Netflix Exec Now Says It Didn’t Actually Want FCC to Regulate Broadband So Heavily
Netflix CFO David Wells, in comments at an industry conference, appeared to backtrack on the company’s previous position that broadband Internet service should be regulated by the U.S. government as a telecommunications utility — but Netflix later said that its position remained unchanged on the issue.
Last year, Netflix urged the FCC to reclassify broadband as a telecom service, under Title II of the Communications Act. In a July 2014 filing, Netflix said that “Title II provides [the FCC with] a solid basis to adopt prohibitions on blocking and unreasonable discrimination by ISPs. Opposition to Title II is largely political, not legal.”
The FCC on Feb. 26 approved new network neutrality rules, by a 3-2 vote, that will treat broadband services like traditional phone services under Title II, although those will restrict the commission from imposing rate regulation, tariffs or limits on bundling. Big ISPs like Comcast and Verizon had argued strenuously against such a reclassification.
But Wells, at least, expressed second thoughts on the Title II issue. On Wednesday, Wells — speaking at the 2015 Morgan Stanley Technology, Media & Telecom Conference — said the company wasn’t happy with the FCC move. He said that, while the streaming-video company wanted to see “strong” net neutrality measures to ensure content providers would be protected against ISPs charging arbitrary interconnection fees, Netflix would have preferred a lighter regulatory touch.
“Were we pleased it pushed to Title II? Probably not,” Wells said at the conference. “We were hoping there would be a non-regulated solution.”
Asked for clarification, a Netflix rep said there has been no change in the company’s stance: “Netflix supports the FCC’s action last week to adopt Title II in ensuring consumers get the Internet they paid for without interference by ISPs. There has been zero change in our very well-documented position in support of strong net neutrality rules.”
Netflix’s previous advocacy of regulating broadband under Title II regs carried a caveat: It had said the FCC could use Title II as a way to adopt net-neutrality protections that were previously struck down in federal court, but that the agency could stop short of using “overreaching regulation” and that it “could go further only in the face of truly troubling actions on the part of Internet access.”
Last September, Netflix participated in a symbolic Internet “slowdown” to urge the FCC to adopt more robust net neutrality rules that would forbid ISPs to charge for so-called fast lanes. At the same time, Netflix last year cut deals with several big ISPs — including Comcast, AT&T, Verizon and Time Warner Cable — under which it is (begrudgingly) paying for dedicated interconnections. Those deals are to ensure Netflix has enough bandwidth to deliver high-quality streaming video to its subscribers.
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