Streaming Companies Are Being Unnecessarily Forced To Pay For ISP Network Upgrade: Netflix Disputes

March 16, 2023 By Prelo Con

(Image Credit Google)

Photo Credit: Fortune Greg Peters, Netflix CEO spoke against the proposal made by Europe that will make the streaming providers pay for the upgrades of ISP network. He stated on Tuesday in a speech at Mobile World Congress in Barcelona, "Some of our ISP partners have proposed taxing entertainment companies to subsidize their network infrastructure, tax would have an adverse effect, reducing investment in content—hurting the creative community, hurting the attractiveness of higher-priced broadband packages, and ultimately hurting consumers.” Co-CEO Greg Peters Keynote Address to the 2023 Mobile World Congress - About Netflix

Co-CEO Greg Peters Keynote Address to the 2023 Mobile World Congress - About Netflix

Photo Credit: About Netflix For years now, ISPs have been asking for payments but now are being evaluated by European officials. In the last week, the commission took public opinion on the plan of payments for telecom companies' broadband expansions and upgrades by the OTT platforms. Peters stated, "ISPs claim that these taxes would only apply to Netflix. But this will inevitably change over time as broadcasters shift from linear to streaming.” According to Sandvine data, Amazon, Netflix, FB, Apple, Google, and Microsoft are all accountable for major global internet traffic. Internet video makes about 65% of all traffic, with Netflix recently overtaking YouTube as the main source of video traffic. Netflix

According to Nielsen data provided by Peters, "traditional local broadcasters account for over half of all TV time" in the US and the UK, while "Netflix accounts for under 10% of total TV time." and a huge portion consists of live sports. According to Peters, "broadcasters will start to create huge amounts of Internet traffic too, even more than streamers now based on the existing scope and volume of their audiences," "Customers of broadband services, who are responsible for this rise in consumption, already fund network expansion through their monthly subscription payments. ISPs would effectively charge twice for the same equipment if entertainment companies both streamers and broadcasters, were required to pay more on top." Facebook, Amazon, Apple, Netflix, and Google: Which is the best company to work for? | ZDNET

Facebook, Amazon, Apple, Netflix, and Google: Which is the best company to work for? | ZDNET

Photo Credit: ZDNet According to Peters, “it would not be reasonable to anticipate that telcos receiving new payments will reduce the fees they charge residential Internet users. There is little indication that these charges will benefit consumers through "reduced pricing or better infrastructure," taking into account the consumer group BEUC as proof. Also Read: Here's how to Save money on memory upgrades He added, "operating margins are significantly lower than either British Telecom or Deutsche Telekom. So we could just as easily argue that network operators should compensate entertainment companies for the cost of our content—exactly as happened under the old pay-TV model." Peters states that while the telcos claim that Netflix doesn't pay its share, however, the company has spent a lot in its network building due to which the data amount sent through the conventional telecom networks is less. Peters added, "We've spent over $1 billion on Open Connect, our own content delivery network, which we offer for free to ISPs," Fill patterns – Netflix Open Connect Partner Help Center

Fill patterns – Netflix Open Connect Partner Help Center

Photo Credit: Netflix Open Connect Partner Help Center "This includes 18,000 servers with Netflix content distributed across 6,000 locations and 175 countries. So when our members press play, instead of the film or TV show being streamed from halfway around the world, it's streamed from around the corner increasing efficiency for operators while also ensuring a high-quality, no-lag experience for consumers." José María Álvarez-Pallete López, the Telefonica CEO stated last week about fees from firms "would not be like a tax—we would charge them like they were customers. Why do some customers pay and others not? It's correcting an anomaly."

By Prelo Con

Following my passion by reviewing latest tech. Just love it.

Streaming Companies Are Being Unnecessarily Forced To Pay For ISP Network Upgrade: Netflix Disputes

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