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Could 40 Million Angry Netflix Users Help Save Net Neutrality?

Popular streaming video service threatens to mobilize its customers against telecom assault on open internet

Jon Queally, staff writer

The online video streaming company Netflix—which this week surpassed business world expectations by announcing a surge in viewership with paying membership close to 40 million U.S. customers—may seem like an unlikely ally to grassroots activists and progressive organizations fighting against the nation's largest telecommunications companies in the name of an open and fair internet.

But if the company is willing to flex its political muscle or actually mobilizes its customer base as an army of citizen lobbyists, could such a development help turn the tide against a recent court decision that has imperiled the concept of net neutrality?

In a letter to investors released this week, the company said that if net neutrality falls prey to the nation's largest internet service providers (ISPs)—including AT&T, Comcast, TimeWarner, and Verizon—its user could face increased fees and impaired access to the streaming service. If such a "draconian scenario" developed, company executives said, they would fight back.

"We would vigorously protest and encourage our members to demand the open Internet they are paying their ISP to deliver," said Netflix CEO Reed Hastings and CFO David Wells in the letter, which continued:

In the long-term, we think Netflix and consumers are best served by strong network neutrality across all networks, including wireless. To the degree that ISPs adhere to a meaningful voluntary code of conduct, less regulation is warranted. To the degree that some aggressive ISPs start impeding specific data flows, more regulation would clearly be needed.

Some media reform advocates welcomed the development.

“We’re glad to see Netflix acknowledging the need for — and the consumer benefits from — open Internet rules that apply to wired and wireless networks alike,” said Free Press policy director Matt Wood in an email to Common Dreams.

According to Seth Porges, a technology write for Forbes, the potential impact of a Netflix user revolt could drastically alter the political playing field because "Netflix is the one company that could get the general public to take notice that net neutrality actually matters."

"Quite simply," explained Porges, "If and when 40 million Americans wake up to a significantly higher monthly bill, something’s gonna give."

From Netflix's perspective, however, the ISPs—"generally aware of the broad public support for net neutrality" and afraid of government pushback—are not likely to overplay their hand.

That's likely small comfort to those hoping that the FCC will reclaim their authority over online regulations by declaring the internet as a public utility that should be governed by an eye toward the "common good" and not the whims of for-profit corporations who display near monopoly control over the country's digital networks. According to those groups, the FCC should reclassify broadband as a telecommunications service which would then allow it to implement net neutrality guidelines within a strong regulatory and legal framework.

As Timothy Karr, legal advocate for Free Press, recently described:

Reclassifying broadband would return the FCC’s established tradition of oversight, treating customer-facing communications networks as common carriers.

Under this standard, defined under Title II of the Communications Act, a network provider cannot block, slow or discriminate among websites and services. For instance, Verizon wouldn’t be allowed to block your use of FaceTime, Google Hangout or Skype to favor of its own video-calling service.

Netflix role in this debate, of course, cannot be separated from its own self interest. As Porges notes:

Of course, the one company that has the most to lose from [the recent court decision against net neutrality]  is Netflix, which has the distinction of being an entity that simultaneously gobbles up the largest share of Internet traffic, relies the most on speedy service (you think those HD videos are gonna look as crisp under the threat of throttle?), and is the most threatening to the business core business model that cable ISPs are built on (hello cord-cutters!).

So, despite the fact that Netflix is downplaying any affects of the ruling on their business, it most definitely had an immediate and noticeable impact on the company’s stock price.

The questions remain, however, for those who have long waged the net neutrality fight on principled grounds related to open access, equitable treatment of content, and the ideals of a democratic internet: Will promises by companies like Netflix to fight on their side survive the rough and tumble negotiations and regulatory fights ahead? Or are they likely to crumble as the pursuit of profit and investor returns trump the noble promise of an internet maintained for the benefit of all?


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