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Netflix Still Supports Net Neutrality Despite Confusion Over CFO's Stance

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As the dust settles from the FCC’s new codified net neutrality guidelines, a Netflix executive got in hot water briefly for expressing his own thoughts that seemed to backtrack from the company’s earlier stated position.

CFO David Wells was quoted by Variety as believing that the company actually didn’t want the FCC to go so far as to base its Internet rules on Title II of the 1934 Communications Act. For those not keeping score, section 201 [47 U.S.C. 201] covers service and charges and states, “It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor.”

"Were we pleased it pushed to Title II? Probably not," Wells said. “We were hoping there might be a non-regulated solution." It sounds as though the executive and his fellow compatriots didn’t practice proper media training when Wells made his comments at the Morgan Stanley Technology, Media and Telecommunications Conference. The rhetoric, if taken under consideration, signals an interesting shift from statements released by Netflix last year, which called for the FCC to govern the Internet as a utility.

For a company that was so adamant on regulating companies such as Verizon and Comcast, it’s no surprise that Wells’ admission sparked such a fervor. In order to ensure that the hoopla didn’t become full-blown pandemonium within the communications industry, a Netflix spokesperson stepped forward to clarify Wells’ commentary. Saying that the CFO was describing "the evolution of the company’s position," the spokesperson highlighted Netflix’s previous declaration of pushing for the use of Section 706 in 2010.

Once those opportunities became moot, Netflix then pushed for the strongest FCC position which meant, in this case, backing Title II. "Netflix supports the FCC’s action last week to adopt Title II in ensuring consumers get the Internet they paid for without interference by ISPs," said the Netflix spokesperson. "There has been zero change in our very well-documented position in support of strong net neutrality rules." The FCC voted Feb. 27 to reclassify the Internet as a public utility.

That explanation doesn’t seem like enough for opponents of the FCC’s net neutrality rules. Randolph May, president of the Free State Foundation, quickly jumped on the opportunity to deliver a shot to the provider of binge-watching services, saying, "This must be a storyline for a very bad Netflix movie. I don’t know whether it’s a comedy or a tragedy."

All in all, proponents following the ins-and-outs of the net neutrality situation believe that Netflix may have overextended itself in supporting the FCC’s application of Title II. Google and the lobbying and advocacy group Free Press, advocates for strong net neutrality rules, warned that the "common carrier designation" that is part-and-parcel with Title II could give Internet service providers an excuse to charge for services like Netflix or YouTube twice. Under the double recovery scenario, they argue, one charge would be to the retail purchaser of the service and the other charge would be to the company sending the service, a model where the sender also pays.

Photo Credit: Netflix

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