Netflix Asks FCC to Reject Comcast-Time Warner Merger

Netflix_House of Cards
Source: courtesy of Netflix
Monday, August 25, was the last day for the public to file comments with the Federal Communications Commission (FCC) related to the proposed $45 billion merger between Comcast Corp. (NASDAQ: CMCSA) and Time Warner Cable Inc. (NYSE: TWX). Among the last-minute filers was Netflix Inc. (NASDAQ: NFLX), which submitted a document of more than 250 pages urging the FCC to reject the proposed merger.

Netflix does not offer any particularly new objection to the transaction, but the company does provide a mountain of detail related to its long-standing opposition to the merger. Netflix says that if the deal is allowed to go through the result would be to turn customers’ Internet experience “into something that more closely resembles cable television. It would set up an ecosystem that calls into question what we to date have taken for granted: that a consumer who pays for connectivity to the Internet will be able to get the content she pays for.”

The merged companies would also have “the incentive and ability” to harm companies like Netflix that Comcast-Time Warner “view as competitors.” To parry that competition, “Comcast has already acted to lessen that threat by using its control over interconnection pathways to allow its own customers’ access to Netflix content to degrade until Netflix paid Comcast a terminating access fee.”

READ ALSO: Customer Service Hall of Shame

Netflix said there are four Internet service providers with the market power to “engage in degradation strategies to harm [online video distributors],” and two are proposing to merge, which makes matters worse for online video companies like Netflix.

In response to Comcast’s statement that video distributors should pay an interconnection fee for all the traffic they are “dumping” on Comcast’s network, Netflix counters that it does not deliver one bit of content that a Comcast customer does not ask for and that Netflix already pays a great deal of money to deliver its content to Comcast’s doorstep:

Comcast’s only responsibility is to do what it already has assured its customers it will do: carry traffic the remainder of the way and at the speed for which Comcast’s own customers have already paid.

Netflix summed up:

The combined entity’s control over its interconnection arrangements, coupled with such an increase in size, would allow it to insert itself into the heart of all Internet commerce, disrupting innovation, reducing financing for edge providers, and foreclosing compelling services from ever reaching the light of day. While this threat remains, the proposed merger cannot be justified under the FCC’s public interest standard.

The full filing is available at the Netflix website.

READ ALSO: America’s Best Companies to Work For

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.