion of its fiber network, but at the rate its going, the country will be covered by sometime in the next century. Of course, if somehow other deep-pocketed tech companies with interests in greater network connectivity and perhaps openness– think Apple, Microsoft, Cisco — got involved, that might be advanced to 10 years from now.”

Marc Andreessen sees the entire concept differently. The venture capitalist recently argued that too much of the discussion about net neutrality assumes that the Internet is a static thing, rather than something that is likely to increase exponentially in terms of its demand for bandwidth. Andreessen feels that a strict or dogmatic adherence to net neutrality would likely “kill investment in infrastructure [and] limit the future of what broadband can deliver.” Andreessen‘s views carry a palpable urgency as fast broadband in the USA still lags far behind the Internet speeds of the world. 

The reality may become an Internet of haves and have-nots … Unless you are part of the cord cutters movement. In that case you would have not, but you wouldn’t be upset about it.

My piece about the unlikely hero of Netflix is just a month old. But it seems a month is a long time in business. Especially on key issues of national and consumer policy. I said: 

Netflix, that beloved media streaming service, may have just become our hero. Why? Last week’s federal court decision, an already-infamous event in the history of information and technology, has essentially spelled doom for the Federal Communications Commission’s restrictions on whether Internet service providers can provide preferential treatment to certain content. But Netflix, our hero, has come out staunchly in favor of net-neutrality regulation. Its streaming business depends on serving up large amounts of data. It’s a boon to the red-and-black providers of endless entertainment. Its 32 million customers can now be counted as supporters of the cause.

Those 32 million customers probably don’t care about most of this. About how the companies they pay change tactics for profit, almost always for profit. All that matters to most is how quickly House Of Cards streams. But it shouldn’t be that simple. These are large issues that will decide our interconnected future. Where do these emerging companies really stand?

For aNewDomain.net, I’m David Michaelis.

Based in Australia, David Michaelis is a world-renowned international journalist and founder of Link Tv. At aNewDomain.net, he covers the global beat, focusing on politics and other international topics of note for our readers in a variety of forums. Email him at DavidMc@aNewDomain.net.