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Netflix: Better No Net Rules Than FCC Proposal

Netflix is clearly no fan of FCC chairman Tom Wheeler's proposal to adopt a "commercially reasonable" standard for Internet discrimination, saying no rules would be better than ones that Netflix says endorse paid priority.

It is also no fan of using Sec. 706 authority to support new open Internet rules and is pushing the FCC to include interconnection, not just last mile connections, under openness protections. Netflix has been critical of a paid peering deal it struck with Comcast, suggesting it was a shotgun marriage. Comcast has countered that Netflix wanted to deal directly for interconnection to cut out the middlemen.

In comments filed on the FCC's new rule proposal, Netflix said the commercially reasonable standard was neither clear enough or strong enough to protect the open Internet, and that by "endorsing" paid priority, the rules arguably turned Internet openness "on its head."

Rightside up, the open Internet rules should look like the following, Netflix said: "The Commission should adopt clear and strong open Internet protections that prevent blocking, interconnection access tolls, unreasonable discrimination, and paid prioritization on any point in the network controlled by the terminating ISP."

Netflix also said the Internet is at a crossroads, and suggests traffic cop FCC has provided insufficient direction. "Down one road —a road defined by the Commission’s failure to put in place meaningful open Internet rules—is an Internet that looks more like cable TV, one characterized by legalized discrimination, carriage disputes, gamesmanship, and content blackouts which harms consumers," Netflix said. "Down another road is a scalable, more affordable, and open Internet built on strong network neutrality rules and a policy of settlement-free interconnection to last mile ISP network."

FCC chairman Tom Wheeler has argued that the commercially reasonable standard is not a free pass for paid priority, and that he will not allow Internet fast and slow lanes or any paid priority that hurts openness, competition, innovation or investment.

In fact, the D.C. federal appeals court suggested the FCC could take a commercially reasonable approach to preventing unreasonable discrimination in a legally sustainable way.