Bartering with the devil: Netflix's partnership with Comcast has really paid off
Netflix's rankings are based on the peak performance of its streaming video service. It claims that 44 million people watch more than 1 billion hours of video each month, so its rankings are often considered more accurate for real-world usage than the numbers ISPs advertise. But now it seems that consumers will have to check to see if Netflix has partnerships with the ISPs it's supposed to be objectively measuring, if a deal can make an ISP jump six spots in one month.
The increase shows exactly how worthwhile the Comcast deal was to Netflix. Its videos must have been delivered substantially quicker than they were before the deal -- otherwise the race between ISPs is little more than a charade and Netflix compromised the Internet for nothing.
And make no mistake: this deal has compromised the Internet. It has shown companies like Comcast that they can charge large tech companies for priority service and get away with it. If those companies are anything like Netflix, they will then trumpet the increase in speed, which will make it harder for other companies to avoid making such deals. (Apple is already said to be in talks with Comcast over a deal to ensure speedy delivery of videos through its service.)
Those episodes of "Freaks and Geeks" aren't going to stream themselves, and if Netflix has to make a deal with the devil to get them to your television set, it will. Then, as an added bonus, it will publish new rankings cheerleading the speed bump without disclosing the deal to consumers who don't spend their time obsessing about the Internet's future. It's a win-win.
Except for the Internet, consumers, and small companies that can't afford to operate in the new paradigm. They're getting screwed. But hey! At least your Netflix videos will load quicker.
Pando weighs in
David Holmes wrote about the dangers the Comcast-Netflix deal poses to independent entrepreneurs and small companies when it was first announced earlier this year:
The Internet has historically been a place where anyone could post content or offer services to the same global audience, regardless of whether you’re a kid from Arkansas or a multi-national corporation. But it’s becoming more like cable TV where content providers have to bring loads to cash to the table before companies like Time Warner and Cablevision will bring that content to millions of eyeballs.
That could leave small-time players like [VoteRockIt founder Matt] Hudson stuck on the Internet equivalent of grainy, limited-audience public access TV. I wrote about the reported Comcast-Apple deal when it was announced:
Contrary to the narrative crafted by net neutrality activists, Comcast isn’t dabbling in back room deals that subtly undermine the idea of a free Internet where all data is treated equally. It’s created a system through which it is able to convince even net neutrality supporters like Netflix CEO Reed Hastings to pay for improved performance, to get Apple to pay for the ability to reach consumers at a decent speed, to become even larger in the ISP market, and to make donations to the lawmakers tasked with keeping it in check.
But let’s go ahead and focus on the news that Apple is developing a streaming media service through which it could tighten its grip on the digital media market and, because this is Apple we’re talking about, keep rumors of an aluminum-clad television set alive. Surely that’s more important than the systematic destruction of the ideals on which the technologies that would enable that service were founded. Gotta watch those “Breaking Bad” reruns, after all. I then wrote about the FCC’s unwillingness to defend the free Internet after Wheeler said that deals like that aren’t covered by existing net neutrality laws:
Splitting issues that could affect the foundation of the Internet and allowing companies like Comcast to hamstring the greatest technological innovation in human history — or at least the innovation just behind man-made fire and wine — because the FCC wants to focus on semantics is insane. The Internet isn’t just the series of tubes connecting Comcast’s infrastructure to our homes: it’s the whole damned thing, from the servers operated by companies like Netflix all the way down to the cables in our homes.
Comcast might not be violating net neutrality laws, but it’s certainly violating the spirit behind them. It’s about time the FCC did something about that. Then I wrote about the European Union’s attempts to defend the free Internet:
The legislation is meant to provide access to online services ‘without discrimination, restriction or interference, independent of the sender, receiver, type, content, device, service or application.’ For example, ISPs would be barred from slowing down or ‘throttling’ the speed at which one service’s videos are delivered while allowing other services to stream at normal rates. To bastardize Gertrude Stein: a byte is a byte is a byte.
Such restrictions would prevent deals like the one Comcast recently made with Netflix, which will allow the service’s videos to reach consumers faster than before. Comcast is also said to be in talks with Apple for a deal that would allow videos from its new streaming video service to reach consumers faster than videos from competitors. The Federal Communications Commission’s net neutrality laws don’t apply to those deals, according to FCC Chairman Tom Wheeler, so they are allowed to continue despite the threat they pose to the free Internet. And then I wrote about Comcast's argument supporting its Time Warner Cable merger:
Comcast’s arguments are about what you would expect: the merger will supposedly benefit consumers, it will allow Time Warner Cable to update its infrastructure, and it will offer more options to consumers as wireless broadband starts to spread. What Comcast doesn’t mention is that the merger would make it even more entrenched in the United States’ Internet infrastructure and allow it to continue making deals that threaten both consumers and entrepreneurs, all while making even more money off Internet connections that lag behind much of the developed world.
Its efforts will be assisted by its vast contributions to the regulatory bodies overseeing the deal, the monopolies and duopolies that it has helped create in most markets, and its willingness to threaten the very foundation of the free Internet by striking preferential deals with companies like Netflix. The company has spent the last few decades trying to figure out how it can fuck the Internet — this merger will determine just how rapacious it will be allowed to become.