As the global streaming incumbent, it now has the impetus to slow competitors down.
Opposing Net Neutrality:
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It looks like success has changed Netflix, or at least its tune on net neutrality. The streaming giant – now that it is a giant – isn’t as supportive of keeping the internet free and open as it used to be, if recent comments by chief executive Reed Hastings are to be taken at face value.
“It’s not narrowly important to us because we’re big enough to get the deals we want,” he said at a recent conference in California, as reported by Techdirt. Hastings went on to say that Netflix still supports net neutrality, but “it’s not our primary battle at this point” and “we don’t have a special vulnerability to it.”
In light of that, the company isn’t planning to devote any special resources to fighting the Trump administration’s attempts at overturning rules that prevent internet service providers from interfering with traffic.
That’s in contrast to a few years ago, when Netflix led the lobbying charge against Comcast, Verizon and AT&T, all of whom were in favour of charging popular online services such as Netflix extra fees to have traffic flow faster across their pipes.
Netflix appears to be saying that the battle for net neutrality is somebody else’s fight now. But, as Techdirt’s Mike Masnick writes, “If Hastings thinks a viciously uncompetitive broadband sector with zero regulatory oversight ends well for anybody not named AT&T, Verizon, Comcast and Verizon – he’s fooling himself.”
He’s right, but the streaming company’s fizzling interest in the issue could actually turn into something worse. Having established itself as the global streaming video incumbent, Netflix now has much impetus to actually oppose net neutrality.
With competitors both big and small around the world now aiming to grab pieces of the streaming pie, the company has every reason to try and slow them down. Hastings’ comments also contain the germ of what form that opposition could take.
Net neutrality opponents frequently point out that the existing internet and all the wonderful things that ride on it, including Netflix, happened without rules that specifically prohibited ISP interference.
Netflix could easily join that argument by offering itself up as a poster boy and say, “Hey, we succeeded in spite of the fact that there were no rules helping us out, so why should anyone wanting to challenge us get a special leg up?”
The answer to that question should be obvious – regulatory oversight is always needed in markets that have only a few dominant players – but these sorts of supposed fairness arguments tend to get more mileage than they should, especially in the free-market-loving United States.
That’s not to say Netflix will definitely pull a full 180 on net neutrality, but given that’s the company is already at a 90, it wouldn’t be surprising if its needs to please shareholders ultimately drives it into alignment with the telcos it used to oppose.