Despite Deal, Netflix CEO Blasts Comcast - Webmaster News

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RANCHOS PALOS VERDES, Calif. — One day after Comcast CEO Brian Roberts said Netflix wants to push a huge amount of Internet traffic through the cable company’s pipes, but doesn’t want to pay for it, Netflix CEO Reed Hastings hit back — saying Comcast wants to be a monopoly that’s charging for access to its subscribers and “pulling profits out of the system.”

The online video content company that accounts for roughly one-third of all Internet traffic, and one of the largest cable and Internet companies in the country are locked in a bizarre partnership battle. Netflix recently agreed to start paying Comcast for direct and better access to Comcast subscribers at, according to Roberts, a better rate than they got from other transit providers, and Netflix promptly turned around and criticized the deal it had just made.

“We have no power,” said Hastings. “We had to take the deal.” The Netflix CEO voiced his displeasure during an interview at Recode’s Code Conference. Hastings explained that performance on Comcast was declining sharply — and that he “reluctantly signed” the deal with Comcast to ensure that subscribers get better access to Netflix.

Since then, Netflix has signed a similar peering agreement with Verizon. When asked why they did it if the deal with Comcast was so distasteful, Hastings said, “We do these deals and they [Verizon] say, Hey, if you’re going to pay them, then I want money, too.”

Roberts, in a separate interview with Recode editors, defended the deal. “With [Netflix"s] massive volume, we want their customers to have the best experience possible.” As for Hasting’s complaints, “I think it’s just business, he’s trying to get the price for free,” said Roberts.

Since both Netflix and Comcast agree that the video streaming service accounts for roughly 30% of Internet traffic, the questions really boils down to who pays for that traffic and if anyone should.

“[Comcast] says, ‘pay 30% of the costs’ and we say ‘we should get 30% of your revenue’,” said Hastings. He added that Comcast replied, naturally, “No way.”

Left to right: Kara Swisher, Walt Mossberg and Comcast Chairman and CEO Brian Roberts

Hastings warned of a slippery slope ahead — and said that this struggle is not so much about Netflix as it is the whole Internet.

Even though the Federal Communication Commission does not currently consider such transit deals a Net Neutrality issue, Hastings insists it is, but favors self-regulation, similar to how the movie industry created its own rating system, over government intervention.

Comcast’s Roberts agrees, after a fashion. He told Recode’s Walt Mossberg that he doesn’t want to see the industry go back to “100 year old regulation,” referring to the FCC’s suggestion that it recategorize Internet Services as communication services — which would give the FCC more power to apply Net Neutrality regulation.

“I don’t think phone regulation ever yielded great phone systems,” said Roberts.

With or without regulation, Hastings worries about Comcast’s efforts to gobble up Time Warner. “The bigger Comcast gets, the more they charge everyone else,” said Hastings.

Roberts though insisted that Comcast and Time Warner do not overlap and there would be “no competition reduction.”

Source: http://mashable.com/2014/05/29/reed-hastings-netflix-comcast-blast/?utm_medium=feed&utm_source=rss