Subsidizing Netflix

By John Sununu and Harold Ford, Jr, Honorary Co-Chairmen of Broadband for America (BfA)

San Jose Mercury News, 08/21/2011

One of the success stories of the Internet era has been Netflix, the company that provides movies and TV shows to home viewers. In its earlier years, Netflix was a snail-mail-only service. You ordered a movie. It showed up in your mailbox. You watched it, and then put it back in the mail for return to Netflix.

With the ubiquity of household broadband Internet, Netflix changed its business model to stream content. The benefits to Netflix? No more postage, no more production of DVDs, no packaging and no labels.

…

Obviously these massive transmissions over the Internet are not really free. Someone is paying for them. That "someone" is the millions of broadband subscribers, whether or not they are Netflix customers.

How is that fair?

…

The reality is that Netflix and similar services want a free ride on the networks built with more than $250 billion in design, engineering, manufacturing, construction and maintenance -- a system that now provides broadband services to 95 percent of American households.

Broadband networks are delivering more than just the latest sitcom episodes and hottest movies. They facilitate telemedicine, education, job training, telecommuting and many other functions. It hardly seems fair to make users of these services pay more in order to subsidize Netflix's costs of delivering their videos online.

Click here for the full op-ed.
 

Broadband for America (BfA) is a growing coalition of over 300 members ranging from independent consumer advocacy groups, to content and application providers, to the companies which build and maintain the Internet. The complete BfA membership list is available at: http://www.broadbandforamerica.com/about/members 

###