As Net Neutrality debate looms, Comcast and Netflix trade barbs

Comcast Corp. CEO Brian Roberts. (AP Photo/Susan Walsh)
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Alex Weprin

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As the F.C.C. prepares to forge a new path on net neutrality, two of the most-often cited names in the debate, Comcast and Netflix, squared off in dueling statements on the issue.

Netflix, which revealed that it opposed Comcast’s proposed merger with Time Warner Cable as it reported its quarterly earnings, started the public war of words in a blog post and in a letter to Senator Al Franken.

“In sum, Comcast is not charging Netflix for transit service. It is charging Netflix for access to its subscribers,” wrote Netflix V.P. Ken Florance in the blog post. “Comcast also charges its subscribers for access to Internet content providers like Netflix. In this way, Comcast is double dipping by getting both its subscribers and Internet content providers to pay for access to each other.”

Comcast did not take the criticism lying down.

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“Netflix’s argument is a House of Cards,” wrote Comcast senior V.P. Jennifer Khoury in a post responding to the claims. “As at least one independent commentator has pointed out, it was not Comcast that was creating viewability issues for Netflix customers, it was Netflix’s commercial transit decisions that created these issues.”

That comment was an important one, as Re/Code’s Peter Kafka noted, because Comcast was publicly suggesting that Netflix degraded its own product to customers.

Somewhat ironically, executives at Comcast have publicly said that they remain open to allowing a company like Netflix be available through its X-1 cable box.

“Where there is a real win-win relationship and a win for the consumer, we are certainly open to the possibilities,” said Neil Smit, president of Comcast Cable, on an earnings call with analysts earlier this week.

The public barbs certainly don’t help the cause, but Comcast is facing scrutiny from federal regulators, and Netflix is such a popular service that it may be inclined to make some sort of deal.

As it happens, Netflix announced late Thursday evening that it would soon be available on Tivo-branded cable boxes from three cable companies: RCN, Atlantic Broadband and Grande Communications. The companies are small, with around 700,000 customers combined, but it is the first time that Netflix will be available through a cable box, and not a secondary box like Roku, Apple TV or an Xbox.

Comcast, with 20 million subscribers, would be a much bigger fish, but Netflix’s public opposition to the Time Warner Cable deal leaves a great deal of doubt that any deal would be able to be worked out.