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Netflix, Comcast End Feud: Why It Matters to You

If you tried to watch a movie or a TV series recently on Netflix, particularly if you happen to have Comcast as your Internet provider, you might have had a few issues. Sure, they may have the entire final season of Breaking Bad, but it won't do you much good if you are constantly having to buffer. That was the case for many Comcast subscribers as the cable giant, according to Netflix, slowed streams from the service by as much as 27 percent.

Fortunately, this week the two media companies reached an agreement that will end the dispute. This comes on the heals of the massive merger between Comcast and Time Warner. But even if you don't use Comcast, this deal should be of interest to you because it has the potential to impact future deals between other streaming services. There is also word that cable companies, in an effort to protect eroding markets as people leave subscription television services for streaming, will begin increasing prices to Internet-only customers.

Here's the breakdown on how all this affects you.

I'm going to assume you use the Internet or you wouldn't be reading this. Connecting to the Internet means going through an internet service provider (ISP). These services normally are provided by a broadband internet company like Comcast, which bundles internet, cable and phone services, or through a wireless connection like Verizon.

Regardless of how you get a connection to the internet, the companies providing that connection are looking for ways to protect themselves in an ever-changing marketplace. That includes limitations on downloads (particularly via wireless services) and slowing down the internet connection of those who use them most via a process called throttling. Anyone who downloads music or streams movies could have his or her connection slowed to the point that streaming services become difficult if not impossible to use.

In the case of Netflix, it was beginning to impinge on Comcast's bottom line. Not only was it using up a tremendous amount of Comcast's network bandwidth, but Netflix was beginning to steal cable subscribers from Comcast.

In addition to things like bandwidth limitations, there are other, larger concerns at work for consumers. The fact that Comcast and Netlix made a deal means that companies big enough to do so will simply buy their way onto the playing field. In essence, Comcast didn't like the fact that Netflix was using a lot of its bandwidth, so it slowed access, making the service less palatable to users. To avoid that, Netflix has to pay Comcast to stop doing it.

 

This is worrisome to those who are concerned with net neutrality. Many believe access to the internet should not be limited. In the case of power companies, for example, any utility that owns the actual power lines delivering electricity to homes and businesses must allow access to those customers from other energy providers -- at least in states with deregulation like Texas. The providers pay for access, of course, but the utility cannot charge higher rates to some and less to others.

Comcast is essentially saying that it can because it owns the technology that makes getting on the internet possible. No doubt others will follow suit, creating an uneven playing field for smaller companies that may not be able to afford the costs.

There is the additional concern that companies will provide preferential treatment to customers who pay more. Imagine if because Netflix paid, its service speeds were ramped up by Comcast while competitors like Amazon and Hulu saw their speeds diminished. That would create a significant competitive advantage for the company that pays.

That should matter to anyone with an internet connection because the same thing could happen to websites. If Comcast wanted to slow the page load of any website or even block it outright, it could. If every business had to pay every internet service provider a fee just so people could gain access, it would end the internet as we know it and give instant benefits to major corporations that could afford to pay for access.

As huge mergers like the proposed Comcast-Time Warner deal occur, it is likely they would put additional pressure on the federal government to keep it from making laws designed to provide equal access regardless of ability to pay.

It may not affect you now, but it bears watching. As incredibly powerful a resource as the internet is, it is not free. If companies like Comcast continue to eat into net neutrality protections, it could get a whole lot more expensive for everyone.


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