Is Netflix Having Second Thoughts About Net Neutrality?

Netflix, the streaming media company, insists that it is not seeking a “rewind” on its strong net neutrality support despite recent comments by a company executive.

In a party line vote on February 26, commissioners on the Federal Communications Commission voted (FCC) voted 3-2 in favor of a 300-plus page set of regulations that reclassifies internet service providers as so-called common carriers or public utilities like old-school phone companies, thereby making them subject to federal government regulation.

The FCC majority derived its regulatory authority to do so from Title II of the Communications Act of 1934. The net neutrality regulations have yet to be released to the public, however, reminiscent in the minds of some of Rep. Nancy Pelosi’s famous vow about Obamacare that “we have to pass the [health care] bill so that you can find out what’s in it.” In a callback to the whole unfulfilled “if you like your healthcare plan, you can keep your plan” promise, moreover, others have wondered perhaps satirically whether “if you like your internet, you can keep your internet.”

The Obama administration maintains that the new rules “will keep the internet open and free” by treating all internet traffic equally. In November 2014, the president wrote that “We cannot allow internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas… I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.”

Foes of the plan maintain that net neutrality will smother competition and innovation, two elements generally necessary to bring down costs for the consumer. According to U.S. Senator Ted Cruz,”If the FCC turns the internet into a regulated public utility, the innovation, the creativity that has characterized the internet from its dawn, will inevitably be stifled.”

Dissenting Commissioner Ajit Pai also warned that a so-called internet conduct rule incorporated in the regulations “gives the FCC almost unfettered discretion to micromanage virtually every aspect of the internet, including the choices that consumers have for accessing it…”

So is Netflix backpedaling on its net neutrality advocacy? At an industry conference in San Francisco on Wednesday, Netflix CFO David Wells said among other things that “Were we pleased it pushed to Title II? Probably not. We were hoping there might be a non-regulated solution.”

“Since Netflix was one of the main proponents of the FCC re-regulating internet lines and expanding net neutrality rules to also cover middle-mile internet connections, Wells’ remarks raised a few eyebrows,” re/code explained.

Yesterday, however, a company representative suggested that Wells’ comments were taken out of context. “Netflix supports the FCC’s action last week to adopt Title II in ensuring consumers get the internet they paid for without interference by ISPs. There has been zero change in our very well-documented position in support of strong Net neutrality rules.” The Netflix blog also posted Wells’ net neutrality comments in full in which he claimed that the company is “very pleased with what’s been accomplished” about net neutrality.

Past disputes between Netflix and some ISPs over streaming speeds or so-called fast lanes may ultimately have led to the FCC regulatory action.

During an appearance at the Code/Media conference in California last month, billionaire Dallas Mavericks owner and Shark Tank star Mark Cuban declared of net neutrality that it “will f**k everything up… Net neutrality is just a demonization of big companies.” He added that “Having [the FCC] overseeing the internet scares the sh*t out of me.”

In an attempt to “neutralize” the FCC’s net neutrality decision, Congresswoman Marsha Blackburn (R-Tenn.) has this week introduced the Internet Freedom Act.

“Once the federal government establishes a foothold into managing how internet service providers run their networks they will essentially be deciding which content goes first, second, third, or not at all. My legislation will put the brakes on this FCC overreach and protect our innovators from these job-killing regulations,” she explained.

Leaving aside high-stakes turf wars between content providers and ISPs, do you think that net neutrality, as Netflix and may other tech companies argue, will be a “net” plus for the ordinary consumer? Do you anticipate any buyer’s remorse of a kind that has occcured with some Obamacare supporters?

[image via Twitter]