FCC Commissioner Questions Netflix's Net Neutrality Commitment

Eric Hopton for redOrbit.com – Your Universe Online

FCC Commissioner Ajit Pai has written an open letter to Netflix CEO Reed Hastings suggesting that the company may be guilty of applying double standards on network neutrality and openness, reports Chloe Albanesius for PCMag.com.

In the letter, Pai implies that the video streaming giant is advocating net neutrality while at the same time creating its own Internet fast tracking in the background.

So, is Netflix guilty of net neutrality hypocrisy as charged, or merely doing what big business is supposed to do by seeking commercial advantage over competitors?

Pai’s letter highlights the discrepancy between Netflix’s decision not to join the Streaming Video Alliance, and its introduction of its Open Connect content delivery system. This, says Pai, suggests that Netflix is “working to effectively secure ‘fast lanes’ for its content on ISPs’ networks at the expense of its competitors.”

The Streaming Video Alliance set up shop in mid-November. Its members include Netflix rivals Comcast, Level 3 Communications, Ustream, and Yahoo. But the world’s two largest streaming sites, Netflix and YouTube, refused to join the party. Netflix decided to go with its own purpose-built Open Connect network and promised to provide it free to ISPs.

Commissioner Pai, claims that Netflix has “taken – or at least tested – measures that undermine aspects of open standards for streaming video.”

He went on to say that “Specifically, I understand that Netflix has at times changed its streaming protocols where open caching is used, which impedes open caching software from correctly identifying and caching Netflix traffic. Because Netflix traffic constitutes such a substantial percentage of streaming video traffic, measures like this threaten the viability of open standards.”

If all ISPs were to install open caching appliances throughout their networks, he added according to Albanesius, all video content providers would be “on a level playing field.” But if ISP’s installed Netflix’s own proprietary caching system instead, said Pai, ”Netflix’s videos would run the equivalent of a 100-yard dash while its competitors’ videos would have to run a marathon.”

Mark Sullivan, writing for Venture Beat, points to Pai’s criticism of Netflix’s refusal to use an open standard. The implication is that this might have something to do with its desire to get ISPs throughout the country to install Netflix’s own proprietary caching servers inside their networks at no charge. All major ISPs have refused this, says Sullivan, except for Cablevision and Google Fiber, forcing Netflix to make deals with large ISPs.

Meanwhile, Tony Bradley at Forbes has a different take on the matter. Bradley believes that Commissioner Pai is wrong about Netflix and net neutrality and says that “The assertion that any attempt at developing or maintaining a competitive advantage is somehow in conflict with the principles of Net Neutrality is a silly leap in logic meant simply to confuse the issue and redirect attention from the fact that many on the FCC are working very hard to sell out the American people.”

Bradley finds it hard to get his head around how anyone, but especially a Republican, could go on the attack against a company simply for seeking a competitive advantage over its business rivals. That, as Bradley points out, is “the very essence of doing business in a free market economy.”

In the end, of course, Netflix will probably be seen as conflicted by the whole net neutrality debate. The company would claim that trying to offer better performance streaming services for end users is part and parcel of what it is supposed to do. Does that mean that Netflix’s advocacy of net neutrality is hypocritical? Bradley for one doesn’t think so and questions whether Pai is “advocating for some sort of socialist Utopia” in which there is nothing to differentiate individual providers. Taken to its extreme, Bradley believes that this could see Netflix being accused of opposition to net neutrality because it offers up better and more varied content than rival services or because its subscription are lower than some competitors.

In addition, even if Netflix is developing its own advanced streaming technology with greatly improved performance than its competitors, the company doesn’t operate in a vacuum and can itself benefit from net neutrality. Bradley makes the point that it would be pointless if Netflix continued to invest in research and development of technologies that improve its performance only to see rival streaming services “simply fork over cash to Comcast or Verizon to buy faster Internet delivery.”

So far, Netflix has declined to comment, but the letter has raised the debate about how net neutrality might or should work. Pai asked Netflix to respond to the allegations by Dec. 16.

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