Clarifying net neutrality

[Commentary] Netflix’s new deal with Comcast is a clarifying moment, or at least should be. It should now be clear that the mechanics of over-the-top video delivery are not a question of network neutrality.

The Netflix-Comcast deal, in fact, was made under conditions of maximum net neutrality -- at least as the Federal Communications Commission had initially construed it in its now-defunct Open Internet Order -- and of maximum scrutiny of Comcast. Comcast is still legally covered by those rules under the terms of it NBC Universal consent agreement with the Justice Department, and with Comcast now looking for the government’s blessing to acquire Time Warner Cable you can bet its lawyers are being scrupulous about hewing closely to the terms of that earlier agreement with the feds in its dealings with Netflix. If ever there were a time for Netflix to hold out and wait for the government to force Comcast’s hand in resolving whatever issues were behind the recent deterioration in the quality of Netflix streams on Comcast’s network it was now. And yet here we are, with Netflix apparently agreeing to pay Comcast to ensure smoother, more reliable streaming. So clearly, Netflix didn’t think the problem had to do with net neutrality or that it would be fixed by stricter enforcement of Comcast’s net neutrality commitment. But what the Comcast deal really reinforces is that Netflix has always been an awkward poster child for the cause of net neutrality, albeit a voluntary one. It may seem like a clean win for Comcast but that doesn’t mean it comes at Netflix’s expense. Netflix is getting a multi-year, service-level agreement with Comcast (and presumably Time Warner Cable at some point) at a predictable cost that accounts for future growth. Whatever that cost is, moreover, it’s likely to be lower than what it had been costing Netflix to send traffic to Comcast up to now via a third-party transit provider.

[Sweeting is Principal, Concurrent Media Strategies]