Google, Netflix, Net Neutrality
After the FCC dropped net neutrality (the principle that all internet traffic should be treated equally) amidst lobbyist pressure from ISPs, two online giants, Netflix and Google, find themselves on the other side of the argument. Netflix is afraid that ISPs will throttle their business, which is dependent on both bandwidth and data volume, as Netflix is responsible for 1/3 of US downstream traffic. Without net neutrality ISPs can try to sell “managed services” to video streaming providers which would guarantee them access to the fast data pipe over competitors, who aren’t willing to pay to play. ISPs can push their own video streaming services through the same mechanism. “You can watch the buffering wheel on Netflix or try out our smooth full HD offer Redbox Instant by Verizon.” Netflix’s strongest argument are 30 million subscribers. How would they react if their ISP slows down their video streaming or what if Netflix pulls it service from any operator, that slows them down? That is, of course, if customers have the choice to switch. If all ISPs decide to milk provisions from Netflix, they have nowhere to turn. Or do they?
“Google’s business depends on an internet where all traffic is free and equal.” With Google Fiber expanding all over the USA, this could be the broadband offering that aggressively pursues users who are fed up by a throttled internet. And what service would be better than Netflix to lure them in?