Netflix: Peacock’s NFL Game Justifies Net Neutrality
By Ted Hearn, Editor of Policyband
Washington, D.C., Jan.18, 2024 – When Peacock exclusively streamed the NFL playoff game last Saturday, Netflix leaders not only saw a football game, they also saw a threat.
Netflix jumped into the Net Neutrality battle here yesterday, pointing to Peacock’s presentation of the Dolphins-Chiefs game as evidence that Peacock’s parent Comcast – the largest cable Internet Service Provider in the country with 32.3 million subscribers – needs close watching by the federal government.
“Many ISPs have affiliated Pay TV and/or streaming content services that directly compete with independent, online content companies. ISPs with affiliated services have a clear incentive to advantage their affiliated services by either degrading the quality of their competitors’ content or increasing their competitors’ costs,” Netflix told the Federal Communications Commission.
In support of potential anti-competitive harm, Netflix added a footnote saying: “Peacock, a Comcast-affiliated streaming service, showed the NFL’s first-ever exclusively live-streamed playoff game.”
Comcast said the NFL contest attracted 23 million viewers and made it the most streamed event in U.S. history.
Net Neutrality regulations under consideration at the FCC are premised on allegations that ISPs like Comcast will use gatekeeper power to harm edge content providers like Netflix, Amazon Prime, and Apple TV despite the huge popularity of these online video services.
In the comments, Netflix described a highly concentrated ISP market, claiming consumers have too much trouble picking a new provider in situations where more than one ISP is available.
“… It is very difficult for a person to change ISPs: Switching costs are high and competition is insufficient to thwart non-neutral behavior. If an ISP blocks or throttles content requested by a subscriber, that subscriber cannot immediately access the content from another ISP,” Netflix said.
According to U.S. News & World report, “FCC data shows that in reality the vast majority of Americans (94%) have a choice of three or more ISPs providing broadband access in their area.”
In the content market, Netflix said consumers have access to “multiple competing streaming services” who can easily switch to a new provider with very few barriers.
Netflix argued that ISPs would exercise market power “to increase revenues by both charging their subscribers to access all Internet endpoints and also charging content providers to access their customers.”
Among other things, the FCC’s proposed Net Neutrality rules would prohibit ISPs from throttling or blocking content and accepting payment to prioritize content.
ISPs and their trade associations say they support an open Internet and that evidence of misconduct is effectively non-existent. They say the ISP market is far more competitive than Netflix lets on, meaning that consumers angered by an anti-competitive experience could easily find a new provider.
“ISPs have powerful, market-driven incentives to ensure their services accord with Open Internet norms, and that it would be irrational and counterproductive as a business matter for ISPs to degrade or interfere with their customers’ access to the Internet,” NCTA - The Internet & Television Association said in comments yesterday with the FCC.
NCTA represents major ISPs, including Comcast, Charter, Cox Communications, and Mediacom Communications.