Netflix, Egypt, and the Case for Net Neutrality

In the wake of the FCC decision to approve a basic framework of net neutrality rules, the battle rages. While Internet providers like Verizon file preemptive challenges to regulations that haven’t even taken effect yet, Netflix chimes in to defend net neutrality, and the political strife in Egypt provides a poignant illustration of how important it is for the Internet to be free and open.

Congress established the FCC in 1934 and designated it with the authority to regulate interstate and international communications by radio, television, wire, satellite and cable. Verizon–and subsequently MetroPCS–believes its wires, satellites, and cables are somehow exempt from government regulation, though, and has filed a legal challenge to the FCC’s authority to implement a net neutrality framework.

Meanwhile, Netflix finds itself at the center of the net neutrality debate with its streaming video content drawing attention as the type of traffic that ISPs might like to throttle or discriminate against. In an open letter to shareholders, Netflix CEO Reed Hastings said, “Delivering Internet video in scale creates costs for both Netflix and for ISPs. We think the cost sharing between Internet video suppliers and ISPs should be that we have to haul the bits to the various regional front-doors that the ISPs operate, and that they then carry the bits the last mile to the consumer who has requested them, with each side paying its own costs,” adding, “This open, regional, no-charges, interchange model is something for which we are advocating. Today, some ISPs charge us, or our CDN partners, to let in the bits their customers have requested from us, and we think this is inappropriate.”

Hastings is referring to the ongoing battle between Level3 Communications and Comcast. Comcast has demanded that Level3 pay a surcharge for the privilege of having the Netflix streaming content delivered over its network. However, the Comcast customers are paying for a certain bandwidth of service, and Comcast should not involve itself in whether that bandwidth is used to send e-mails, shop Amazon, post Facebook status updates, or watch Netflix movies. The Comcast customer is already paying Comcast to deliver the content, so Comcast’s additional surcharge amounts to double-dipping extortion.

The political unrest in Egypt this week, and the actions by the Egyptian government to shut down Internet access and wireless communications, illustrate the importance of net neutrality and an open Internet. The country-wide blackout–aimed at disrupting the ability of protesters to communicate and organize–is an extreme example, but what if your Internet provider chose to block Facebook or Twitter? What if your provider throttles traffic from some streaming video providers, while providing optimized delivery of other content from providers willing to cave to the surcharge demands?

The battle for net neutrality is far from over. In fact, it has just begun. The actual decision by the FCC to finally approve some sort of net neutrality framework is like drawing first blood.

While the legal wrangling over net neutrality continues, Netflix is doing its part to let the free market speak for itself. By providing data on which Internet providers consistently offer the fastest, and highest quality delivery of streaming video content, Netflix is arming its customers with the information necessary to choose the best ISP and let their purchasing power speak on behalf of net neutrality–at least those customers fortunate enough to have a choice between ISPs.