AT&T Blasts Netflix's 'Self Righteous' Plea For Net Neutrality

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News Posted: Sun, Mar 23 2014 8:54 AM
Proving once again that there are two sides to every story, a senior executive for AT&T fired back in contentious fashion at a blog post written by Netflix chief Reed Hastings calling for net neutrality. AT&T's Jim Cicconi called Hastings' plea "self righteous" and "arrogant," to use a couple of choice terms sprinkled throughout his rebuttal.

Hastings on Thursday explained all the reasons why ISPs like Comcast and AT&T shouldn't charge third-party services like Netflix an "arbitrary" interconnection fee. His blog post was prompted in large part by a multi-year deal Netflix struck with Comcast to ensure that its streaming traffic would reach Comcast subscribers with less buffering and without reductions in quality. To Hastings, even though Netflix accounts for nearly a third of peak residential Internet traffic, the cost-sharing model imposed by ISPs is unfair unless they're willing to also share in revenues. Fat chance of that happening.


Cicconi's long-winded response to Hastings' wordy blog post is simply that it costs money to support the increased volume of traffic Netflix is delivering, and Netflix should be the one to pay it.

"Mr. Hastings' blog post then really comes down to which consumers should pay for the additional bandwidth being delivered to Netflix’s customers. In the current structure, the increased cost of building that capacity is ultimately borne by Netflix subscribers," Cicconi explains. "It is a cost of doing business that gets incorporated into Netflix’s subscription rate. In Netflix’s view, that’s unfair. In its view, those additional costs, caused by Netflix’s increasing subscriber counts and service usage, should be borne by all broadband subscribers – not just those who sign up for and use Netflix service."

Cicconi made comparisons to Netflix's DVD-by-mail service. He points out that the cost of delivery was included in the subscription price, and that it would've been unfair and illegal to demand a customer's neighbor pay the cost of delivering his movie.


"Yet that's effectively what Mr. Hastings is demanding here, and in rather self-righteous fashion," Cicconi says. " Netflix may now be using an Internet connection instead of the Postal Service, but the same principle applies. If there’s a cost of delivering Mr. Hastings’s movies at the quality level he desires – and there is – then it should be borne by Netflix and recovered in the price of its service. That’s how every other form of commerce works in our country."

The bottom line as far as Cicconi is concerned is that "there is no free lunch" and Hastings' "arrogant proposition is that everyone else should pay but Netflix."
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I remember reading a few years back that the federal government handed the ISPs a few billion to improve the service and expand to more locations. Not sure if it was tax breaks or just a big check. But they clearly squandered that and hid all relevant information.

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AJStroud replied on Sun, Mar 23 2014 3:14 PM

This infuriates me! AT&T is going to pull the self-righteous card and say that Netflix should pay for the service AT&T offers?! Upgrade your lines and hardware, and you wouldn't have to deal with it AT&T! Since the US is at the bottom of the list with the slowest data networks, its up to the data companies to fix that. Don't blame others for your own shortcomings. The fact that they wont recognize themselves as the ones at fault here is retarded.

I've always hated the large communication and data companies for shit like this. With the Comcast/Time Warner merger, its just going to get worse :S

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If we're paying our f***ing internet; what they advertise and outline that we're paying for, we, as consumers should be entitled to it. Someone else shouldnt have to pay what we're already paying, and we shouldnt have to pay more! If you advertise a 50MB/s like for 79.99 a month, i should be allowed to saturate that f***ing line through and through 24/7 for the whole month if I want to. Thats what we're paying for.

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How we use the internet shouldn't be left up to isp's. This is just a money grubbing tactic. I am a little disgusted there would be articles supporting the idea of why net neutrality is bad. Are we going to run out of bandwidth? No. Does comcast already have unreasonably high priced services? You bet. Are they going to suffer letting users access online in any way shape or form? Nope. They are bitter and angry that netflix may cut in to their business model of having streampix and ordering pay-per-view. While are they suffering financially? I don't know, ask everyone who's paying $150-$200 a month for internet, and cable, and phone. Some people are up that high without any deals or phone service, just cable and internet. We are likely going to see netflix rates go up so ISP's can reap the profits. All under the guise of, we are running out of bandwidth! It simply isn't like mail, all digital content is the same no matter where it originated from. Mail is bulky, heavy and physical, and in order to use that service, it must be paid for. Well, we are already paying for the internet, so the service is compensated. Not only that, these isp's are well compensated. We pay for the use of the internet, netflix pay's for access to the internet too. So why do isp's get to be the middlemen and syphon off even more when we are already paying for the service. I hope the absence of net neutrality backlashes those who publish stories like this.

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NateKeen replied on Sun, Mar 23 2014 9:06 PM

Couldn't have said it better, Jeordie

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I am pro-Net Neutrality even though i know you can type it out and spin it so people seem sympathetic. Eventually this will end up before Congress AGAIN or court and moral vs bank accounts will see who wins the day.

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"I hope the absence of net neutrality backlashes those who publish stories like this."

To clarify, this isn't an anti-Net Neutrality editorial opinion piece. It is, however, a *news article* summarizing AT&T's rebuttal to Netflix's blog post, i.e. the other side of the story on the Net Neutrality debate.

Your wrath should be directed at Jim Cicconi and AT&T. It certainly should not be directed at HH for bringing this light.

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I think this is stupid Netflix does have a valid arguement. They will lose a bunch of customers if Comcast or other companies force the customers to not use the service. This also goes for other services as well.

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