Netflix’s recent public comments on net neutrality illustrate the public policy challenges the Federal Communications Commission (FCC) faces with its broadband policy and neutrality probe. What has Netflix concerned is that Internet service providers (ISPs) are increasingly providers of video services and that this role gives them a vested interest in inhibiting delivery of over-the-top (OTT) video from sources like Netflix. If you take the argument to an extreme to be illustrative, you could say that if online video contaminates the broadcast model, then broadcast TV carriers who are also ISPs might want the Internet part of the service to fail in a video delivery mission because the return on investment (ROI) there is far lower than for the video part.
What makes this interesting to us is that it’s a clear link between general neutrality principles and the truly thorny question the FCC itself raised in its recent net neutrality NPRM, in the specific section regarding the regulatory status of non-Internet-but-IP services. The FCC asked if these services could sap Internet investment, and Netflix is making a pretty strong argument that they could. IPTV is the classic example; if it carves out 4 Mbps premium bandwidth slots to deliver TV, then not only is the Quality of Service (QoS) of those slots better, the slots themselves would reduce the bandwidth available for Internet video delivery.
Is that non-neutral? It’s a darn good question.