Netflix, Inc. (NASDAQ:NFLX) is at the center of a storm over internet-based entertainment streaming services by network providers. Supported by data reported by net traffic management services such as Level 3, Netflix has accused Internet Service Providers(ISP) such as Comcast Corporation (NASDAQ:CMCSA) of thwarting streaming unless they paid for such services.
Netflix, Inc. issues with ISPs were more pronounced, in comparison to other content providers such as YouTube and Vimeo.
Why are ISPs demanding More From Netflix, Inc. (NASDAQ:NFLX)
For big players in the broadband connectivity industry such as Comcast Corporation (NASDAQ:CMCSA) or Verizon Communications Inc. (NYSE:VZ) the massive volumes that these rich-video streaming content providers generate is the heart of the issue. Therefore, their claim is that content producers should bear some of the costs of over-burdened broadband should be borne by the content producers as well.
On the contrary, claim Netflix Inc and others, all that is required by big broadband players is to affect small, inexpensive technology/ hardware upgrades of critical internet nodes to overcome traffic over-swell.
The content providers point out that ISPs are indulging in ‘extortion’ even as they charge consumers to receive the company’s internet services. Therefore, incidentally backend infrastructure costs should be handled from these charges, instead of witch-hunting content producers and choking them to bleed additional revenues.
Industry stakeholders hope that FCC will vote for introduction of ‘net neutrality’ allowing an even playing ground for all. In addition, it is expected that FCC will resolve as well as provide clear directions on ‘peer charging.’ ISPs such as Comcast Corporation (NASDAQ:CMCSA) , according to analysts understand that the current ‘charges’ that they levy on the likes of Netflix will now come under FCC regulatory framework.
Thus far, it was outside the preview of the FCC. CMCSA and their ilk hope that the FCC will rule that a pay-for-service deal emerges in favor of ISPs, instead of the dismal they received last year for charging Netflix.
The wait for the FCC vote by February first week, is indeed long for all stakeholders!