Advancement in technology, especially in internet connections has come with its fair amount of challenges instigating battles and arguments between internet service providers and content providers. Netflix, Inc. (NASDAQ:NFLX) CEO, Reed Hastings, has lashed out at giant ISP’s in an article on Wired, which he claims have adopted unethical business practices in terms of the way they control consumer’s access to the internet.
Hastings has already stated that if the standoff is to continue, Netflix won’t stand a chance to efficiently provide content in the ever competitive streaming industry especially if the largest internet service providers are allowed to merge. Earlier this year, the company was forced to pay AT&T Inc. (NYSE:T), Comcast Corporation (NASDAQ:CMCSA) and Verizon Communications Inc. (NYSE:VZ) for faster internet connections for consumers who were complaining of network congestion. Netflix has always maintained that network congestions are as a result of ISP’s not doing what they ought to do to keep up with subscriber’s demand.
Internet Service Providers, on the other hand, maintain that content service provider’s data-rich services are to blame as they only accommodate limited capacity on networks. Pay to play systems currently being initiated by ISP’s continues to raise eye brawls as they always result in additional costs both to the sender and receiver of the same content.
Netflix, Inc. (NASDAQ:NFLX)’s CEO has been pushing for net-neutrality as he seeks to ensure equal access of content without any form of favoring or selective charging. Netflix currently connects with hundreds of ISP’s around the word with Hastings stating that 99% of those agreements don’t charge any access fees. Problems are always sure to arise when dealing with some of the largest ISP’s in the U.S., which control the majority of the connections and in constant demand for toll fees.
Addition charges currently being pushed by the ISP’s remain one of the reasons why Hastings is vehemently opposed to the proposed merger between Time Warner Cable Inc. (NYSE:TWC) – Comcast Corporation (NASDAQ:CMCSA). Hastings claims that Comcast has already proved that it can use its current market position to demand extra access fees from content providers considerably affecting the streaming business.
Hastings believes that the merger between Comcast Corporation (NASDAQ:CMCSA) and Time Warner Cable Inc. (NYSE:TWC) will result in a company with a huge market share that will essentially affect the level of competition and pricing in the industry.
Carl Icahn‘s Icahn Capital LP is among the largest shareholders of Netflix, reporting ownership of 1.76 million shares in their latest 13F filing, the stake being reduced by 22% during the second quarter of 2014.
Disclosure: none
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