Monday, February 24, 2014

Net Neutrality Nixed, Netflix Pays Up

Netflix's deal with Comcast to pay for assured access and speed to their broadband lines is only surprising in how quickly this agreement occurred.  It's as if Netflix had expected and prepared for this day and had an agreement in its back pocket read to present to broadband companies like Comcast, Verizon, and others.  "It also comes amid growing signs that congestion deep in the Internet is causing interruptions for customers trying to stream Netflix movies and TV shows."  And it shows that Netflix wanted to put its customers' satisfaction first in accessing its content. 

But such a first deal will now force Netflix to negotiate with each and every broadband provider to assure similar access and streaming speed.  Those additional expenditures will need to be absorbed and the next likely announcement could be an increase in monthly subscription fees to its consumers for Netflix.  Yes, it is trickle down theory at work where the customer, you and I, eventually pay more for the product or service we consume.

Some might point to the need for new net neutrality rules to squash this preferential treatment and once again give all content equal access and speed.  With this Comcast - Netflix deal, the genie is out of the bottle and it is unlikely that new rules will arise.  Good or bad, net neutrality is dead.  But that shouldn't stop innovation and entrepreneur efforts to improve streaming, increase bandwidth, and uncover new technologies to transmit and access content.  Ultimately, the rise of more choice for broadband access will keep prices down, not net neutrality laws.

For now, Netflix will be paying for a spot at the front of the broadband line; Amazon, Hulu, and others may shortly follow.  And consumers will pay as well.  It just might be time for another quantum leap in broadband technology and airwave access.  Net neutrality may be nixed but innovation remains our future.