Despite the headaches a combined Comcast-Time Warner Cable could cause Netflix, CEO Reed Hastings won’t break a sweat trying to block the $45.2 billion deal, The Post has learned.
Hastings, instead, will use the controversial marriage of the nation’s No. 1 and No. 2 cable and broadband providers to gain leverage over how Comcast and other companies that control the Internet roadways treat content providers like Netflix, a person with direct knowledge of how executives at the video-streaming service are thinking told The Post.
“Netflix does not think the deal will be blocked,” the source said of the Comcast-TWC merger. There are too many ways “to remedy” its market dominance, including Comcast’s planned divestiture of customers, the source explained.
Hastings — and potentially other content providers, like Apple and Google’s YouTube — will flex regulatory muscles instead of convincing Washington to establish stricter rules that ensure content reaches consumers’ homes at the same cost and speed other providers offer— including Comcast’s own streaming service, sources said.
“If this deal goes through without new net neutrality conditions, it is problematic for Netflix,” the source said.
A spokesman for Netflix didn’t return a request for comment.
Among the issues Hastings will wage war over:
1. No extra costs to transmit large data files, like streaming video.
Broadband providers are pushing companies with large data files to pay more to get their content into people’s homes. The issue, known in industry parlance as “peering arrangements,” is one of the hot topics that Netflix wants regulators to crack down on ahead of the Comcast-TWC merger.
It may already be having an impact on consumers, experts said.
Netflix ranked Comcast No. 14 in speed out of 17 broadband providers in the last two months. Customers of Comcast have been complaining of spotty Netflix service. Experts have attributed the slowing speeds to Comcast’s alleged efforts to get Netflix to pay the peering fees.
Comcast didn’t return a request for comment.
2. No data caps on consumers.
Comcast and TWC have both been toying with placing data caps on consumers, akin to fee structures by wireless phone companies. In other words, watch too many viral cat videos and you will be blasted with a large Internet bill.
Netflix fears Comcast will let customers get around the data caps if they sign on with Comcast’s video-streaming service, Xfinity Streampix, thus creating an unfair playing field for Netflix, Apple TV and Amazon Prime.
3. No discrimination in web traffic.
Federal Communications Commission Chairman Tom Wheeler promised to issue a new set of rules that bar broadband providers from favoring one content provider over another, known as net neutrality. The rules could, for example, forbid Comcast from moving data from its video-streaming service faster than competing services.
Wheeler’s proposed rules are expected to be hashed out around the same time the FCC decides on the Comcast-TWC merger. The fate of the new rules will be influenced largely by conditions placed on Comcast to complete the merger, a source said.
“Comcast already has an incentive to make it difficult for competitors in the video market, like Netflix, to succeed,” said Andrew Jay Schwartzman, a lawyer and consultant who specializes in media and telecommunications policy.
After the merger, Comcast’s ability to crush the competition will only get worse, Schwartzman said.
“The FCC and the Justice Dept. could look at this as a bottleneck that will stifle the growth of competing service providers,” he said of the merger.