Free Press: Comcast-Netflix Deal Shows How ISPs Can Abuse Their Market Power

On Sunday, Netflix reached an interconnection agreement with Comcast to ensure its videos would be streamed directly to consumers. The deal ends the standoff that had led to poor performance of Netflix offerings to Comcast customers. The Wall Street Journal reported that the deal involved Netflix paying Comcast to deliver traffic onto its network.

Free Press President and CEO Craig Aaron made the following statement:

“The exact terms of the Comcast-Netflix deal are still secret, but this much is clear: Millions of consumers who have already paid handsomely for a premium broadband experience received poor service for months on end. Comcast refused to make minimal investments to deliver what their customers had already bought, while simultaneously pushing people to upgrade to more expensive services.

“This should be a wake-up call to regulators at the Federal Communications Commission about how ISPs will try to abuse their market power. The average user is at the mercy of powerful companies like Comcast and Verizon, both of which won’t hesitate to degrade their services as a negotiating tactic. We need a watchdog in Washington who will demand transparency and who has the authority to stop discrimination and anti-competitive behavior.

“This agreement is in no sense the outcome of a free market. This isn’t voluntary. This is Comcast having Netflix over a barrel, and striking a deal only once it became clear that degrading Netflix could derail their merger with Time Warner Cable.

“This deal is a glimpse of the future of the Internet — and that future will look even worse if Comcast is allowed to take over Time Warner Cable.”