Digital Transformation

Netflix CEO Reed Hastings warns internet service providers it is not in their interests to fight net neutrality

By Angela Haggerty | Reporter

March 22, 2014 | 4 min read

Netflix CEO Reed Hastings has called on internet service providers (ISPs) to realise that slapping companies with extra charges to provide quality streaming services is not in their long term interests.

The comments came following a US appeals court ruling earlier this year on behalf of Verizon which overturned the Federal Communications Commission’s (FCC) rules on net neutrality. The ruling means that ISPs can now charge for content delivery to major online companies like Google and Netflix. The ruling raised widespread concern that smaller companies and startups would not be able to compete financially and find it more difficult to establish any presence on the internet.

Hastings admitted that Netflix has already begun paying a toll to some ISPs to ensure service is not disrupted for users, but vowed the company would carry on fighting the emerging set up.

Row: Netflix has hit out at new rules on net neutrality

“Some big ISPs are extracting a toll because they can – they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay,” he wrote in a blog post.

“Though they have the scale and power to do this, they should realise it is in their long term interest to back strong net neutrality. While in the short term Netflix will in cases reluctantly pay large ISPs to ensure a high quality member experience, we will continue to fight for the internet the world needs and deserves.”

He added that if internet service providers' positions were strong enough to make Netflix pay, the outlook for smaller services wasn’t good.

The latest marketing news and insights straight to your inbox.

Get the best of The Drum by choosing from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creativity.

Sign up

“If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future,” he said.

Only a month after the US appeals court decision, reports began filtering through that Netflix and Amazon services had been affected and Verizon was “throttling” the speeds of customers’ connections, although Verizon denied it had taken any action.

In response to developments, Hastings added that the Verizon lawsuit highlighted that the previous form of net neutrality was not strong enough, and rather than a simple return to the previous set up he called for strengthened rules on net neutrality.

“The essence of net neutrality is that ISPs such as AT&T and Comcast don’t restrict, influence or otherwise meddle with the choices consumers make,” he wrote. “The traditional form of net neutrality which was recently overturned by a Verizon lawsuit is important, but insufficient.

“This weak net neutrality isn’t enough to protect an open, competitive internet; a stronger form of net neutrality is required. Strong net neutrality additionally prevents ISPs from charging a toll for interconnection to services like Netflix, YouTube, or Skype, or intermediaries such as Cogent, Akami or Level 3, to deliver the services and data requested by ISP residential subscribers. Instead, they must provide sufficient access to their network without charge.”

Hastings said Netflix would only pay to protect customers’ experience and not to gain an advantage over competitors.

Digital Transformation

More from Digital Transformation

View all


Industry insights

View all
Add your own content +