Cable Pushes to Exclude Netflix From Net Neutrality Protections

If Rules Are Coming, They Want Some Carve-Outs

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Internet service providers led by Comcast are pushing to protect from federal regulations their ability to demand fees from high-volume data users such as Netflix.

Netflix, the world's largest subscription video streaming service, and middlemen such as Level 3 Communications and Cogent Communications Holdings have asked regulators to prevent internet providers from charging for connections.

The issue is one of many the Federal Communications Commission will resolve in a vote set for Feb. 26 on rules to ensure all internet traffic is treated equally, a policy called net neutrality. The FCC also will decide whether to include mobile service under the rules, a step Chairman Tom Wheeler has indicated he favors.

Mr. Wheeler already said paid "fast lanes" would be prohibited under the rules he will propose. He hasn't said publicly if traffic exchanges are to be included.

"For the last two decades all of this has been done by contractual arrangements, all throughout the internet," Steven Morris, a lawyer with the National Cable & Telecommunications Association trade group, said in an interview. "We have lots of concerns about this, which is why we're encouraging the commission not to" include connection agreements in its net neutrality rules.

Republican lawmakers today called for Mr. Wheeler to release his proposal for public review as he gives the draft to fellow commissioners Feb. 5. FCC orders traditionally aren't published until the agency votes to adopt them.

'Public participation'
Millions of public comments were submitted to the FCC before regulators started writing the net neutrality rules.

Kim Hart, an FCC spokeswoman, in an e-mail said the agency was reviewing the request. She declined further comment.

Mr. Wheeler has said he intends to follow President Barack Obama's call for strong rules to prevent blocking or slowing of web traffic by internet service providers including Comcast and telephone leaders AT&T and Verizon Communications.

The companies have opposed Mr. Obama's path, saying it opens the way for intrusive oversight and possible rate regulation. The president's proposal "is an extreme and risky path that will jeopardize our investment," Fran Shammo, Verizon's chief financial officer, told analysts Jan. 22.

'Demanding tolls'
The agreements allow the companies to have a more direct connection into the internet service provider's network at a data center to improve the quality of content delivery.

Internet service providers have used web congestion for "leverage in demanding tolls for delivering video traffic to their subscribers," the companies and trade group told FCC officials in a Jan. 9 meeting.

Netflix said its videos flowed faster to customers after it paid Comcast, Time Warner Cable, AT&T and Verizon. Comcast said Netflix changed how traffic is carried in hopes of cutting out wholesalers, and to seek a more favorable arrangement.

~ Bloomberg News ~