Netflix Turning Up the Heat on AT&T, Comcast and TWC Over Data Caps

Netflix Turning Up the Heat on AT&T, Comcast and TWC Over Data Caps

Netflix is lobbying federal regulators to prevent the cable companies from leveraging monthly broadband-usage caps against the video-streaming giant 

Netflix is turning up the heat on Comcast, Time Warner and AT&T over data caps that the cable companies place on unaffiliated streaming-video companies.

In its latest attempt to end what it considers discrimination on the parts of the three cable companies, the rental and streaming giant is "shopping questions related to data caps to the Senate Commerce Committee members in anticipation of tomorrow's oversight hearing with all five FCC commissioners," a person close to the situation told TheWrap on Tuesday.

Comcast, AT&T and TWC promote their own services by exempting them from the monthly broadband usage caps they apply to Netflix and other unaffiliated companies. Companies that exceed the usage caps — which Comcast, for example, has set at 250 gigabytes a month — can have their services cut off, slowed down or assessed with additional charges.

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Netflix's efforts on Tuesday follow by one week a lobbying call it made to the Federal Communications Commission May 7, asking the FCC to stop cable companies from unfairly favoring their own streaming services, a Netflix spokesman has confirmed to TheWrap.

“Broadband caps should be applied fairly to all online video sources or eliminated entirely,” Netflix argued last week, according to the FCC disclosure document from the May 8 call. 

(See Netflix's Power Point presentation to the FCC here.)

Last month, another video-streamer, Amazon, took the same position in front of the Commerce Committee. 

“Although internet subscribers should pay for the bandwidth they use, immutable or unrealistically priced data caps could hinder or prevent competitive products and services made possible by online video,” Paul Misener, Amazon’s vice president for global public policy, told the committee. “Consumer choice, without impairment, must be preserved.”

“We believe that ISPs should treat all providers of video, including their own services, equally,” Netflix spokesman Joris Evers told TheWrap.

The data caps have yet to become a major impediment for Netflix in the U.S. but are an issue in Canada, where Netflix degraded its service last year to avoid pushing its Canadian customers over the caps, said Art Brodsky, a spokesman for the watchdog group Public Knowledge.

“We made these changes because many Canadian internet service providers unfortunately enforce monthly caps on the total amount of data consumed,” said Neil Hunt, Netflix's chief product officer, in a March 28, 2011, blog on the company’s website.

Netflix’s Evers said company executives are not seeking legislation on the subject “at this point.” He declined to discuss additional details about the company’s plans.

Spokesmen for Netflix have not yet returned calls regarding Wednesday's Commerce Committee meeting. Spokesmen for Comcast and the FCC had no comment. Spokesmen for AT&T and Time Warner Cable had not returned telephone calls or emails.

Also read: Senate Confirms 2 New FCC Commissioners

Last month, Netflix CEO Reed Hastings charged that the cap policy demonstrates that Comcast is no longer following network neutrality principles. “Comcast should apply caps equally, or not at all,” Hastings said on his Facebook page.

The issue clearly isn't going away. “You’ll see more attention on this matter rather than less,” Markham Erickson, an outside counsel to Netflix and partner in the law firm Holch & Erickson LLP, told TheWrap. “That’s true both from the companies and policymakers.”

“With Amazon and other companies concentrating more on streaming video, we can see this becoming an issue (in the U.S.),” Public Knowledge's Brodsky added.