TWC: Netflix Is Withholding Content to Gain 'Unprecedented' Access to ISPs

Operator Says It Is in Discussions on Connecting Into Netflix's Private CDN

Time Warner Cable said it is currently in discussions with Netflix on terms for connecting into the video streamer’s private content delivery network, but the MSO charged Netflix with unfairly holding back content in trying to get preferential treatment from Internet service providers.

Last week, Cablevision Systems announced a deal to participate in Netflix’s Open Connect private CDN. Under the agreement, Cablevision customers who are Netflix subscribers will have access to select “Super HD” and 3D content. Netflix saves money on third-party CDN transit fees by co-locating caching servers that store copies of the most-frequently accessed content at ISPs' data centers.

But Time Warner Cable complained that Netflix was improperly tying access to the enhanced video content to the CDN initiative.

“While they call it ‘Open Connect,’ Netflix is actually closing off access to some of its content while seeking unprecedented preferential treatment from ISPs,” Time Warner Cable said in a statement to Multichannel News. “We believe it is wrong for Netflix to withhold any content formats from our subscribers and the subscribers of many other ISPs. Time Warner Cable’s network is more than capable of delivering this content to Netflix subscribers today.”

Asked for a response, a Netflix spokesman said, "Open Connect provides Netflix data at no cost to the location the ISP desires and doesn't seek preferential treatment. We hope Time Warner [Cable] will join the many major ISPs around the world who are participating in Open Connect to reduce costs, minimize congestion and improve data delivery to enhance the consumer experience."

Netflix’s relationship with ISPs has been contentious at times. Executives at the company, whose streaming video accounts for as much as 33% of peak downstream bandwidth consumption by one estimate, have argued to policymakers that ISP bandwidth caps and usage-based pricing practices are anticompetitive and will inhibit Internet video consumption.

In addition to Cablevision, other ISPs participating in the Netflix Open Connect CDN include Google Fiber, Clearwire, Virgin Media, British Telecom, Telmex and Telus.

In a statement last week, Cablevision president and CEO James Dolan said the Open Connect CDN will deliver “a higher-quality Netflix viewing experience for Optimum customers than Verizon or AT&T can provide, including access to new Netflix Super HD and 3D TV shows and movies.”

Terms of the agreement between Cablevision and Netflix were not disclosed. According to Netflix, Internet service providers can participate in Open Connect at no cost.

Netflix’s Super HD format provides better picture quality than is available via “full HD” 1080p format, according to the company. Super HD titles, which require a minimum 5 Megabit per second connection, initially will be available on Sony's PlayStation3, Nintendo Wii U, Windows 8, Roku, Apple TVs with 1080p, and select smart TVs and Blu-Ray players. In addition, in the U.S., Netflix is also offering a small number of titles streaming in 3D through Open Connect partners.

Netflix provides more info on Open Connect at