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Netflix Playing (Un)Favourites with AT&T, Verizon Users

Some Netflix users had difficulty streaming content last weekend on their Verizon or AT&T device. Seeing an opportunity to separate itself, T-Mobile suggested the two telecom giants were throttling streaming services on their networks, a clear violation of the US Federal Communication Commission’s net neutrality regulations. Turns out, AT&T and Verizon had nothing to do with the delayed, inconsistent video streaming at all.

It was Netflix.

In a blog post March 24, Netflix explains that it has been working on a new “data saver feature” for mobile users as a way to give subscribers “more control over their Netflix experience.” The data saver feature will give subscribers the option to “either stream more video under a smaller data plan, or increase their video quality if they have a higher data plan. We’re on track to make it available to members sometime in May.”

This is an interesting move for Netflix, which had its service throttled by Comcast several years ago and exposed the communications company for trying to charge the company a fee to allow its subscribers to stream content at faster speeds. But the streaming pioneer, it seems, is trying to prove a point.

“We believe restrictive data caps are bad for consumers and the Internet in general, creating a dilemma for those who increasingly rely on their mobile devices for entertainment, work and more,” the company says. “So in an effort to protect our members from overage charges when they exceed mobile data caps, our default bitrate for viewing over mobile networks has been capped globally at 600 kilobits per second. It’s about striking a balance that ensures a good streaming experience while voiding unplanned fines from mobile providers.”

That’s either a nice little dig at AT&T and Verizon or it’s a battle cry. Remember that Verizon earlier this year started rolling out its own video streaming service, Go90, which will allow users to stream content from within its own network without using up all their data. Comcast also started putting extra fees on the bills of customers who use what the company considers “excessive amounts of data,” a move that’s been questioned by the FCC.

It should be noted, however, that T-Mobile includes Netflix (and Hulu, among others) as part of its “Binge On” package, meaning T-Mobile subscribers can watch all the House of Cards they want without hitting their monthly data caps. Same goes for Sprint subscribers.

Some will undoubtedly ask whether Netflix is kind of being two-faced with this move, seemingly targeting some providers over others.

Not true, says April Glaser at Wired.

The FCC’s net neutrality regulations restrict ISPs from charging websites fees for transmitting content at the same fast speeds as other sites, something Netflix has been a vocal advocate for, but the rules “do not restrict how websites connect to users based on the type of Internet connection they have,” she notes.

Her stance is affirmed by Harold Feld of Public Knowledge, a consumer advocacy group. He tells Glaser that there’s no contradiction in the company’s position at all. “Asking how Netflix can do this when it supports net neutrality is like asking why hockey teams don’t use a designated hitter like in baseball.”

Put another way, “If Netflix wants to send a lower quality feed to AT&T mobile subscribers, nothing about the principles of network neutrality bars it from doing so,” she writes. “In fact, as Feld points out, websites have been using versions optimized for mobile and desktop users for years.”

This whole scenario sounds much more sinister over at Forbes. Writer Fred Campbell says Netflix only came clean about this practice, which has been in place for five years, because a T-Mobile executive “already spilled the beans.”

“This shocking new revelation raises some important questions: Why hasn’t the FCC fully investigated past allegations of Internet traffic manipulation by Netflix,” he asks. “What else has Netflix been hiding from regulators in the US and around the world? And, should the US alter its current regulatory stance toward so-called ‘edge’ and over-the-top Internet companies given that Netflix was able to conceal its discriminatory practices from its customers and even from federal regulators for more than five years? Netflix’s customers who didn’t get what they were paying Netflix to deliver, the ISPs whose reputations were damaged unfairly and the public deserve straight answers to these questions.”

Turns out a Canadian regulator previously asked Netflix if it was using subscribers as pawns in some kind of messed up streaming chess match and, at the time, Netflix’s director of global public policy said allegations of deliberately slowing service to targeted carriers were “categorically untrue.”

“If the experience of Canadian regulators is any guide, don’t expect Netflix to be cooperative,” Campbell warns. “During the same hearing when Netflix ‘categorically’ denied that it was throttling Internet traffic, the Canadian Radio-television and Telecommunications Commission (CRTC) ordered Netflix to produce data in confidence about its revenue and viewership. But Netflix refused to provide the data, claiming that the CRTC lacks jurisdiction over Netflix (the same argument it and other over-the-top providers make to avoid regulation in the US) and that the confidentiality protections provided by the CRTC’s regulatory process are unsatisfactory. The CRTC responded by striking Netflix’s evidence from the record, because a responsible government regulator ‘cannot carry out its duties based on mere anecdotal information.’”

Is Netflix a hypocritical bully here, or living within the law of regulatory loopholes designed to protect customers above all else? It’s hard to say, but it’s clear the company has picked sides (T-Mobile and Sprint over AT&T and Verizon) that will leave some customers compromised.

Amber Healy

I write about music policy and lawsuits because they're endlessly fascinating.

Amber Healy has 517 posts and counting. See all posts by Amber Healy

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