Last week, Comcast and Netflix announced an agreement granting Netflix increased access to Comcast’s subscribers, hopefully speeding up the website’s service. Content providers like Netflix have traditionally not paid Internet service providers for access to their users. Instead, all data on the Internet, regardless of its source, was treated equally by all service providers, the underlying principle of net neutrality. However, a federal appeals court ruled in January that the Federal Communications Commission did not have the authority to establish net neutrality rules, meaning the Comcast-Netflix contract is completely legal. The problem is that the deal between Comcast and Netflix could set a dangerous precedent whereby service providers are gaining control over content providers, potentially leaving smaller companies that do not have the capital to reach similar agreements behind.
The Comcast-Netflix deal came soon after Comcast purchased Time Warner Cable for $45 billion. After the acquisition is complete, Comcast will supply service for nearly a third of all broadband Internet subscribers and be operating in most major urban markets. The buyout has come under scrutiny because it increases Comcast’s bargaining power with media companies and Internet content providers. As the Netflix deal proves, concern over Comcast’s endless expansion was warranted.
Netflix wants to make a deal with Comcast because its content accounts for roughly 30 percent of all Internet data usage at peak hours. Over the past several months, Netflix has been experiencing slow loading times, but now, with direct access to Comcast’s powerful broadband network, the website has an opportunity to improve its performance. If other content providers begin to experience slowdowns of their own, they could follow in Netflix’s footsteps and reach an agreement with a service provider. But this would leave the startups and less established content providers at a disadvantage because they could never afford such a deal.
The net neutrality laws that were struck down in January could have helped put a stop to the Comcast-Netflix deal. Even though the laws no longer apply, the Department of Justice always has the option to intervene. In addition, the FCC could establish new rules that the courts deem are within their power to establish. While Comcast’s deal is legal, there are checks that must be made to ensure that the increasingly powerful conglomerate does not abuse the power it has over content providers in the long run. The Department of Justice should keep a close watch on Comcast’s next moves, ensuring that its lucrative deal with Netflix does not put less established content providers at a disadvantage. If they fail to do so, the fairness and equality of the Internet could be jeopardized.
A version of this article appeared in the Thursday, March 6 print edition. Adam Fazlibegu is a staff columnist. Adam’s Angle is published every Thursday. Email him at [email protected]