Netflix Fires Back At FCC Commish Pai’s Allegation That It Is Building Internet Fast Lanes For Its Own Content

After initially declining to comment, Netflix has responded to FCC Commissioner Ajit Pai’s letter from last week alleging that the company was working to “effectively secure” online fast lanes for its content through deployment of its own caching technology. Netflix, unsurprisingly, doesn’t buy the argument.

The company claims that its “Open Connect” caching tools do not advantage its content, is based on open source technology, and works to protect the privacy of its users.

Caching is a separate issue from interconnection. In the case of interconnection, Netflix pays several ISPs to directly put its content onto their private networks. Netflix has argued in the past that it should not have to pay these fees, that interconnections should be regulated under net neutrality rules, but also that it will pay in the short-term to protect its users’ video performance.

The company also spends money to install Open Connect hardware at ISPs. That effort, however, is distinct from what the commissioner described as “open standards for streaming video,” placing Netflix’s method of caching its content apart from that of other companies.

Commissioner Pai argued in his letter that Netflix’s support for net neutrality was in opposition to its work to use Open Connect. Since Netflix is paying to install Open Connect hardware, it is financing a non-industry-standard technology that its own content works with well, leaving other content companies to use a less-Netflix-based set of tooling.

Netflix’s counter argument is that it’s the last-mile component of networks that matters, and as long as any ISP in question isn’t speeding up the video company’s content once it climbs aboard its network, then all’s fair.

Caching exists on ISP networks, however, making it a last-mile issue, and therefore party to the potential regulatory authority of net neutrality. If Netflix’s support of its own technology does lead to the company having quicker speeds on top of ISP networks, it could be argued that the firm is in moral abrogation of the spirit of net neutrality — that a company cannot use a financially-based effort to improve the delivery of its own content to its customers in a way that is not freely available to its competitors.

In its missive, the company reiterated its support of net neutrality and the banning of fast lanes for content that can afford it. Netflix also made an important historical point, indicating that it had “supported the FCC’s use of section 706 to promulgate its 2010 Open Internet Order,” noting that the legal setback that net neutrality suffered in January of this year, when it lost a key court case “has left [Commissioner Pai] and [his] colleagues at the FCC with little alternative but to consider other enforcement tools.”

That is a roundabout way of advocating for the use of Title II of the Communications Act of 1934 to reclassify broadband service as a utility, which would bring a greater regulatory burden onto Internet service. The President is a public advocate of such a model.

If you are annoyed about the gray area that exists as a miasma between paid prioritization — fast lanes — caching, interconnection and a market-friendly, open-source technology that Netflix doesn’t use, you’re not alone.

Netflix wants to have it both ways, it seems, at once financing technology that isn’t widely in use that helps its own content, while also claiming that given that Open Connect is open source, isn’t just for its own use. But given, in the case of the latter issue, that only a single ISP supports it, how precisely open it is isn’t clear.

The larger political context here matters. Commissioner Pai, a Republican, is opposed to net neutrality regulations. If he can find a way to embarrass one of the key advocates for net neutrality — by essentially painting them as hypocrites — it could go some distance to making net neutrality more persona non grata, and less of a key point for the protection of the Internet.

The FCC will rule on new net neutrality regulations in 2015. It had been expected that the agency would do so this year, but that deadline slipped in the face of massive public comment, the sheer complexity of the issue at hand, and certainly the shifting political climate following the decisive midterm elections.