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Consumers Union Wants Govt. to Vet Comcast/Netflix Deal

The Consumers Union wants the FCC and Department of Justice to vet the deal between Comcast and Netflix, announced this week, in which the latter paid for a direct connection to the former's network.

Comcast has said the deal does not mean Netflix is paying for preferential treatment, but instead that the direct linkup is providing a better user experience and opportunity for Netflix traffic to grow.

In letters to FCC chairman Tom Wheeler and attorney general Eric Holder, Consumers Union points to recent Comcast Netflix-related declines in speeds and service interruptions and says it wants the FCC and Justice to look into whether Comcast selectively degraded service so that Netflix would seek faster and more expensive service from Comcast.

The group wants the government to investigate the speed issue, given that Comcast agreed to abide by no-blocking or hindering of content providers conditions as part of the NBCU deal.

“We believe it raises serious concerns about the clout of Comcast, its ability to affect the prices and quality of service it offers consumers, and the alarming precedent it sets for the entire marketplace,” Delara Derakhshani, policy counsel for Consumers Union, said of the Netflix deal.

By some estimates, Netflix traffic already accounts for a third or more of online traffic at some times of day with its bandwidth-heavy video.

Comcast had no comment on the letters, but Tom Lenard, president of the Technology Policy Institute, suggested in a blog posting Feb. 26, that the deal was no big deal. He also pointed to the congestion and slowing of Netflix delivery to Comcast subs and suggested it was a marketplace solution to address that problem. 

"While some commentators think deals such as the one between Netflix and Comcast are problematic, the reality is that the agreement reflects a common market transaction that yields an outcome more efficient and more quickly than any regulatory intervention could have," he says.