Netflix May Not Be Worried About The Looming Death Of Net Neutrality, But Startups Should Be God-Damned Terrified
from the what-broadband-competition-problem? dept
With Trump’s telecom advisors and the remaining FCC Commissioners making it abundantly clear that they intend to gut net neutrality rules and dismantle pretty much all of the FCC’s consumer watchdog functions, there are more than a few worried companies, startups and consumers concerned that the net neutrality fight is about to get downright stupid. One of Trump’s telecom advisors doesn’t even think telecom monopolies are real, which should speak volumes about our looming vacation to dysfunction junction.
One company that’s busy pretending it’s not worried is Netflix, which penned a letter to the company’s shareholders this week (pdf) insisting that it doesn’t expect the death of net neutrality rules to materially impact the company’s revenues:
Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable.
Of course, that’s easy to say when you’re now the biggest pay TV provider in the United States, coming off one of your most successful quarters in history, while quickly expanding into hundreds of countries internationally. But what about the smaller, disruptive Netflix-like companies of tomorrow? They’re about to face a future in which the government doesn’t appear to give two flying shits about the wide variety of problems caused by AT&T, Comcast, Charter and Verizon’s stranglehold over the broadband last mile. In fact, likely FCC boss Ajit Pai has made it repeatedly clear he does’t even think any broadband competition issues exist.
Clearly, smaller companies and startups won’t have the size or lobbying muscle to defend themselves from ISP efforts to use this very real competitive logjam as a weapon against competing services (see: usage caps, overage fees, interconnection shenanigans, and whatever other “creative” efforts ISPs haven’t even birthed yet to allow them to double dip). And Netflix appears to have forgotten that the mere presence of the FCC’s rules prevented ISPs from attempting to extract significant, new interconnection fees at the network edge. So really, even companies the size of Netflix will have plenty to worry about.
Fortunately Netflix does indicate the company isn’t entirely oblivious to the advantage it holds, and proceeds to acknowledge that yes, a healthy and functioning internet free of obnoxious gatekeepers is kind of important:
However, strong net neutrality is important to support innovation and smaller firms. No one wants ISPs to decide what new and potentially disruptive services can operate over their networks, or to favor one service over another. We hope the new US administration and Congress will recognize that keeping the network neutral drives job growth and innovation.
If you’ve spent even five seconds reading comments made by Marsha Blackburn and other Trump telecom advisors, you should realize there’s a snowball’s chance in hell of that happening. The most likely path forward begins with the incoming FCC simply refusing to enforce the net neutrality rules on the books. After that, you can be fairly certain (said as somebody that has watched this industry for two decades) that the GOP will be pushing a new Communications Act rewrite (or some other new stand-alone legislation) packed with breathless platitudes toward broadband expansion, jobs, and net neutrality.
In reality this legislation will have one, singular, unwavering focus: eliminating any and all government oversight of some of the least liked, and least competitive companies in any industry in America. Any network neutrality provisions in this looming legislation will be comically hollow, much like the promises surrounding job creation, innovation, and broadband competition. If Netflix execs truly think they’re going to be immune from the repercussions of this shift back to letting AT&T, Comcast and Verizon dictate internet policy, they’ve got a lot of painful learning to do over the next few years.
Filed Under: discrimination, donald trump, fcc, net neutrality, open internet, power, startups, throttling
Companies: netflix
Comments on “Netflix May Not Be Worried About The Looming Death Of Net Neutrality, But Startups Should Be God-Damned Terrified”
The Cable Bundling of the Internet is looming
Just can’t wait until the ISPs start giving users the ‘option’ of buying packages for social networking, gaming, and movies… all with an internet cap a month. Plus don’t forget the per-device fees. Want to use your own router? We can’t have that… bc… viruses! Think of the children! They are doing it for your own benefit…
2017… the beginning of the end of US Internet Innovation…
Re: The Cable Bundling of the Internet is looming
And don’t forget that those packages only include those services on the white list for that group. So, the “gaming package” only includes PSN, XBox Live, and Blizzard games. All other online games get throttled to oblivion unless you pay an extra $200 a month for the “ultimate level” that comes with an additional 100 cable TV channels.
Re: Re: The Cable Bundling of the Internet is looming
All 100 being 24/7/365 infomercials.
Re: Re: Re: The Cable Bundling of the Internet is looming
instead of saying it will happen why dont we stop it like we done before and you can help protect Net Neutrality by supporting groups like ACLU and the Electronic Frontier Foundation and Free Press who are fighting to keep Net Neutrality.
https://www.aclu.org/
https://www.eff.org/
https://www.freepress.net/
also you can set them as your charity on https://smile.amazon.com/
Cable Bundling of the Internet must never happen and we must not let them bring in a per-device fee.
Re: Re: Re: The Cable Bundling of the Internet is looming
And the infomercials are all for the “ultimate level gaming package” that costs 10 easy payments of $19.99 (per month), but act now and get 100 additional cable TV channels for free!
Re: Re: The Cable Bundling of the Internet is looming
that why we must stop them bringing in packages of any kind many dont want them, we must keep net neutrality and many are fighting to keep it
Re: The Cable Bundling of the Internet is looming
that why we must fight to keep net neutrality and fight this, we must not let ISPs start giving users the ‘option’ of buying packages for anything, 2017 is not the beginning of the end of US Internet Innovation as long as we fight
Everybody is overreacting - I make a prediction
Net neutrality is a good thing as long as we have government-protected telcom cartels.
But the Internet, and the Market, are tougher than they get credit for.
Since it seems the Trump administration is going to gut net neutrality, here’s my prediction of what will happen:
1 – If telecom carriers don’t give customers what they want (open access to data anywhere), that will create a huge business advantage to new carriers that do. Look for more entrants into the market as the traditional cartels limit choice.
2 – Internet Protocol is pretty flexible. If carriers limit choice, look for vastly popular traffic tunneling apps that route forbidden/surcharged traffic disguised as permitted traffic.
We’ll get thru this just fine.
Re: Everybody is overreacting - I make a prediction
Ahem…. you are likely mistaken.
I fully support the absolute abolition of the FCC, but I have no illusion that the regulations that protect the incumbents will go the way of the dodo along with the limp wristed consumer protections the FCC has the rest of the clowns here at TD fooled with.
Quick… what is the difference between a Dem and Rep in regards to the FCC? The Rep is more honest about screwing the citizens over. I see no real or fundamental difference occurring with Ajit Pai, the fuckstick. He was there before Trump.
This “OMG the sky is falling” article is typical leftist religious diatribe that occurs any time they lose ground on a subject matter.
It sucks now, I doubt it will suck more later though I will not be surprised if it does suck more later, it will just “primarily” suck in different ways.
So the moral of the story is… suck left my friend… but never dare to suck right!
Re: Re: Everybody is overreacting - I make a prediction
Typical conservative claptrap. Got nothing to add so blame someone else.
Re: Re: Re: Everybody is overreacting - I make a prediction
yes… you totally added to the conversation. You added so much you only got two measly sentences out that accomplished about 1 line of space.
We are proud of you sir OR ma’am OR it OR sirma’am OR ma’amsir OR whatever you need to be called by! Such a fine example of a liberal education!
Next time try, at least hard enough, to not make yourself into a complete and obvious hypocrite by your own response.
Re: Re: Re:2 Everybody is overreacting - I make a prediction
I learned it from watching you.
Re: Re: Re:3 Everybody is overreacting - I make a prediction
I’m conservative and disagree with both of them; we need more competition AND net neutrality, which market forces alone can’t enforce.
Boycott or bend over ain’t an option if your business depends on internet connectivity and the incumbents won’t take that much of a hit if a few hundred people decide to go without in the hope that the broken, lopsided market will reset. It won’t.
Resolving this mess will take anti-trust action to break the incumbents’ stranglehold. Expect a lot of “Waaaah! Big government!” before it’s over.
Re: Re: Everybody is overreacting - I make a prediction
” have no illusion that the regulations that protect the incumbents will go the way of the dodo”
So the protection against competition and litigation provided by the government will remain in place while the protection against monopoly abuse provided by the government will go away, and you are fine with this because?
If you think corporations have your best interests in mind you are sorely mistaken. They will do what they can get away with. No regulations, no morals, no ethics, no business.
Seriously, what would a no regulations society look like? Would you even recognize it as a society or would it look like a bunch of rag tag gangs of undernourished anarchists? Would it turn into fiefdoms complete with castles and moats? Who is going to conjure up dragons? No thanks – think I want out.
Re: Re: Re: Everybody is overreacting - I make a prediction
Corporations are just groups of people who band together to accomplish a goal.
They have as much or as little morals and ethics as the people who run them do.
Re: Re: Re:2 Everybody is overreacting - I make a prediction
That is true. However, there’s a capitalist culture that decries altruism and acting in the public interest that is particularly noticeable in the ISP incumbents that the anarchists can’t or won’t accept as being a bad thing.
Like AC 19 Jan 2017 @ 6:05pm, I don’t want to live in a post-anarchist world. We’re seeing the birth of it now with the demolition of public institutions in favor of privately controlled enterprises and the result is clearly not more efficiency in the areas where competition is lacking or the service is essential.
Re: Re: Re:2 Everybody is overreacting - I make a prediction
I would even go so far as to argue that since morals are subjective, they don’t apply to the corporate world in the same way. The law is all you have, in some cases, to determine a proper moral position when running a multi national company.
Example; You have two employees of a multi national company. One of them lives in a country were having multiple wives is both legal, and morally sound. The other is from a country where having more than one wife is morally bankrupt. Although they are diametrically opposed, I would consider them both moral as they are adhering to the laws of their individual countries.
The Corporation itself will probably not get involved in either side as long as neither one is breaking the law in their respective countries. Should either side now consider the Corporation immoral for not taking a stance?
How about this example;
Bribing politicians is how you get something done in country A. You can’t do anything without doing so, and it’s expected as normal operating procedure. The corporation is based out of country B. In country B bribing is considered immoral. Should the Corporation be considered immoral because they are bribing politicians in country A? Should they not do business at all in country A? What if it’s humanitarian? Where does the line get drawn? Who gets to decide?
Re: Everybody is overreacting - I make a prediction
And how are we supposed to have new carriers when it’s nigh-impossible for them to roll out the necessary infrastructure? Between laws limiting towns and counties from creating municipal alternatives to actively doing everything they can to not allow new carriers to have access to poles… There will be no new carriers.
Look at Google Fiber. It started off good, then the cartels through tantrums and did everything they could to halt roll out in new areas and make it as expensive as possible for Google. AND THEIR TACTICS WORKED.
Re: Everybody is overreacting - I make a prediction
We will not have new carriers.
The capital expenditure required to launch a new communication network is a massive, massive barrier to new entrants.
We’ve seen dozens and dozens try around the world. Success is an incredible rarity, and usually only happens where a big carrier from a neighboring country makes the investment, say Hutchison Whampoa (Hong Kong) into the UK (Three). In the USA, Tracfone is an MVNO owned by Mexico’s America Movil. But even those only add competition in big cities where customers are plenty, and the CapEx/subscriber can be constrained.
Other new entrants, when moderately touching success, will get bought up by the incumbent to reduce the competition. For example, Wind Mobile in Canada bought by Shaw communications, or Mobilicity bought by Rogers. Do you think a Pai FCC or a Trump administration will block more or fewer merger requests?
Still other new entrants, like Virgin, are not actually new communications networks. They are MVNOs, or resellers of another carrier’s network. They are subject to the whims of the underlying carrier, and the wholesale price they pay. They do not actually increase the supply of capacity, so don’t have a strong effect on Supply/Demand equilibrium pricing.
Wireless saviors, like Monet Mobile, Earthlink, Muni Wifi and dozens more have all suffered a similar fate. They underestimated the costs of deploying blanket wireless coverage. The CapEx killed them.
Wired saviors, like Google Fiber are also hitting a CapEx wall. It’s OK to run as a loss for Google in order to push the competition, and foster the concept of Gigabit Internet, but as a nationwide offering it’s too costly to build. And incumbents keep throwing up roadblocks, like telephone pole mounting legal technicalities.
If you want to get wacky, you could look at low earth orbit satellite competition. But it turns out the time it takes to launch a full constellation means that the technology will always be 5 years behind, and the capex of a space-based solution is…astronomical. You can find these saviors are quite dead: Iridium, or Globalstar.
And Muni efforts are also squashed by lobbyists, as Karl mentioned.
So, after reading my screed with ACTUAL examples of companies that tried and failed, how does that leave your optimism about new entrants?
Re: Re: Everybody is overreacting - I make a prediction
My optimism remains intact.
Your summary of the past is pretty accurate.
But networks are driven by technology, and there are technologies on the horizon that will change the situation.
Google has given up on GFiber because they see cheaper and better ways to get bandwidth deployed – their own Project Loon, yes, but moreso SpaceX’s Seattle-based satellite project. (Google is a big SpaceX investor.)
And there are lots of other technologies, including mesh networks, next-gen WiFi and WiMax, etc.
Where there’s a need, people will find ways to profit from filling the need. The telecom cartel is digging its own grave (as do all cartels, eventually). And the Trump administration is going to help dig.
More, even if there is no new infrastructure, what I said about Internet Protocol remains true. Even China’s Great Firewall isn’t more than a bump in the road – most of its effectiveness comes from the threat of jail time for bypassing it, not from its technical abilities.
Re: Re: Re: Everybody is overreacting - I make a prediction
Radio spectrum is limited, and both mobile phones and WiFi only work as well as they do because low power transmitters only have a short range, allowing the frequencies to be reused on a fairly lose physical spacing when population densities are high. Satellites have the same limited bandwidth issue, and the problem that they cannot be closely packed in orbit to allow frequency re-use, especially as that for even a moderate orbital packing would require ground based antennas to track the satellite they are using, along with use of multiple antennas to provide a continuous connection; each antenna loses connectivity when switching between satellites. 9I am assuming low orbit satellites, as the latency for geostationary orbit is too high for highly interactive use, like gaming.
Also note, that while a WiFi mesh network can be used to connect a village to a connection to the Internet, it is not really practical in cities, except for small meshes connection to a local connection point. Also, the connections between towns and cities need to be provided, and that these days really does mean fiber. It is also worth noting, that the major intercontinental connection are all marine cables, which are overall more expensive to provide and maintain that satellite links, but are needed to get the total bandwidth required.
Nothing beats hardwired connection when bandwidth has to be supplied to multiple endpoints. Need more capacity, run another wire or fiber, without having to worry about intelligencer from the one a fraction of an inch away. Need more radio capacity, break an exiting cell into smaller cells, and carefully plan channel use to avoid interference. This also requires the panning and installation of the hardwired connections to each cell.
While radio and satellite have their uses, it is mainly in providing a service to remote areas with low population densities.
Re: Re: Re:2 Everybody is overreacting - I make a prediction
I can’t disagree with anything you’ve said.
But you’re too pessimistic about the innovative abilities of new players. The world keeps changing.
Re spectrum, mesh networks (not necessarily WiFi; new schemes will be needed) work really well in high density areas precisely because they re-use the same spectrum over and over.
Re satellite, read up on what SpaceX is doing – it’s quite audacious (and low latency).
And, a word to the wise (esp. telecom carriers) – do not get between Elon Musk and something he wants.
I’ve made my predictions – wait and see.
Re: Re: Re:3 Everybody is overreacting - I make a prediction
“But you’re too pessimistic about the innovative abilities of new players. The world keeps changing.”
New players have to have unfettered access to one of two things: right of way, or rent controlled OSI layer 3 transport.
State regulations are constraining the availability of right of way. Net Neutrality could be reasonably described as rent controlled layer 3 transport.
Without one of these two things (and the first being extremely expensive to exploit) there will be no successful new players in U.S. telecom. Further, the lack of the latter will drastically constrain growth the software markets, since it will facilitate malicious proprieterization in the telecom sector. Without NN, Comcast and AT&T will EEE the Internet.
In simpler terms, failure to support NN will result in a domestic trade war that will make the United States less competitive against foreign powers.
A common (but ignorant) view is that speech delivery is a product, and that carriers have the right to offer that delivery in various ways. The problem with this view is that binary data IS SPEECH. Which is to say munging customers bits IN ANY WAY is a violation of their right to speak and contract with other parties, period.
The reason they call it “broad band”, is so they don’t have to call it “Internet”. The term is intentionally obtuse to avoid acknowledging that bits (1’s and 0’s) transmitted between two contracting parties is Constitutionally protected speech.
The distinction between “product” and “speech” is lost on most users. This lack of definition is what the abusive players are exploiting to diddle their customers traffic without their customers informed consent.
Speech begins at the first bit of the first IP payload, of the first datagram in the transmission. And it ends at the last IP payload bit of the last datagram in the transmission. Everything therein encapsulated, is effected by the composers behavior, and may constitute an intended element of communication.
Net neutrality is a means of protecting a Constitutionally protected right that is encapsulated in the First amendment. But it is also one that has not been articulated yet in a way that Congress can be reasonably expected to understand.
This issue is very much like the 14th and 18th amendments. If you understand the rest of the Constitution and regard its voice and tone in broad terms, they are not really necessary. It is just that some assholes need things spelled out to them.
Really NN probably needs a Constitutional amendment. There are just too many people who will never understand that speech doesn’t begin when the receiving party hears you, it begins when you speak. The difference between the two, is why carriers are utilities, and not providers of products.
Re: Re: Re:3 Everybody is overreacting - I make a prediction
Old Mugwump – You’re too optimistic.
Your general arguments that technology will enable some kind of disruptive revolution, and new solutions will increase supply and reduce scarcity and price are…ABSOLUTELY CORRECT. So, on that, we’re optimistic together.
The key here, though, is timing. Each of the solutions you mention, mesh, better wifi, LEOs, WiMAX…well, I’ve heard it all before. (Odd that you mention somewhat older and failed tech). And, yeah, comms access does progress, but more slowly than you seem to expect. And I’m a keen futurist that thinks tech is accelerating faster than any other time in history, and faster than most companies expect. Even then, I don’t expect much revolutionary comm tech within the next Presidential term.
And I’m a guy who is talking (and promoting) exactly to the startup firms that are proposing they will disrupt the incumbents. Artemis, RedStone Technologies, etc.
I’m looking forward to WiGig, White Spaces, Millimeter Wave solutions, unlicensed spectrum, wave division multiplexing, MIMO, higher QAMs, and more. These WILL matter. Not before 2020.
As for Elon Musk, he is my personal hero. But Craig McCaw was a wunderkind, too, when he launched Teledesic. http://archive.fortune.com/magazines/fortune/fortune_archive/2002/07/08/325859/index.htm Wireless is hard. sTelecom is hard. Space is hard.
As for Dear Leader, his Ajit Pai FCC and his FTC will reduce the pace of progress, as incumbents will be allowed greater leeway to squash innovation, and reduce competition.
Re: Everybody is overreacting - I make a prediction
Which would be relevant if there were a market in US broadband, instead of a system of local monopolies.
I’m not sure what this article is trying to say, because smaller providers are already being screwed over by zero rating, which isn’t going to be fixed by the time Wheeler leaves.
Re: Re:
yea, article should have been titled…
“Same Shit, different damn day!”
{carry on!}
Re: If you think it's bad now...
With the current rules there was at least a possibility that a company blatantly screwing over their customers would get the FCC’s attention and get a slap on the wrist, so they at least had to pretend to care about the customers and the rules in place.
With the rules gutted and the FCC not only defanged but filled to the brim with people that insist that the industry is super competitive and composed of companies that think of nothing more than how best to serve their customers they won’t even need to pretend, and can focus entirely on ‘How can we get the most money with the absolute least amount of work on our part?’
Maybe
Maybe, just maybe it is just for show, and those in the FCC and government will actually do their jobs and defend the consumer. After all, I remember having fears when Wheeler took office, and that man did a better than most job.
Re: Maybe
The worry about Wheeler was due to him being from the industry he was now tasked with providing oversight for, raising issues of possible conflict of interest. That’s notably different than the incoming people to the agency all but admitting flat out that they have no intention of being anything less than stanch supporters of the industry, and completely ignoring reality with such insane ideas as stating that there’s no monopoly problem in the industry.
What shud worry America the most is that it has been daft enough to vote into what is supposedly the most important position in the world, not just the country (save Chris Dodd etc from the entertainment industries!) a man who is going to screw the people out of as much as possible, as many rights as possible, as many freedoms as possible and as many privacies as possible, all while throwing as much money as possible to the already rich! Any government that bases itself on nothing but profit is a bad government and don’t be fooled, it doesn’t give a shit about the ordinary person, ever!
Re: Re:
that’s funny, i feel the same away about the Bamy Admin.
Bamy and Drumpf are only different from each other in the respect that one is too hot and the other too cold. Opposite things but both harmful in their own special way!
Re: Re: Re:
Clearly you are a serious person with serious views that deserve to be taken seriously.
I for one am finally hopeful
Sometimes it has to get worse before it can get better. I am the guy who believes that change in this area will never happen until the ISPs/carriers extend their greed to the point where it actually messes up most Americans’ ability to afford it at all and messes up their TV. Then, without TV and internet, perhaps they can be bothered to get up off the couch and actually do something about it. For none of this is possible without the people voting all this in and being complicit in the whole thing, whether they care to recognize it or not.
Well, startups better start up in places with good net neutrality laws. Then ignore the USA market.
Re: Re:
This is EXACTLY what will happen. The US will become the internet black hole of the world.
Hey if you want to help protect Net Neutrality you should support groups like ACLU and the Electronic Frontier Foundation and Free Press who are fighting to keep Net Neutrality.
https://www.aclu.org/
https://www.eff.org/
https://www.freepress.net/
also you can set them as your charity on https://smile.amazon.com/
we must not let them turn the internet into Cable and turn sites into packages like aerinai is saying.
I agree with Netflix. They don’t have to worry too much. They got the reputation already, they got the infra-structure, they have settled. Other services would be penalized when they are most vulnerable. So while this may push Netflix into increasing the prices slightly it also means they won’t need to face new competitors.
Re: Re:
Gutting net neutrality won’t likely kill them off entirely, no, as they’re entrenched and big enough to handle it, but with no agency looking over the shoulders to keep the excesses of the telecom companies in check Netflix may once more find itself facing ‘unfortunate network issues’ that will require them to pay a ‘fair price’ for ‘their’ use of the connection.
Killing net neutrality won’t kill them as well, but if they don’t think it won’t impact them then they haven’t been paying attention to their own history and how other companies have tried to squeeze them for money in the past.
Netflix cracking down on VPN use. They don’t care about Net Neutrality.