netflix
Netflix co-CEO Greg Peters has opposed a European proposal to force streaming providers and other online companies to pay for ISPs’ network upgrades.
“Some ISP partners are proposing to tax entertainment companies to subsidize their network infrastructure,” Peters said in a speech at the Mobile World Congress in Barcelona on Tuesday. (minutes). “This tax will have a negative impact and reduce investment in content. Creative he will hurt communities, detract from the attractiveness of expensive broadband his packages and ultimately hurt consumers,” he argued. .
ISPs have been asking for payments for years, and their demands are now being evaluated in preliminary consultations by European regulators. Last week, the European Commission began to take public comment on a proposal to make online platforms pay for upgrades and expansions of telecommunications companies’ broadband networks.
“ISPs claim these taxes only apply to Netflix. But this will inevitably change as stations move from linear to streaming,” Peters said at MWC. rice field.
Sandvine data suggests that nearly half of the world’s internet traffic is sent by Facebook, Amazon, Google, Apple, Netflix, and Microsoft. Online videos make up 65% of his total traffic, and Netflix recently overtook YouTube to become the top video traffic generator.
“Charging twice for the same infrastructure”
Citing data from Nielsen, Peters said that in the US and UK, “Netflix accounts for less than 10% of total TV time,” whereas “traditional local stations account for more than half of all TV time.” Live sports make up a lot of that.
“As broadcasters continue to transition from linear to streaming, they will start generating even greater amounts of internet traffic than current streamers, based on the range and size of their current audience,” said Peters. I’m here. “The broadband customers driving this increase in usage are already paying for the development of the network through subscription fees. effectively charges twice as much for the same infrastructure.”
Telcos receiving new payments cannot be expected to lower the rates they charge home Internet users, Peters said. “There is no suggestion that these taxes will be passed on to consumers in the form of ‘lower prices or better infrastructure,’ as pointed out by the consumer group BEUC,” he said.
Netflix’s “operating margins are significantly lower than those of British Telekom and Deutsche Telekom,” Peters said. , exactly what happened with the old pay-TV model.”
Netflix touts its own network spending
Carriers claim companies like Netflix aren’t paying their “fair share,” but Peters said Netflix has its own proprietary technology that reduces the amount of data sent over traditional telecommunications networks. He pointed out that he spent a lot of time building the network.
“We have spent more than $1 billion on Open Connect, our proprietary content delivery network that we give free to ISPs,” said Chris. is distributed to 6,000 locations and 175 countries, so when members press play, movies and TV shows stream from around the corner instead of streaming from the other side of the world. It also guarantees consumers a high-quality, lag-free experience.”
Peters also touted Netflix’s encoding technology that cut bit rates in half between 2015 and 2020. “Regulators have also underscored this, arguing that infrastructure costs are not traffic sensitive and that increased consumption will be offset by increased efficiency.”
An October 2022 report published by the European Electronic Communications Regulatory Commission (BEREC) found that there was “no evidence of ‘free riding'” and that connection costs were “usually covered and paid for by the ISP’s customers”. I understand.
“The ‘sender network pays’ (SPNP) model offers ISPs the ability to exploit termination monopolies, and we believe such a significant change could cause significant harm to the Internet ecosystem. said the BEREC report.
Telefonica CEO José María Álvarez-Pallete López told Reuters last week that payments from technology companies “are not like taxes, they charge like customers. Why do some customers Paying and other customers not paying? That’s fixing the anomaly.”
