Netflix should just pay its way

The company mischaracterizes what net neutrality is all about

Let's start by saying that Netflix is a great company that started out renting DVDs by snail mail and has evolved into a video-on-demand game-changer.

YouTube and Hulu were at the vanguard, but Netflix validated the so-called over-the-top (OTT) video market, proving consumers will pay for video programming delivered directly to TVs, smartphones or tablets without a cable or telco middleman. Netflix's video streaming service now threatens cable TV's traditional "triple play" bundle of phone, cable and Internet. Between 2010 and 2013, more than 5 million cable TV subscribers have "cut the cord," according to equity research firm ISI Group, many of them in favor of OTT providers like Netflix.

Netflix deserves nothing but praise for the new choices it has brought consumers, but it must be called out for what it's been trying to do in Washington in terms of broadband policy.

Netflix users still require a broadband connection, be it coax, fiber or wireless. That's why Netflix has injected itself into the middle of a long-simmering debate over whether broadband service providers have a right to ask OTT providers to pay for the more rigorous quality control their applications require.

This is what the Federal Communications Commission's network neutrality debate is all about. Net neutrality simply means that Internet service providers like AT&T, Verizon and Comcast should handle all data traffic, no matter what the application, in exactly the same way. Under no circumstances should a service provider, for an added cost, be permitted to offer a higher echelon of quality control that would, for example, guarantee delivery of a high-definition movie without blips, pixilation or an outright dropped connection. These quality guarantees are often mischaracterized as Internet "fast lanes," when a more accurate description would be "application optimization." Yes, Netflix's high-definition videos would get treatment that would be unaffordable to the proverbial mom-and-pop website. But on the flip side, mom and pop are not trying to download gigabytes of error-sensitive data simultaneously to millions of users. Nor do they account for 34% of total Internet bandwidth consumption any given evening.

FCC Chairman Tom Wheeler has endorsed the net neutrality principle. But even he has conceded that bandwidth-intensive applications require specialized handling in order to work. The controversy, then, comes down to how this cost will be apportioned.

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