Netflix sheds light on circumstances that lead to 'interconnection' deal with Comcast
Currently undergoing regulatory review, the proposed merger between Comcast and Time Warner Cable isn’t something Netflix is excited about. The Los Gatos, California-based company views the deal as a potential threat to online video distributors (OVDs), according to the “Petition to Deny” (PDF) it recently filed with the Federal Communications Commission (FCC).
Netflix, which has, of late, been busy entering into costly agreements with Internet Service Providers (ISPs) to ensure smooth delivery of its video streaming content to customers, fears that an ISP as large as the resulting entity would enjoy unduly large bargaining power “over an OVD in negotiating such access fees because failure to reach an agreement with a terminating access network that accounts for a very large portion of an OVD's customers could have a devastating effect on the finances of the OVD.”
To make its point, the company cites the example of its February 2014 “interconnection” deal with Comcast and the exact circumstances that lead to it. Apparently, the deal came about because, in the two months immediately preceding it, the quality of the company’s service over the latter’s network had deteriorated to such a degree that customer support calls quadrupled and Netflix began losing customers.
“Comcast subscribers went from viewing Netflix content at 720p on average (i.e., HD quality) to viewing content at nearly VHS quality. For many subscribers, the bitrate was so poor that Netflix's streaming video service became unusable,” the petition reads.”The fact that the height of the congestion occurred in December and January is significant. December is one of Netflix's busiest times because members spend more time at home over the holidays and therefore request more streaming video from Netflix and other OVDs. It became clear that Comcast would continue to allow congestion across its network to negatively affect its subscribers' online video streaming experience.”