Netflix Petitions FCC to Block Comcast/TWC

Says The MSOs Are In Best Position To Foreclose OVD Competition, Degrade Traffic
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No big surprise here, but Netflix has petitioned the FCC to deny the Comcast/Time Warner Cable, citing interconnection issues as a big reason.

Netflix has complained that the paid peering deal it struck with Comcast (and subsequently with TWC) was essentially under duress and to prevent Comcast from slowing or degrading its traffic. Comcast has disputed that characterization.

The company argues both Comcast and TWC have already demonstrated their ability to leverage interconnection control to raise costs (the paid peering deals) and foreclose OVDs.

In its comments to the FCC, Netflix said the deal threatened over-the-top video providers because the combined company would have even greater ability to foreclose online competition and slow or degrade traffic for customers who have paid for speed and access.

The point about giving customers the speeds they paid for is a sore point with FCC Chairman Tom Wheeler, who has said ISPs need to make sure they are delivering on those promises.

Netflix says that the FCC has already found that Comcast has the ability and incentive to discriminate against OVDs (there are conditions in the NBCU merger to prevent that), and claims that Comcast has manipulated interconnection points to "harm" Netflix.

Netflix says allowing the deal would only extend that harm to TWC's customer base.

Comcast has argued that merging with TWC will allow it to better compete with national programming platforms like Netflix, but Netflix suggests Comcast will try to forestall OVD competition while it makes the transition to IP delivery, a line already being blurred by Comcast services like Xfinity, Streampix and the X1 platform.

"The preservation of its core video business and protective layer of bundling provides applicants with their clearest incentive to harm OVD's that they perceive as potential competitive threats," says the company.

To check out more of Netflix's 99-page argument, click here.